Over the past century, the stock market has placed itself on a pedestal above all other asset classes. Although investing in Treasuries, real estate, gold, and oil would have increased your nominal wealth, none of these other asset classes came close to the average annual returns generated by stocks over the very long term. term.
What makes Wall Street so special is the diversity of its investments. With thousands of publicly traded companies and exchange-traded funds to choose from, there’s a very good chance that there is an investment vehicle (or 10) to satisfy your company’s goals and risk tolerance level. each.
But among these countless puzzle pieces, few strategies have enjoyed more consistent success than buying and holding securities. dividend stocks over extended periods.
Last year, investment advisory firm Hartford Funds released a report (“The Power of Dividends: Past, Present and Future”) that analyzed the various ways in which dividend-paying stocks have outperformed their non-dividend-paying public counterparts on the long term. One data set contained in this report was particularly revealing.
Working with Ned Davis Research, Hartford Funds showed that companies paying a regular dividend to their shareholders more than doubled the average annual return of non-payers over a period of 50 years (1973-2023): 9.17% versus 4.27%. Additionally, dividend stocks were 6% less volatile than the benchmark. S&P500while non-payers were, on average, 18% more volatile.
Although dividend stocks have a long history of outperformance, no two income stocks are equal. In some situations, a drop in a stock price can drive up a company’s performance and lure income seekers into a trap. But it’s not always the case.
What follows are two very high-yielding dividend stocks, with an average yield of 9.69%, just waiting to be purchased in June.
It’s time to pounce: Annaly Capital Management (13.2% return)
The number one supercharged dividend stock that has been completely beaten to a pulp over the past decade – the shares are down 58% over 10 years – but is currently a delicious buy for income seekers is the real estate investment trust mortgage. (FPI) Annaly Capital Management (NYSE:NLY). Annaly has returned $25 billion to its shareholders since its October 1997 IPO and currently boasts a staggering 13.2% yield.
There is probably no sector that has been more universally hated by Wall Street analysts for longer than mortgage REITs. The simple explanation for this skepticism has to do with interest rates.
Mortgage REITs are very sensitive to changes in interest rates, as well as the extent of monetary policy implementation. This is an industry that traditionally favors rate easing cycles and transparent monetary policy changes from the country’s central bank. But since March 2022, it is an industry that is facing the fastest rate hike cycle in four decades, as well as…
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