Day: September 27, 2024

(Reuters) -The U.S. Department of Justice is investigating Super Micro Computer, the Wall Street Journal reported on Thursday, nearly a month after short-seller Hindenburg Research alleged “accounting manipulation” at the AI server maker.

Super Micro’s shares fell about 12% following the report.

The WSJ report, which cited people familiar with the matter, said the probe was at an early stage and that a prosecutor at a U.S. attorney’s office recently contacted people who may be holding relevant information.

The prosecutor has asked for information that appeared to be connected to a former employee who accused the company of accounting violations, the report added.

Super Micro had late last month delayed filing its annual report, citing a need to assess “its internal controls over financial reporting,” a day after Hindenburg disclosed a short position and made claims of “accounting manipulation”.

The short-seller had cited a three-month investigation that included interviews with former senior employees of Super Micro and litigation records.

Hindenburg’s allegations included evidence of undisclosed related-party transactions, failure to abide by export controls, among other issues.

The company had denied Hindenburg’s claims.

Super Micro on Thursday declined to comment on the report, while the DOJ said it cannot confirm or deny the existence of such a probe.

A Reuters review of tender documents earlier this year showed Chinese entities acquired high-end Nvidia chips embedded in server products made by several companies, including Super Micro, through resellers.

The U.S. government has been cracking down on the sale of such technology to China.

Super Micro has been a big winner in the generative AI boom, as businesses bet on the technology needed to power applications such as ChatGPT, sending its market value to $67 billion in March from roughly $4.4 billion.

The rally in AI stocks has since cooled, as investors realized the payoff on companies’ heavy investments would be slower than expected.

(Reporting by Akash Sriram and Aditya Soni in Bengaluru; Editing by Shreya Biswas)

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

It’s common knowledge that dividend stocks can help investors build wealth and generate passive income. However, not all dividend stocks are created equally and only 68 have earned dividend aristocrat status. Despite the REIT sector’s solid performance history, only three REITs are certified dividend aristocrats. Keep reading to find out which ones.

Don’t Miss:

How Do Stocks Achieve Dividend Aristocrat Status?

Achieving Dividend aristocrat status requires stocks to hit several key metrics in terms of longevity, performance and name recognition. First, the company issuing the stock must have a market cap of $3 billion and an average daily trading activity of $5 million. Second, the company must be a member of the S&P 500. Finally, it must have increased its paid shareholder dividend for at least 25 consecutive years.

Federal Realty Investment Trust (NYSE: FRT)

Federal Realty Investment Trust is a large operator of shopping centers and retail hubs in America’s largest metropolitan areas. This REIT owns and operates over 26 million square feet of retail space but has also diversified into the residential sector, where it has 3,100 multifamily units under management.

Federal Realty Investment’s market cap is an impressive $9.46 billion and its shares are trading in the $113 range. The stock’s price has been surging for much of 2024 and it’s paying a dividend of 3.85%.

That’s $4.35/share and Federal Realty Trust has been increasing its dividend for 50 consecutive years. That means this REIT is one of the very rare stocks that has attained both dividend king and dividend aristocrat status. Federal Realty Investment Trust’s performance history makes it an offering worthy of strong consideration from dividend investors.

Essex Property Trust (NYSE: ESS)

Essex Property Trust is one of America’s largest multifamily residential REITs. It owns and operates 254 separate assets that total 62,000 units. More importantly for Essex investors, most of its portfolio assets are in America’s most expensive West Coast rental markets. The high home prices create an ideal scenario for Essex investors because most residents in these markets have no choice but to rent.

Story continues

That helps explain Essex’s impressive performance history and its estimated $19.66 billion market cap. Essex shares are currently trading at $312.51 and paying a dividend of 3.14%, which is $9.81/share. Essex’s long-term future looks solid as long as the average home price in California is in the high six figures.

Trending: This billion-dollar fund has invested in the next big real estate boom, here’s how you can join for $10.
This is a paid advertisement. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the Fund’s prospectus. Read them carefully before investing.

Realty Income (NYSE: O)

Realty Income has transcended Dividend Aristocrat status and entered the rarified air of dividend king. This REIT specializes in triple-net-leased retail properties in free-standing buildings suited for big-box retailers, who usually make reliable tenants and sign long-term leases. The Realty Income portfolio includes 15,000 properties in 49 states and it has recently diversified into the gaming, industrial and distribution sectors.

Realty Income’s current market cap is $53.67 billion and its shares are trading at $61.63. Lately, Realty Income’s share price has been moving steadily upward on the strength of solid Q2 2024 earnings. The estimated current dividend is a very investor-friendly 5.21%, which is $3.21/share.

That alone is enough to make Realty Income very popular with investors. However, that’s not the only reason they love this stock. Unlike many other REITs or dividend stocks, which pay dividends every quarter, Realty Income pays them on a monthly basis. Additionally, this dividend aristocrat REIT has also achieved dividend king status by increasing its shareholder dividend for 50 consecutive years!

Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Keep Reading:

This article Very Few Investments Achieve Dividend Aristocrat Status: Only Three Of Them Are REITs – Can You Guess Which? originally appeared on Benzinga.com

Passive income is a powerful tool for building long-term wealth and securing financial freedom. High-yield dividend stocks offer investors an effective way to generate steady cash flow without active management or daily involvement.

Success in dividend investing hinges on identifying companies that offer attractive yields and possess the financial strength to maintain and potentially grow their payouts over time. These rare finds can become cornerstone investments, providing reliable income streams for decades.

Two stocks currently shine in the high-yield landscape, each offering yields above 5% with intriguing long-term prospects. Let’s examine why these dividend powerhouses merit closer attention from income-focused investors.

Verizon: A telecom titan with a juicy yield

Verizon Communications (NYSE: VZ) presents a compelling case for income-focused investors in light of its hefty 6.07% dividend yield. The telecom giant boasts an 18-year streak of consecutive-dividend increases, recently raising its quarterly payout to 67.75 cents per share despite its 100% payout ratio.

Verizon’s strength stems from its dominant U.S. wireless market position, controlling approximately 40% of the postpaid phone market share. This scale allows Verizon to generate industry-leading margins and returns on capital, underpinning its generous dividend payments.

The company’s stock has climbed over 18% year to date, likely benefiting from investor rotation into select high-yield dividend stocks ahead of anticipated interest rate cuts. While Verizon faces stiff competition and challenges in its fixed-line business, its extensive fiber-network assets and 5G technology offer growth potential.

Verizon’s focus on wireless service-revenue growth, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) expansion, and free-cash-flow generation reinforces its commitment to maintaining an attractive dividend. With shares trading at just 9.5 times forward earnings, the stock also offers a substantial margin of safety in the event of a marketwide pullback.

This blend of high-yield, growth potential, and attractive valuation makes Verizon an attractive passive-income play.

Pfizer: A pharmaceutical giant with an attractive yield

Pfizer (NYSE: PFE) offers passive income investors a substantial 5.69% dividend yield. The pharmaceutical powerhouse also sports a vast portfolio of over 350 marketed medicines and 113 clinical-trial candidates, with a global footprint spanning more than 200 countries.

Still, recent challenges, primarily stemming from declining COVID-19 franchise sales, have hit Pfizer’s stock hard. The drugmaker’s share price has plummeted by over 50% from its three-year peak, potentially creating an attractive value opportunity. Currently, Pfizer trades at just 9.6 times projected 2026 earnings.

Story continues

While Pfizer’s 15-year streak of consecutive-dividend increases is impressive, the current 436% payout ratio raises eyebrows regarding sustainability. Management has tackled this concern head-on, reaffirming its commitment to a top-tier dividend and implementing a $4 billion cost-saving initiative to shore up its balance sheet during the post-COVID transition.

Looking ahead, Pfizer’s future largely depends on the fate of its clinical pipeline, especially its slate of potential blockbuster cancer treatments. Success in this high-growth market segment could significantly boost the company’s financial outlook and help bring the payout ratio closer to its historical 50% average.

Pfizer’s status as an economically insensitive stock, coupled with its high yield and promising pipeline, makes it an intriguing option for those seeking steady income and long-term portfolio stability. Moreover, the drugmaker’s rock-bottom valuation should provide a significant margin of safety in the event of a marketwide correction.

All told, Pfizer screens as a top candidate for a long-term-oriented passive income portfolio.

Should you invest $1,000 in Pfizer right now?

Before you buy stock in Pfizer, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $740,704!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 23, 2024

George Budwell has positions in Pfizer. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

2 High-Yield Dividend Stocks That Can Deliver a Lifetime of Passive Income was originally published by The Motley Fool