3 Top Dividend Stocks to Buy for Passive Income in November
Collecting passive income can help you gain more financial freedom. As your passive income grows, it will make you less reliant on your active income from working. That can help steadily reduce your stress level.
There are lots of great ways to increase passive income, including investing in dividend stocks. Realty Income (NYSE: O), Kinder Morgan (NYSE: KMI), and Verizon Communications (NYSE: VZ) are three top options to buy this November if you’re looking to make more passive income.
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Realty Income is a real estate investment trust (REIT) with a mission to deliver dependable monthly dividends to its investors that grow over time. The REIT has certainly achieved that objective over the years. It has increased its payout for the last 30 straight years, including the past 108 quarters in a row.
The REIT currently offers a more than 5% yield. That’s several times higher than the average dividend stock (the S&P 500‘s dividend yield is less than 1.5%). Put another way, every $100 you invest into Realty Income would produce about $5 of annual passive income compared to less than $1.50 for a similar investment in the average dividend stock.
Realty Income should be able to continue increasing its dividend. The REIT expects to grow its adjusted funds from operations (FFO) by around 4% to 5% per share each year. Rent growth will supply around 1 percentage point, while acquisitions of income-producing real estate will help provide the rest.
The REIT has a strong financial profile and balance sheet, giving it ample flexibility to continue making acquisitions. Meanwhile, given the size of the commercial real estate market in the U.S. and Europe, it has a multitrillion-dollar investment opportunity.
Kinder Morgan is a leading pipeline company that operates the country’s largest natural gas pipeline system. It also owns product pipelines, terminals, and carbon dioxide infrastructure.
The company’s midstream assets produce very stable cash flows backed by government-regulated rate structures and long-term, fixed-rate contracts. Kinder Morgan pays out a little more than half its stable cash flow in dividends and retains the rest to pay for expansion projects and maintain a strong financial foundation.
The company currently has $5.2 billion of expansion projects in its backlog, including a large $1.7 billion natural-gas pipeline expansion that should enter commercial service in late 2028. And it has many more projects under development to support the expected surge in demand for electricity in the coming years. Those projects will grow the company’s cash flow, enhancing its ability to increase its dividend, which it has done in each of the last seven years.
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