November 2024 - Page 311 of 326

Here's Why Energy Transfer Stock Is a Buy Before Nov. 6

02.11.2024 by admin

It’s important to take the long-term view when investing. You should think in terms of years and decades, not months and days. However, it’s also wise to keep an eye on the calendar before investing to get ahead of a potential catalyst.

Those interested in buying midstream giant Energy Transfer (NYSE: ET) should circle Nov. 6 on their calendar. It’s an important date for the master limited partnership (MLP) because it precedes the company’s next earnings report and distribution payment. Here’s why investors might want to buy before that date.

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Energy Transfer will report its third-quarter earnings after the market closes on Nov. 6. The midstream giant will likely report strong results.

The company is coming off an excellent second quarter. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 20% to $3.8 billion, while its distributable cash flow soared 32% to $2 billion. The MLP delivered record volumes across several segments, fueled by strong market conditions, recently completed expansion projects, and acquisitions.

That strong momentum likely flowed into the third quarter. Energy Transfer should continue to benefit from its needle-moving merger with Crestwood Equity Partners, which closed last November. In addition, it should continue to get a boost from recently completed expansion projects, including two new ones that started service in July, which should impact its results in the third quarter. And the company closed its highly accretive $3.1 billion acquisition of WTG Midstream in July.

Meanwhile, the company will likely provide an update on its progress in securing additional expansion projects. For example, it took another step toward finally approving its long-delayed Lake Charles LNG project last month. Securing additional expansion projects would further enhance its growth outlook.

Units of Energy Transfer are already up about 20% this year. Reporting stronger-than-expected third-quarter results or progress on securing additional expansion projects could give it more fuel to continue rallying. Because of that, investors might get a better price if they buy before Energy Transfer reports earnings.

Energy Transfer recently declared its latest distribution payment of $0.3225 per unit. That’s a $0.0025-per-unit increase from last quarter and a 3.2% pay bump compared to the year-ago level. That aligns with the MLP’s plan to increase its distribution by 3% to 5% annually.

The midstream company will pay its distribution on Nov. 19. However, you must be a unit holder of record by the close of business on Nov. 8 to receive its next distribution payment.

That upcoming distribution payment is another reason investors might want to consider buying Energy Transfer sooner rather than later. If you buy after Nov. 8, you might pay a higher price for the MLP’s units and won’t receive your first distribution payment for another 90 days.

While there are compelling reasons to buy Energy Transfer before the market closes on Nov. 6, there are plenty of reasons why investors might want to be more patient.

Even if units of Energy Transfer spike after it reports earnings, investors would likely still lock in a very lucrative yield that is currently approaching 8%. That’s much higher than the current dividend yield on the S&P 500 (SNPINDEX: ^GSPC), which is less than 1.5%, due to the MLP’s bottom-of-the-barrel valuation. Meanwhile, as mentioned, the company plans to continue growing its distribution in the future, suggesting there will be plenty of income to come.

Another reason some investors might want to wait is to take the time to understand the ins and outs of investing in an MLP, which differs from traditional corporations. A big one is that they send their investors a Schedule K-1 federal tax form each year, which can complicate and add to the expense of filing your taxes. However, those tax complications can make investing in MLPs well worth the hassle, given their other tax advantages.

There are a couple of compelling reasons to buy Energy Transfer before Nov. 6. It reports earnings that day, while investors must own units by the 8th to collect the next distribution payment. So, if you want to ensure you own units before a potential price spike and collect the upcoming distribution, you should buy them soon.

That said, don’t feel like you need to rush out and purchase units if you still need to finish your research, since it trades at a low valuation and plenty more distribution payments are coming down the pipeline. It’s better to make a fully informed investment decision than to buy a stock before you know what you’re getting into.

Before you buy stock in Energy Transfer, consider this:

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Matt DiLallo has positions in Energy Transfer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Here’s Why Energy Transfer Stock Is a Buy Before Nov. 6 was originally published by The Motley Fool

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9 High-Yield Dividend ETFs to Buy to Generate Passive Income

02.11.2024 by admin

Passive income — what’s not to like? It’s money that comes to you without your having to actively work for it. There are many kinds of passive income, such as income from rental properties and interest from bonds.

A particularly powerful kind of passive income is that from dividend-paying stocks, because they offer the chance of stock-price appreciation, dividend income, and dividend growth. It can be hard to hunt for the best dividend payers out there, though, so you might instead want to simply park your long-term dollars in one or more exchange-traded funds (ETFs) that focus on dividend income.

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Someone holding a camera and smiling broadly. — Image source: Getty Images.

An ETF is a fund that trades like a stock — and often tracks a particular index, too. Here are nine high-yield ETFs to consider. (Note that some have yields that are currently on the high side, while others feature lower yields that are likely to grow faster.)

While these ETFs are focused on delivering income, understand that they’re not the only dividend-paying ETFs out there. In fact, a simple S&P 500 index fund is a dividend payer, too — because many of the 500 companies in the S&P 500 pay dividends. The S&P 500 recently sported a dividend yield near 1.3%.

Check out these ETFs below, which are very dividend-focused. At the end of the table is an S&P 500 index fund, for comparison. Note that I’m including a fairly big bunch because I’m trying to encompass funds from several major fund companies. I’m doing so because depending on which company administers the 401(k) account at your workplace, if you have such an account, you might be able to invest in one or more of the funds below via your 401(k).

ETF	Recent Yield	5-Year Avg. Annual Return	10-Year Avg. Annual Return
iShares Preferred & Income Securities ETF (NASDAQ: PFF)	6.00%	3.11%	3.95%
SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD)	4.18%	8.67%	N/A
Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD)	3.61%	13.05%	12.02%
Fidelity High Dividend ETF (NYSEMKT: FDVV)	2.87%	14.91%	N/A
Vanguard High Dividend Yield ETF (NYSEMKT: VYM)	2.65%	11.34%	10.53%
iShares Core Dividend Growth ETF (NYSEMKT: DGRO)	2.24%	12.59%	12.49%
SPDR S&P Dividend ETF (NYSEMKT: SDY)	2.22%	9.55%	10.42%
Vanguard Dividend Appreciation ETF (NYSEMKT: VIG)	1.65%	12.93%	12.33%
First Trust Rising Dividend Achievers ETF (NASDAQ: RDVY)	1.49%	15.05%	13.21%
Vanguard S&P 500 ETF (NYSEMKT: VOO)	1.3%	16.07%	13.70%

Data source: Morningstar.com, as of Oct. 22, 2024.

Here’s a little information on each of these funds.

iShares Preferred & Income Securities ETF: This is full of about 443 U.S. preferred stocks and hybrid securities. Note that preferred stocks generally don’t appreciate much in value, and their dividends aren’t usually big growers, either — but they do tend to deliver generous passive income.
SPDR Portfolio S&P 500 High Dividend ETF: This ETF will have you invested in the 80 highest-yielding stocks within the S&P 500 index.
SPDR S&P Dividend ETF: This ETF features about 133 stocks from within the S&P 1500 Composite Index that have increased their dividends for at least 20 consecutive years.
Schwab U.S. Dividend Equity ETF: This ETF tracks the Dow Jones U.S. Dividend 100 Index, which is focused on 100 high-yielding U.S. stocks with solid fundamentals and consistent payments.
Vanguard High Dividend Yield ETF: This ETF tracks the FTSE High Dividend Yield Index of high-yielding companies and recently encompassed around 550 of them.
First Trust Rising Dividend Achievers ETF: This ETF is focused on the Nasdaq US Rising Dividend Achievers index of about 50 companies of various sizes that have been paying growing dividends and seem healthy enough to continue doing so.
Vanguard Dividend Appreciation ETF: This ETF tracks the S&P U.S. Dividend Growers Index of about 340 large-cap stocks with a solid record of dividend increases.
iShares Core Dividend Growth ETF: This ETF is another one focused on U.S. stocks, around 400 of them, that have been consistently paying — and increasing — dividends.
Fidelity High Dividend ETF: This ETF features around 107 medium-sized and large companies that are poised to keep paying and increasing their dividends.

The list above might seem overwhelming, so here are some thoughts that can guide your decision-making:

If your workplace 401(k) plan is administered by Fidelity, Schwab, or Vanguard, you might find one or more of the funds above among the investments you can choose from.
There’s often a trade-off between growth and yield. So the preferred-stock ETF here features the highest recent yield, near 6%, but that yield isn’t going to grow much.
The S&P 500 index fund at the bottom of the chart sports the lowest yield, but the highest average annual gains.
You might split your dollars between one or a few funds with fatter yields and one or a few that are likely to appreciate in price rapidly. (Note that some ETFs have even bigger growth rates, though they tend to pay little in dividends.)
Never forget the power of dividend growth. Don’t write off small dividends if they’ve been increasing rapidly — and, thus, don’t discount some of the smaller yields in the table above if the ETF is focused on dividends that are growing. For example, consider Automatic Data Processing, which recently sported a yield of 1.93%. But look into its dividend history, and you’ll see a recent annual dividend of $5.60 per share, up from $4.37 in 2022 and $3.28 in 2019. Buying ETFs with smallish but rapidly growing dividends can be a great long-term move.

If you want to look even further afield for ETFs that are cranking out lots of passive income, you might look into some that invest via junk bonds and options, or some that feature lower volatility.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $20,993!*
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Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 28, 2024

Selena Maranjian has positions in Schwab U.S. Dividend Equity ETF. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF, Vanguard S&P 500 ETF, and Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF. The Motley Fool has a disclosure policy.

9 High-Yield Dividend ETFs to Buy to Generate Passive Income was originally published by The Motley Fool

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Trump Vs. Harris: A Nail-Biting Pre-Election Showdown

02.11.2024 by admin

The upcoming presidential election is witnessing a nail-biting competition between former President Donald Trump and Vice President Kamala Harris. With Election Day just around the corner, the race is tightening.

What Happened: Recent national polls suggest a neck-and-neck race between Trump and Harris. Some polls even indicate a slight edge for Trump. A USA Today/Suffolk poll released on Friday shows a close contest in Pennsylvania, a key swing state.

Both Trump and Harris have scheduled events in North Carolina, another swing state, on Saturday. Trump is set to make appearances in Charlotte and Greensboro, North Carolina, and Salem, Virginia. Harris, on the other hand, will rally in Atlanta, Georgia, before heading to Charlotte.

A new Washington Post poll shows Harris leading Trump by a slim margin among likely and registered voters in Pennsylvania. The poll, conducted from Oct. 26-30, also found high voter enthusiasm in the state, with 20% of respondents already having voted and 73% certain to vote.

Also Read: More Than $100M Wagered On Presidential Race On Kalshi

A HarrisX/Forbes poll released Thursday shows Harris leading Trump 49% to 48% among likely voters nationwide and in the seven battleground states. However, her lead in the battleground states has slimmed from a HarrisX/Forbes poll released a week earlier.

In Michigan, Harris leads Trump 48% to 45%, according to a Detroit Free Press poll. In contrast, a Stetson University Center for Public Opinion Research poll shows Trump leading Harris 53% to 46% in Florida. In Massachusetts, Harris leads Trump 61% to 31%, according to the MassINC Polling Group.

Why It Matters: The tight race between Trump and Harris underscores the high stakes and unpredictable nature of the upcoming election.

The outcome in key swing states could potentially tip the balance in favor of either candidate. The high voter enthusiasm indicated by the polls suggests that the election results could hinge on voter turnout.

The slimming lead for Harris in battleground states, as indicated by the HarrisX/Forbes poll, further adds to the uncertainty of the election outcome.

Billionaire Israel Englander Just Tripled His Investment in This Stock That Warren Buffett and Cathie Wood Also Own

02.11.2024 by admin

Billionaire money managers often have strikingly different approaches to investing. Consider Warren Buffett, whose holding company, Berkshire Hathaway, only owns about 45 stocks at a given time, and Israel Englander, head of Millenium Management, who owns several thousand. Add someone like Cathie Wood into the mix, who runs investing firm Ark Invest and buys disruptive tech stocks for Ark’s exchange-traded funds (ETF), and you have three different investing mindsets.

What’s something they all have in common? They all own Amazon stock, which is a no-brainer stock for any portfolio, and they also all own young upstart Nu Holdings (NYSE: NU) stock.

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Buffett, or someone on his team, first recognized Nu’s potential when he invested $500 million in the company before it went public in 2021. It now owns 107,118,784 shares, or 2.2% of the company, although it makes up a tiny 0.5% of Berkshire Hathaway’s equity portfolio. Cathie Wood owns 1,238,918 shares as part of Ark’s Fintech Innovation ETF, accounting for 2.1% of the portfolio. Millennium owns 39,192,266 shares of Nu, which is a 371% increase in his position from last quarter.

Let’s see why three very different money managers are all excited about this growth stock.

Nu is an all-digital bank based in Brazil. It has also recently entered Mexico and Colombia, but they’re small businesses for now. It’s growing quickly in every way, and it has been reporting incredible results every quarter since it went public.

It added 5.2 million customers in the 2024 second quarter, reaching a total of 104.5 million. Most of them are still in Brazil, where it has 95.5 million, or more than half of the adult population. Nu was a challenger when it premiered just over 10 years ago, offering a simple and easy-to-use alternative to the rigid banking services offered by a handful of large, traditional banks. Banking was so complicated and expensive before Nu came onto the scene that a large percentage of the population didn’t even have a bank account. Nu has a leg up on the legacy banks since it was built to be flexible and agile, and customers are flocking to its platform. That’s something Buffett loves.

That leaves about 9 million customers in its other two markets, 7.8 million of whom are in Mexico, and Nu’s performance in Mexico has already surpassed how it did in Brazil at a similar growth stage. It added 1.2 million customers in Mexico in the second quarter, or a 15% increase over last quarter.

It’s not hard to imagine how this is affecting revenue and scale. Revenue increased 65% year over year in the second quarter, a typical increase, but the membership growth is only half of the story. The other half is that members continue to use more services on Nu’s platform, leading to higher revenue per user and higher overall revenue growth. This is a strong signal of consumer satisfaction and long-term potential. Average revenue per active user was up 30% year over year in the second quarter.

Nu was a riskier play when it went public, as many initial public offering (IPO) stocks are, because it wasn’t net profitable on a generally accepted accounting principles (GAAP) basis. But it has reported GAAP net income for six straight quarters, and it’s been growing phenomenally.

As an all-digital bank that skips costly real estate and relies on technology in place of human interaction, it has operating leverage. Its cost to serve has remained relatively stable despite its growth. Net interest income increased 77% year over year in the second quarter, with the margin widening from 18.3% to 19.8%.

Nu net interest income and margin. — Image source: Nu Holdings.

As you might imagine, Nu stock is riding high, and it’s nearly doubled during the past year. At the current price, it trades at a forward, one-year price-to-earnings (P/E) ratio of less than 26, which looks cheap compared to other growth stocks. Amazon, the other stock these three money managers own, trades at a forward P/E of 32.

The billionaires who are scooping up Nu stock are onto something here, and although I often caution investors about following billionaire stock pickers into their institutional holdings, Nu looks like a clear winner for the growth-oriented investor.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $20,993!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,736!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $407,720!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 28, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil has positions in Nu Holdings. The Motley Fool has positions in and recommends Amazon and Berkshire Hathaway. The Motley Fool recommends Nu Holdings. The Motley Fool has a disclosure policy.

Billionaire Israel Englander Just Tripled His Investment in This Stock That Warren Buffett and Cathie Wood Also Own was originally published by The Motley Fool

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Chart of the Week: Robinhood's earnings showed investors' love affair with options is growing

02.11.2024 by admin

This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:

One of the biggest changes in investing over the last couple of decades has been the rise in popularity of passive funds as more and more people follow Warren Buffett’s advice to log out of their accounts and simply invest in the S&P 500.

And while this has happened, something else is going on at the other end of the spectrum. In what appears to be a classic barbell-shaped pattern, risk tolerance is both getting more sensible and more risky at the same time.

Options trading is reaching fresh highs for popularity — and it’s playing a greater financial role at brokerages like Robinhood. The company, which just published its quarterly results this week, saw trading volume surge, and with it came a significant jump in options revenue.

As you can see from our Chart of the Week, it’s up to $202 million for the third quarter — and it’s pulled away from the revenue from stock trading.

Robinhood’s innovative free trading transformed the brokerage industry, making the no-cost transactions ubiquitous. And with the key barrier to making moves gone, price-sensitive retail investors piled in, likely aided by stimulus checks. As trading grew significantly, investors also explored derivatives and margin.

“Retail participation in options market trading rose sharply during the pandemic, peaking at 48% in July 2022. While it has bounced around since then, it hit 45% in July 2023,” wrote NYSE’s director of research, Steven W. Poser, late last year. “This data suggests that substantial retail options trading is here for the foreseeable future.”

At the same time, Robinhood continuously beat the drum that it was a place for set-and-forget index fund investors, which was also true. There’s evidence that its retail investors also helped stabilize the market during the 2020 pandemic crash by buying the S&P 500’s dip.

These two things, however, are very different. While the S&P 500 is composed of volatile stocks that are subject to big fluctuations that require risk tolerance, there’s no debate that throwing your lot in with them is an investment. If there are wounds, time will almost certainly heal them.

But options trading, though traditionally used to hedge risk, is an easy way to speculate and place high-risk, high-payout bets. And as is the case with certain types of leveraged investing, the downside can be infinite. As Merrill Lynch’s website notes, “If you write an uncovered call, you face unlimited potential loss, since there is no cap on how high a stock price can rise.”

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Warren Buffett's Berkshire Hathaway Sells Apple Stock, Boosts Cash Pile to Record

02.11.2024 by admin

Warren Buffett’s Berkshire Hathaway reported its profit declined in the third quarter while its cash pile ballooned to a record of more than $320 billion.
Berkshire trimmed its stakes in both Apple and Bank of America, bringing its total proceeds from stock sales this year to about $133 billion.
Berkshire paused stock buybacks last quarter as its share price surged to a record high.

Berkshire Hathaway (BRK.A; BRK.B) on Saturday reported its profit fell in the third quarter while its cash pile swelled to a record as it trimmed its stakes in Apple (AAPL) and Bank of America (BAC).

Berkshire reported third-quarter operating earnings of $10.1 billion, down from $10.7 billion a year ago and $11.6 billion in the prior quarter.

The conglomerate’s cash pile ballooned to a record $320.3 billion from $271.5 billion in the second quarter. The vast majority of Berkshire’s cash ($288 billion) is invested in short-term Treasury bills.

Investors watch the firm’s cash hoard closely for its potential as “dry powder,” money that can be invested in businesses that meet Berkshire’s value-focused acquisition and investment strategy.

Berkshire paused share repurchases in the quarter. Buffett has touted the benefits of repurchases in the past, writing in his 2022 letter to shareholders: “Gains from value-accretive repurchases, it should be emphasized, benefit all owners – in every respect.” But Buffett is famously thrifty, and the price of Berkshire shares surged to a record high in the quarter.

The value of Berkshire’s equity portfolio declined to $271.7 billion from $284.9 billion in the prior quarter. Berkshire has aggressively trimmed its equity positions this year to take profits from a buoyant stock market. The firm has sold $133 billion of stock so far this year, compared with just $33 billion in the first nine months of 2023.

The value of Berkshire’s Apple stock suggests Buffett continued to trim his stake in the iPhone maker. Apple shares rose more than 10% in the third quarter. Yet Berkshire’s stake shrank from $84.2 billion to $69.9 billion, suggesting Buffett sold about a quarter of his position. Buffett had already dumped nearly half of his Apple stock, worth nearly $175 billion at the end of 2023, in the first six months of the year.

The only other major change Buffett made to Berkshire’s five largest equity positions was his well-documented offloading of Bank of America stock. Berkshire began trimming its stake in the lender in mid-July. At the end of the quarter, Berkshire’s stake stood at $31.7 billion, down from $41.1 billion at the end of June.

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58-Year-Old Retiree Living Off Dividends Shares His Portfolio: Top 12 Stocks, ETFs

02.11.2024 by admin

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

Can you live entirely off dividends? This question piques the interest of millions of young Americans thinking about early retirement and breaking free of their 9-to-5 jobs.

A few days ago, someone on r/Dividends – a Reddit discussion board related to dividend investing – asked if anyone on the forum is living off dividends.

“I’m yet to hear testimony of someone who’s actually made it to a point where they are living off their dividends. If you’re out there, could you share your story? What’s it like being free? How long have you invested?” the post said.

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The question received an outpouring of responses, with many investors sharing their personal stories and advice. One response stood out and got our attention.

An investor, who said he is 58 and retired, responded to the questioner that he’s been living off dividends for about three years.

“I started investing about 37 years ago. Retirement off dividends is nice but not really any different from living off any other source of income such as social security. I saved and invested pretty well over the years. I never focused on dividends until the last five years or so. I also don’t suggest young people do so,” he said.

The investor shared how he was able to increase his wealth via investing, leading to his retirement:

“My big break was being mostly cash in early 2020 because I felt the market had gotten too expensive. That was largely luck but it worked great. March 2020 was really fun. I spent between $1-2M on stocks in about 30 days and the resulting market rise after that secured my retirement.”

Trending: 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.

The investor reiterated that young investors should focus on total returns instead of solely dividend income.

“I am not a boglehead nor anti-dividend. I simply say that until you are closing in on needing income to live off, focus on total returns. But don’t interpret that as growth only. Dividends are fine, you simply don’t have to do them until later,” he added.

The investor was requested to share his portfolio details. He shared many stock and ETF names “from memory,” saying his portfolio yield is about 8%.

AbbVie

According to the portfolio details he shared, AbbVie Inc (NYSE:ABBV) was one of the stocks in the portfolio of the 58-year-old investor living off dividends. AbbVie has a dividend yield of 3% and about 50 years of consecutive dividend increases. The stock has gained about 42% over the past year.

Altria

Altria Group Inc (NYSE:MO) has a dividend yield of about 8% with over 50 years of consecutive dividend increases. Altria Group Inc (NYSE:MO) jumped recently after the company reported third quarter results ahead of Wall Street expectations.

Realty Income

With about 30 consecutive years of dividend increases and a 5% yield, Realty Income Corp (NYSE:O) is one of the most popular monthly dividend stocks among income investors on Reddit. The 58-year-old retiree living off dividends said the REIT was part of his portfolio.

Check It Out:

While Realty Income is undoubtedly a solid choice for investors seeking consistent monthly dividend income, it’s important to remember that publicly traded stocks are subject to market volatility. For those looking to diversify their income streams and potentially reduce exposure to market fluctuations, real estate investing through platforms like Arrived is worth considering.

Arrived allows individuals to invest in shares of rental properties for as little as $100, providing the potential for monthly rental income and long-term appreciation without the hassles of being a landlord. With over $1 million in dividends paid out last quarter and a growing selection of properties across various markets, Arrived offers an attractive alternative for investors seeking to build a diversified real estate portfolio.

BlackRock

Investment giant BlackRock Inc. (NYSE:BLK) was also part of the portfolio of a retired investor living off dividends. BlackRock’s dividend has seen a 9.5% rise annually over the past five years. As of 2023, the company has increased its payouts for 14 straight years.

PepsiCo

PepsiCo Inc. (NASDAQ:PEP) is among the safest and most reliable dividend stocks trading in the market, with more than 50 consecutive years of payout increases. However, PepsiCo Inc. (NASDAQ:PEP) recently reported mixed third quarter results and decreased its organic sales growth outlook for 2024.

Target

Yet another dividend king in the list, Target Corp (NYSE:TGT) has raised its payouts for over 50 years without a break and yields 3%. It was a notable stock in the portfolio of the 58-year-old retiree living off dividends.

Procter & Gamble

Procter & Gamble Co (NYSE:PG) has raised its dividends for 68 consecutive years and has a yield of 2.42%. The stock is up about 10% over the past year.

Trending: These five entrepreneurs are worth $223 billion – they all believe in one platform that offers a 7-9% target yield with monthly dividends

Energy Transfer

With a dividend yield of about 8%, Energy Transfer LP (NYSE:ET) is a popular dividend stock on Reddit. The company is relatively insulated from the volatile commodities market since its revenue comes from fee-based contracts. It was part of the portfolio of an investor who lived off dividends.

Schwab U.S. Dividend Equity ETF

The 58-year-old retired dividend investor said he had about 3,500 shares of Schwab U.S. Dividend Equity ETF (NYSE:SCHD) in his portfolio. The ETF tracks the Dow Jones U.S. Dividend 100 Index and exposes investors to some of the top dividend stocks trading in the U.S., including Home Depot, Coca-Cola, Verizon, Lockheed Martin, Pepsi and AbbVie. Since SCHD’s holdings are mostly conservative dividend payers, it’s suitable for investors close to retirement looking for consistent dividend income.

JPMorgan Nasdaq Equity Premium Income ETF

The 58-year-old investor living off dividends said he had 8,500 JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) shares in his portfolio. JEPQ is a high-yield covered call ETF that distributes monthly dividend income. The ETF invests in Nasdaq companies and generates extra income by selling call options. It yields about 9%.

The Virtus InfraCap U.S. Preferred Stock ETF

The Virtus InfraCap U.S. Preferred Stock ETF (NYSE:PFFA) targets income generation and capital appreciation by investing in U.S. stocks with over $100 million market caps. The fund uses about 20% to 30% leverage to boost income potential. PFFA has a dividend yield of about 8.8%. The investor said he owned about 2,000 shares of the fund.

Hercules Capital

Hercules Capital Inc. (NYSE:HTGC) is a business development company with a dividend yield of over 9%. The investor living off dividends had 2,000 company shares in his portfolio. Hercules Capital has more than a decade of consistent dividend growth. Since 2019, the company has paid 16 special dividends. The company provides high-yield venture debt to early-stage biotech and software companies. Historically, Hercules’ company selection has been solid, with a very low rate of defaults.

The changing interest rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider.

For instance, the Ascent Income Fund from EquityMultiple targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000. Benzinga Readers: Earn a 1% return boost on your first EquityMultiple investment when you sign up here (accredited investors only).

Don’t miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga’s favorite high-yield offerings.

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.

This article 58-Year-Old Retiree Living Off Dividends Shares His Portfolio: Top 12 Stocks, ETFs originally appeared on Benzinga.com

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Musk Loses Bid to Dismiss Ex-Twitter CEO’s Severance Claim

02.11.2024 by admin

(Bloomberg) — Elon Musk was dealt a significant setback in a court fight over compensation sought by the top Twitter Inc. executives he fired when he took over the company in 2022.

Think Nvidia Stock Is Expensive? This Chart Might Change Your Mind

02.11.2024 by admin

Nvidia (NASDAQ: NVDA) has been this year’s most influential stock, and it has posted huge gains in the process. The artificial intelligence (AI) leader’s sales and earnings have continued to expand at an impressive pace, and the company’s share price is up roughly 180% so far this year.

That is just the latest leg of an incredible run that has seen the company’s share price soar almost 860% since the beginning of 2023, and more than 2,650% over the last five years. Thanks to these explosive gains, the company’s price-to-earnings multiple has ballooned to 66 as of this writing.

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Such a valuation comes with heavy expectations for growth, and it’s not unreasonable to have concerns the chip company’s stock price has climbed too far, too quickly. But there’s another valuation metric that suggests the red-hot AI stock still has upside potential.

The stock’s gains don’t look excessive in light of Nvidia’s recent business results. For example, revenue rose 205% year over year through the first half of fiscal 2025 (the six months ended July 28, 2024) — and earnings per share were up 285% over the same period.

With expectations for its impressive growth to continue, Nvidia is trading at a forward price/earnings-to-growth (PEG) ratio of roughly 0.36. A PEG ratio of less than 1.0 is often viewed as a signal the stock is undervalued because its anticipated earnings growth is high relative to its earnings-based valuation.

While there’s no doubt Nvidia’s sales and earnings growth will have to decelerate eventually, the company’s leadership position, momentum, and PEG ratio suggest the stock still has room to run. With the launch of its next-generation Blackwell processors set for later this year, the company could have another major sales and earnings catalyst on the near horizon.

Spending on GPUs to power AI applications will undoubtedly go through some cyclical shifts, but the rise of artificial intelligence is still in its early innings — and Nvidia remains essential to that rise.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

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AGNC Sports a Gigantic 15% Yield. Are Investors Paying Too Much for It?

02.11.2024 by admin

AGNC Investment (NASDAQ: AGNC) is a very complex business, but its 15% dividend yield is like a siren’s song to dividend investors traveling along Wall Street. There are a lot of good reasons why income-focused investors should avoid AGNC, and the mortgage real estate investment trust (REIT) added a new one when it reported third-quarter earnings. Here’s what you need to know before buying AGNC.

A property-owning REIT buys a building, like an apartment or warehouse, and leases it out to generate rental income. That’s fairly easy to understand because it’s exactly what you would do if you had a rental property. The only difference is the scale of the asset, with REITs owning institutional-level properties.

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The whole point of a REIT is that it gives smaller investors access to such cash-producing assets, which would normally be outside of their investment capacity.

Money on a fishing hook. — Image source: Getty Images.

AGNC isn’t a property-owning REIT; it is a mortgage REIT. It buys mortgages that have been pooled into bond-like securities. In some ways, it is more like a mortgage-focused mutual fund that just happens to trade as a company. Mortgage bonds can be very hard to track for small investors.

Factors that affect the price of such securities include interest rates, housing market dynamics, mortgage repayment rates, and even the year of creation of the mortgage bond (sometimes called the vintage). As a shareholder, it is highly unlikely that you will be able to keep tabs on AGNC’s portfolio.

There’s another wrinkle here. AGNC Investment isn’t really an income stock; it is a total return investment. Just look at the chart below — the dividend has not only been volatile over time but it has been trending lower for years. The stock price has followed the dividend lower. And yet, if you reinvested the dividend, your total return would have been strongly positive. The big takeaway here is that if you spend AGNC’s dividend on living expenses, like most dividend investors are probably looking to do, you will end up with less income and less capital.

AGNC Investment proudly noted that it sold stock to raise capital when it reported third-quarter 2024 results. That’s not unusual at all; REITs issue stock to fund investments all the time. But here’s the oddity: The CFO noted, “During the third quarter, we issued $781 million in common stock through our ATM program at a considerable premium to our tangible net book value.” To simplify that just a little, the company sold stock for more than the company’s shares were really worth.

Remember that AGNC is similar to a mutual fund. Its value is, essentially, the value of the mortgage bonds it owns, a figure the company reports every quarter. The book value, which would be akin to a net asset value for a mutual fund, ended the third quarter at $8.82 per share. The current price of the stock on Wall Street is around $9.50 per share. So all AGNC did was sell stock at the market, and it was selling that stock at a “considerable premium” to what it was worth.

That is definitely beneficial to existing shareholders, but it seems like it would be a bad idea for most investors to buy something for more than it’s worth. The oddity here is that this particular something has a huge 15% dividend yield. That’s a yield number that could cloud the judgment of even the most conservative income investor.

If you are thinking about buying this REIT, take a second look at the dividend chart above if you actually hope to live off of the income your portfolio generates. AGNC Investment isn’t a reliable dividend stock and probably never will be. Then, consider that management is telling you that the stock price in the market is trading at a “considerable premium” to the actual value of the company.

Here’s the final little complexity with AGNC Investment: It isn’t meant to be an income investment; it is meant to be a total return investment. And as the dividend chart above also shows, reinvesting the dividend leads to a solid total return over time. That’s something that an asset allocation-focused investor will appreciate. If dividend income is your goal, however, overpaying for AGNC Investment’s ultra-high yield is more likely to set you up for pain than gain.

Before you buy stock in AGNC Investment Corp., 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 AGNC Investment Corp. 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 $829,746!*

See the 10 stocks »

*Stock Advisor returns as of October 28, 2024

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

AGNC Sports a Gigantic 15% Yield. Are Investors Paying Too Much for It? was originally published by The Motley Fool

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Month: November 2024