Do you want $1,500 in dividend income in 2024? Invest $25,000 in these 3 top income stocks

By | December 20, 2023

A person smiling and looking at his finances.

Dividend income can increase your overall returns and also provide you with recurring cash flow for your portfolio. That’s a good thing, because it means you don’t have to sell your investments when you need cash. You can just wait for the dividend income to roll in. And while the S&P500 performing well this year, there are still many good, cheap dividend stocks available today that offer high yields.

Three safe long-term dividend stocks that investors can take advantage of today are Kraft Heinz (NASDAQ: KHC), AT&T (NYSE:T)And Pfizer (NYSE:PFE). Below I’ll show you how you can invest $25,000 in these three stocks to receive $1,500 in dividend income next year.

1. Kraft Heinz: $5,000

Food and beverage company Kraft Heinz makes for a promising long-term investment. With strong consumer brands in its portfolio, including Kraft, Heinz, Philadelphia, Oscar Mayer and many others, the company’s businesses are more resilient than those of most other consumer companies. The strong brand power it enjoys is a key reason why this is also a Warren Buffett stock, with Kraft Heinz being one of the most important. Berkshire Hathaway‘s top 10 holdings.

Over the past nine months, the company has demonstrated its resilience, with revenues of $19.8 billion up 4% year over year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) also rose 9%. Kraft Heinz’s strong brands have allowed the company to raise prices and pass on rising costs to consumers, allowing it to continue to deliver good results despite inflation.

The stock pays a dividend that yields 4.4% – that’s almost three times the S&P 500 average of 1.5%. If you invest $5,000 in the stock, you could receive $220 in annual dividend income.

2. AT&T: $10,000

Telecom giant AT&T is once again a good place to invest in next year. With a yield of 6.7%, investors can get a lot of bang for their buck with this dividend stock. With a $10,000 investment, you can expect $670 in dividend income next year.

Investors are concerned about the company’s dividend, but with AT&T posting encouraging results lately, the risk is no longer as high, and that’s reflected in the share price; shares of AT&T have risen in recent months.

For the period ending September 30, the telecom giant reported stable year-on-year revenue growth of 1% as revenue reached $30.4 billion. The company also raised its guidance for free cash flow this year to $16.5 billion (up from its previous forecast of $16 billion). While not a huge increase, the main takeaway for investors is that the company is doing better than expected and cash flow is not an issue, which is a good sign for the safety and stability of the dividend.

3. Pfizer: $10,000

Perhaps one of the best deals on the market today involves Pfizer stock. This year, the stock is down 47%, and investors have been punishing the stock lately for its lackluster financials. But it’s a scenario investors should have expected given declining demand for COVID-19 vaccine revenue. And in the long term, the company plans to build and diversify its business through its pipeline and acquisitions. The company recently completed a major acquisition of cancer company Seagen, which Pfizer says will help add $10 billion in annual revenue by the end of the decade.

It’ll be a bumpy road for Pfizer, as it posted a $2.4 billion net loss last quarter (for the period ending September 30), but as the company scales back operations in light of lower-than-expected COVID demand 19 vaccines. should improve the financial situation.

Investors are deeply discounting Pfizer’s shares because they are only nine times higher than estimated future profits. By comparison, the average stock in the S&P 500 trades at more than 21 times forward earnings.

Not only is Pfizer not concerned about the safety of its dividend, but it recently increased it. Last week, the company increased its quarterly dividend per share to $0.42 – a modest increase of one cent from the previous quarterly payout.

Today the stock yields 6.2%. Another $10,000 invested in Pfizer stock would result in $620 in annual dividends for your portfolio. Combined with the other investments on this list, that would bring your total annual dividend income to about $1,510.

Should You Invest $1,000 in Kraft Heinz Right Now?

Consider the following before buying shares in Kraft Heinz:

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool holds and recommends positions in Berkshire Hathaway and Pfizer. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.

Do you want $1,500 in dividend income in 2024? Invest $25,000 in These 3 Top Income Stocks Originally Published by The Motley Fool

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