High-Yielding Dividend Stocks Outperform Bonds: Kinder Morgan, Verizon, WP Carey in Focus

Sep 19, 2023 | blog

Investors searching for to generate revenue are turning their consideration in the direction of high-yielding dividend shares as an alternative choice to bonds. Three firms which have been providing greater revenue yields than many high-quality fixed-income investments are Kinder Morgan (NYSE:KMI), Verizon (NYSE:VZ), and W.P. Carey. The dividends from these companies not solely present a gradual revenue stream however are additionally projected to extend sooner or later.

On Monday, Kinder Morgan, a pipeline large listed on the NYSE, was highlighted for its 6.6% dividend yield. This surpasses the yield from most high-quality bonds together with the 10-year U.S. Treasury bond and the common investment-grade company bond. Over the final six years, the corporate’s dividend has seen an upward development, with a current improve of two% for 2023. After paying dividends, Kinder Morgan retains half of its steady money circulation which is predominantly reinvested in increasing its vitality infrastructure operations. The firm plans to take a position round $2.1 billion this 12 months in numerous capital tasks resembling pipeline expansions and renewable pure fuel manufacturing services.

Verizon, a telecom large listed on the NYSE, gives a dividend yield of seven.9%. The firm not too long ago marked its seventeenth consecutive 12 months of dividend development with a rise of 1.9%. Following a $10 billion spending program to spice up its 5G community plans, Verizon expects to unlock roughly $1.8 billion in money circulation every quarter. This will likely be initially used to fortify its strong investment-grade steadiness sheet. The firm’s investments in 5G and cost-saving initiatives are anticipated to extend income and cut back curiosity expense respectively, resulting in an increase in free money circulation.

W.P. Carey, a diversified Real Estate Investment Trust (REIT) listed on the NYSE, provides a dividend yield of 6.7%. The firm has elevated its dividend fee yearly because it was listed on the general public market in 1998. It generates steadily rising rental revenue from its large-scale actual property portfolio via long-term web leases with tenants. These leases usually function an annual rental fee escalation clause tied to the inflation fee or a set fee. W.P. Carey’s development is pushed by acquisitions of income-producing actual property in sale-leaseback transactions, build-to-suit improvement tasks, and single-tenant web lease properties.

In a local weather the place traders are searching for dividends with greater yields than many bonds, these three firms stand out. Their payouts are predicted to extend over time, probably offsetting the affect of inflation on buying energy.

This article was generated with the help of AI and reviewed by an editor. For extra data see our T&C.

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