It goes without saying that growing savings with support from the stock market has been always been beneficial. However, there are certain tactics which are more dependable in comparison to others. In previous 50 years, and perhaps longer, stocks which have paid dividends have attracted more attention of the investors in comparison to their non-dividend-paying peers. During 50-year period i.e., from 1973 to 2022, average dividend-cutting or eliminating stock in S&P 500 index saw an increase by ~3.95% on an annual basis. In similar time frame, dividend-paying stocks in same benchmark index saw the returns of ~9.18% annually on average, as per Hartford Funds and Ned Davis Research. Therefore, top reliable annual dividend income stocks continue to be source of preference for long-term investors.
As experts say, the high dividend yields stocks which carry higher risk. However, this is not always the case. The top reliable annual dividend income stocks which have been selected provide an unusual combination of increased yields and reliability.
There are a range of benefits to investing in companies which provide healthy dividends, mainly if an investor is planning to invest for the long-term. Apart from providing consistent income, top reliable annual dividend income stocks are in defensive sectors. Therefore, these companies are in a position to tackle economic downturns and that too with lower volatility. Dividend-paying companies have healthy cash balances, and therefore, these stocks are usually strong and stable companies which have good prospects for long-term performance.
With this in mind, let us now have a look at top reliable annual dividend income stocks.
1. Altria Group, Inc.
The company comprises Philip Morris USA, U.S. Smokeless Tobacco, John Middleton, Helix Innovations, and Philip Morris Capital, despite of the fact that it plans to wind down Philip Morris Capital by 2022 end.
The company’s significantly profitable and traditional tobacco businesses showed resilience in the dynamic operating environment during 3Q and first nine months, giving fuel for the company’s business transformation and significant cash returns to shareholders.
On June 1, 2023, the company completed its acquisition of NJOY Holdings, Inc. Its teams executed NJOY’s business plans with speed and strong momentum during full quarter of ownership. NJOY continues to responsibly and sustainably grow business. Efforts of the company are concentrated on several growth initiatives.
In 3Q, the company repurchased 5.9 million shares which involves an average price of $44.26, for the total cost of $260 million. Via first nine months, the company repurchased ~16.3 million shares at an average price of $44.97 worth $732 million. In August, the company’s Board rose its regular quarterly dividend by 4.3% for 58th increase over past 54 years. The company’s current annualized dividend rate came in at $3.92 per share, representing dividend yield of 9.2% as of October 24, 2023.
The company has narrowed its guidance for 2023 full-year adjusted diluted EPS of between $4.91 to $4.98, which exhibits a rise of 1.5% to 3% in comparison to adjusted diluted EPS base of $4.84 in 2022. The company’s 2023 full-year adjusted diluted EPS guidance range consists of planned investments in support of its Vision, including 1) Continued smoke-free product R&D and regulatory preparation expenses, (ii) Supporting of its digital consumer engagement system and (iii) Marketplace activities related to the company’s smoke-free products, which includes planned investments behind the U.S. commercialization of ACE.
2. Realty Income Corporation
The company owns ~11,100 properties, and most of these are freestanding, single-tenant, triple-net-leased retail properties.
It announced operating results for 3 and 9 months ended September 30, 2023. Net income available to common stockholders came at $233.5 million, or $0.33 per share for 3 months ended September 30, 2023 and normalized FFO available to common stockholders was $739.0 million, or $1.04 per share. The company achieved same store rental revenue growth of 2.2% and rent recapture rate of ~106.9% on properties re-leased and it invested ~$2.0 billion across 289 properties and properties under development or expansion at an initial weighted average cash lease yield of 6.9%.
The company’s pending merger with Spirit represents strong future growth opportunity. It expects that the transaction, which should be immediately accretive once closed and which should be dependent on external funding, will result in solid foundation for growth over coming year. During this time, the company is expected to be disciplined and patient capital allocators.
Its 3Q results exhibit the consistency of earnings profile and attractive internal growth of high-quality real estate portfolio and highlighted capabilities of the company’s One Team and platform.
The company closed 3Q in solid financial position, with $3.4 billion of unused capacity on $4.25 billion multi-currency revolving credit facility. In addition, it had access to ~$750 million of equity from unsettled forward sales of its common stock, which resulted in $4.5 billion of liquidity to help its future growth plans.
The company increased its outlook for investments to be ~$9.0 billion for 2023 and it raised bottom end of AFFO per share guidance to new range of $3.98 to $4.01.
3. Ares Capital Corporation
The company is the United States-based closed-ended specialty finance company.
It announced that its Board of Directors declared 4Q23 dividend of $0.48 per share, which is payable on December 28, 2023 to stockholders of record as of December 15, 2023. Strong performance of the company continued in 3Q with year-over-year growth in both GAAP and Core earnings per share. This mainly reflects benefits of increased rates and continued stable credit quality.
During 3Q, it raised over $800 million of new capital, which includes issuance of unsecured notes, further improving its liquidity profile.
From October 1, 2023 through October 18, 2023, it made new investment commitments of ~$410 million, and out of this, $297 million were financed.
Conclusion
While above are some of the top reliable annual dividend income stocks which investors should buy in November 2023, there are several other stocks which provide strong dividends.
Dividend-paying stocks enable investors to gain in 2 ways. First, in the form of appreciation in share price, and secondly, in the form of distributions made by the company. Most companies prefer to announce dividends on quarterly basis.
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