The stock market has impressively surged by 15% from its low in late March to recently achieve a record high. However, rising inflation, sluggish economic growth, and overvalued stocks present serious concerns. It is crucial to avoid hastily joining the optimistic trend when the market’s future remains uncertain. Caution is key for investors looking to navigate the current landscape.
If you are considering reducing your exposure to volatile growth stocks and preparing your portfolio for stable and reliable income amid uncertainty, here are three high-yield dividend stocks worth exploring.
Explore High-Return Opportunities with Vici Properties
In light of the potential economic challenges, investing in Vici Properties (VICI +0.49%) may seem like a gamble. Nevertheless, the company has demonstrated resilience, achieving solid performance even in adverse conditions, and consistently increasing its dividends backed by robust earnings growth.
As a real estate investment trust (REIT), Vici owns a diversified portfolio of properties that it leases, distributing the majority of its profits to shareholders without incurring corporate taxes on that income. This structure allows investors to receive a higher portion of the company’s earnings compared to traditional dividend-paying stocks, making it an attractive investment option.
Today’s Change
(0.49%) $0.14
Current Price
$28.79
Key Data Points
Market Cap
$31B
Day’s Range
$28.45 – $28.86
52wk Range
$26.55 – $34.01
Volume
520
Avg Vol
8.9M
Gross Margin
99.25%
Dividend Yield
6.19%
Unlike typical REITs that focus on residential complexes, office spaces, or hotels, Vici’s portfolio includes golf courses, concert venues, sports arenas, retail centers, and casinos operated by major brands like MGM and Caesars Entertainment. This diverse asset base may seem risky, particularly because these sectors are often cyclical and can be adversely affected by economic downturns and reduced consumer spending.
However, Vici’s unique positioning has proven to be resilient. It primarily caters to affluent consumers who tend to maintain their spending even during challenging economic times. While the company faced significant challenges during the COVID-19 pandemic and a brief slowdown in 2022, its profitability has remained surprisingly stable.
With its target market still actively spending, Vici has managed to achieve consistent bottom-line growth, resulting in eight consecutive years of dividend increases. This track record, starting from the REIT’s inception in 2017, showcases a dividend that has nearly doubled over this period. Today, investors can take advantage of a forward-looking yield of 6.2%.
Capitalize on Energy Demand with Enbridge
The rise of renewable energy sources like solar and wind does not indicate a decline in the use of crude oil and natural gas. In fact, the trend is quite the opposite. The International Energy Agency reports that global oil consumption reached an all-time high last year and is on track for further increases this year. The IEA anticipates that crude oil consumption will continue to grow until at least 2050, as the infrastructure for alternative energy is not developing fast enough. Therefore, we still require effective methods for transporting natural gas and crude oil.
This is where Enbridge (ENB 0.39%) steps in.
Enbridge operates an extensive network of over 18,000 miles of pipelines for transporting crude oil and gas, capable of moving nearly 6 million barrels (or the equivalent) daily. The brilliance of this business model lies in its independence from fluctuating prices of natural gas or crude oil; Enbridge serves as a tollbooth, earning revenue based on volume rather than price. As long as drilling and consumption continue in Canada and the U.S., Enbridge will generate steady income regardless of energy price fluctuations.
Image source: Getty Images.
This business model is particularly advantageous for a dividend-paying company. Enbridge enjoys consistent revenue and predictable operating costs, which have enabled the company to increase its annual per-share dividend for an impressive 31 consecutive years. New investors can benefit from a current stock yield of 5.3%, making it a compelling addition to any portfolio.
Protect Your Financial Future with Progressive
Finally, consider adding the insurer Progressive (PGR 0.45%) to your portfolio of high-yield dividend stocks as a strategy to safeguard against market uncertainties. Although the company offers a modest quarterly payout, a significant portion of its dividend is distributed in a lump sum at the beginning of the year, based on profitability from the previous year.
This January, Progressive issued a special annual payment of $13.50 per share, resulting in a trailing dividend yield of approximately 7%. This exceptional yield is primarily attributed to the stock’s underperformance over the past year, which saw a decline of 30% from its peak last May. Investors became wary that the insurance company would struggle to replicate its impressive performance from 2024.
Today’s Change
(-0.45%) $-0.89
Current Price
$195.91
Key Data Points
Market Cap
$114B
Day’s Range
$194.32 – $197.86
52wk Range
$192.02 – $289.96
Volume
93K
Avg Vol
3M
Dividend Yield
7.10%
Interestingly, the market anticipated challenges that ultimately did not materialize. Last year, the total number of active policies increased by 10% year-over-year, leading to an 8% growth in premiums and a remarkable 25% year-over-year increase in net income. This year, the company is on track for even better performance.
While there are no guarantees for another substantial dividend in January, the favorable trends certainly increase the likelihood of a significant payout. However, it is crucial to recognize that Progressive’s dividends can be inconsistent, making it less suitable as a primary holding for those reliant on regular income streams. It serves as an excellent supplementary position in a dividend portfolio, especially for those who are not dependent on consistent cash flow, given its potential for substantial payouts when available.
Henry Caldwell is an insightful author and contributor to the Oxford Wise Finance blog, where he shares his expertise on a wide array of general topics, with a particular focus on finance. With a background in economics and a passion for making complex concepts accessible, he engages readers with practical advice and thought-provoking analysis. Henry’s writing empowers individuals to navigate the financial landscape with confidence, making informed decisions that enhance their financial literacy and overall well-being.
