5 Fantastic Dividend Stocks You May Be Overlooking
These five dividend stocks don't receive as much attention as they deserve.
Discovering lesser-known dividend stocks can be a rewarding endeavor for income investors. Ares Capital (ARCC) is a business development company that has increased or maintained its dividend for an impressive 69 consecutive quarters, offering a forward yield of 9.9%. Despite being a BDC, a lesser-known investment vehicle, Ares Capital's management and diversified portfolio of 636 businesses help mitigate risks.
Bristol Myers Squibb (BMY) is another dividend stock that could be overlooked. Despite facing a patent cliff, BMS boasts a 4% forward yield and has increased its dividend for 17 straight years. Its growth portfolio, which now accounts for 59% of revenue, and a promising pipeline of late-stage programs make it an attractive option.
Edison International (EIX) is a utility stock with a forward yield of 5.9%, having raised its payout for 22 consecutive years. Although impacted by California wildfires, Edison's relatively low payout ratio of 37% and strong cash flow enable it to sustain its dividend. MPLX LP (MPLX) offers one of the highest yields in the midstream energy sector, at 8.5%.
The company's dividend has grown by 12.5% annually for three years, benefiting from data center demand for natural gas. MPLX plans to expand the Belvieu Alternative NGL Pipeline to handle 300,000 barrels per day. Lastly, Realty Income (O) and NNN REIT (NNN) are two REITs worth considering. While Realty Income is more widely recognized, NNN REIT has a higher forward yield (6.0% vs. 5.5%) and an even longer streak of consecutive dividend increases (37 years, vs. 35).
NNN also has a higher adjusted funds from operations payout ratio (68%) and a diversified property portfolio with no single tenant contributing more than 5% of annualized base rent.
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