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While everyone is experiencing FOMO due to the AI craze, many investors are looking to balance their portfolios by adding reliable dividend stocks. Josh Duitz, Abdon’s deputy head of global equities, predicted in January that dividend stocks would play an important role this year. In an interview with CNBC, the analyst said that since 1936, dividend stocks have accounted for about 36% of overall market returns. He believed that even if there was a recession, the dividends would outperform.
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But which dividend stocks should you buy for sustainable long-term income? Take ideas from success stories.
About three years ago, an investor shared a detailed income report on r/Dividends, a vibrant Reddit community of 600,000 members. The 42-year-old investor said his investment portfolio, which includes Roth and taxable accounts, is worth about $500,000.
“That doesn’t include the roughly $1 million 401(k) in the Vanguard index fund,” he added.
Investors also shared their plans and goals for their investment journeys and solicited feedback from other investors.
“For now we are growing everything and reducing it. Of course it depends on the market, but we hope to be able to start using dividends from everything except ROTH as additional side income in about 10 years. At some point, VTSAX will start to shift to higher yields, but I thought it would be okay to leave it for a while and let it grow if we had about 10 years.
He also said he had about $300,000 in cash as a safety net because he was “scared.” Many urged investors to take advantage of this funding as well and avoid storing large amounts of cash. Some curious Redditors asked what he does for a living.
“I used to work in finance. Now I’m semi-retired and do part-time consulting. My spouse works,” he answered.
The investor also explained part of the reason he had so much cash:
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“I’m married. I have one child, a preteen who goes to private school. We live in Chicago and the cost of living is pretty high. It’s really stupidly expensive, but it’s our fault. That’s why I… That’s one reason we have a lot of cash. Schools and housing are pretty expensive.” ”
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This investor was generous enough to share his shares and tell everyone how much he earned in annual dividends from each share. Let’s take a look at some of the most important stocks and funds in his portfolio.
Vanguard Total Stock Market Index Fund Admiral Shares
Vanguard Total Stock Market Index Fund Admiral Shares (MUTF: VTSAX) provides investors with exposure to the entire U.S. stock market, including small-, mid-, and large-cap stocks. Its portfolio consists of over 3,600 stocks. The fund pays dividends quarterly and has a yield of approximately 1.2%.
VTSAX accounted for the largest portion of Redditor’s dividend income, earning about $3,615 annually, according to detailed information released by investors. The investor stated multiple times in discussions about the report that he has more than half of his money invested in the fund.
“I try to keep about $25,000 to $30,000 in each stock. VTSAX is different. Almost half of my money is invested in VTSAX. That’s the main reason why my yield is low.” said.
coca cola
Coca-Cola (NYSE:KO) is one of Redditors’ top dividend stock picks, earning around $1,000 in dividends each month. He said KO stock provided about $672 in annual dividend income. Coca-Cola has increased its dividend for 62 consecutive years. Omaha Oracle Warren Buffett owns $25.5 billion in stock in the beverage giant as of the end of the June quarter.
bristol myers squib
Pharmaceutical company Bristol-Myers Squibb (NYSE:BMY) has a dividend yield of approximately 4.5% and has increased its dividend for 15 consecutive years. The investor, who receives $1,000 in dividend income each month, said he collects about $625 a year from BMY.
suncore energy
For investors who shared detailed income reports, Canadian energy company Suncor Energy Inc. (NYSE:SU) had annual dividend income of approximately $683. This stock has a dividend yield of approximately 4%.
citygroup
With a dividend yield of around 3.5%, Citigroup (NYSE:C) is a bank dividend stock to watch in the portfolio of an investor earning around $12,000 a year. Citigroup announced strong third-quarter results earlier this month. EPS for the quarter was $1.51, beating estimates by $0.20. Sales of $20.32 billion also exceeded Wall Street expectations by about $500 million.
This Redditor said he collected approximately $714 in dividend income from his investment in Citigroup.
verizon communications
According to the details he shared in his income report, Verizon Communications Inc. (NYSE:VZ) provided the Redditor with approximately $1,224 in dividend income per year. Verizon’s dividend yield is approximately 6.5%.
visa
With a dividend yield of less than 1%, Visa Inc (NYSE:V) offers investors a sweet spot where they can enjoy both dividend income and capital gains from stock price appreciation. The payments giant’s stock has risen about 60% over the past five years. The company has increased its dividend for 15 consecutive years. Visa accounted for just $166 of the investor’s $12,000 in annual dividend income.
Regarding Visa, the investor said:
“Visa (V) has a very low dividend (less than 1%), but it’s growing by 20% every year. And I think V has more growth potential than other Hydoc stocks.”
real estate income
Realty Income Corp. (NYSE:O) is one of the most popular real estate dividend stocks among retail investors on Reddit. One investor who earns $12,000 a year in dividends said Realty Income was part of his Roth IRA account and earned him about $814 a year. Real estate income has a dividend yield of 5% or more and dividends are paid monthly. The stock price has increased about 30% over the past year.
Business development and investment company Ares Capital Corporation (NASDAQ:ARCC) is a high-dividend stock in investors’ portfolios, delivering approximately $12,000 in annual dividend income. He earned about $2,697 from this stock, which is part of a Roth IRA account. During the discussion, the Redditor asked fellow investors for the following advice:
“I have ARCC and O in the Roth due to non-eligible dividends, so I would like to keep them as they are, but I am not sure if that is the right approach.”
ARCC’s dividend yield is approximately 8.8%.
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The article 42-Year-Old Investor Earns $12,000 in Dividends on $500,000 Invested, Reveals Portfolio: Top 9 Stocks originally appeared on Benzinga.com.
