Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
Markets were headed to end 2024 on a downbeat note, dashing hopes for the much-awaited Santa Claus rally. Katerina Simonetti, Morgan Stanley Private Wealth Management senior vice president, recently predicted that market growth will slow down in 2025 and that it will be another year in which investors will focus on the Fed and inflation. In this context, dividend stocks are worth watching for portfolio diversification and consistent income.
Don’t Miss:
About two years ago, someone ran a poll on r/Dividends – a popular discussion board on Reddit – to ask income investors whether anyone was living off dividends. The question received over one hundred comments, with many sharing interesting stories about their dividend investing journeys. An investor said he made around $68,000 in dividend income annually and lived entirely off this income for about four years. However, he found it “extremely boring.”
“So I found something to do in the afternoons and that’s turned into a decent paying part-time gig. And so did my wife. So basically, the dividends have allowed us to CHOOSE what to do with our lives. And it has given us both true freedom. I think that’s the real goal,” the investor added.
The investor, 45, said he used $25,000 of his total dividend income for expenses and reinvested the other $43,000 in dividend or growth stocks.
When asked how much capital it took to reach $68,000 in dividend income, the investor said it was close to $1 million.
The investor shared a long list of his portfolio holdings. Let’s examine some of the top high-yield dividend stocks in this portfolio.
AbbVie
With a 3.6% yield, AbbVie (ABBV) was a key dividend stock in the portfolio. AbbVie shares gained about 11% over the past year. BofA recently rated AbbVie as Neutral with a $191 price target.
Citigroup
Banking giant Citigroup (C) shares rose 33% over the past year. The company has been raising its dividends consistently for more than a decade.
In November, Zim Integrated Shipping Services (ZIM) shares jumped after the company announced a $2.81 per share regular quarterly dividend and a $0.84 per share special dividend. The company also raised its full-year guidance and posted strong third-quarter results.
Ladder Capital Corp
New York-based mortgage REIT Ladder Capital (LADR) was another high-yield dividend stock in the investor’s portfolio. According to Benzinga Pro, the stock yields about 8%.
New Mountain Finance Corp.
According to Benzinga Pro, New Mountain Finance (NMFC) has a dividend yield of about 12%. The business development company reported third-quarter results in October. Total investment income in the quarter totaled $95.33 million, up from $94.35 million last year.
AT&T Inc.
Morgan Stanley started covering AT&T (T) in December with an Overweight rating and set a $28 price target on the stock. The firm highlighted AT&T’s product leadership in fiber. T shares gained 30% in 2024.
According to Benzinga Pro, New York-based mortgage REIT Annaly Capital Management (NLY) pays a quarterly dividend of $0.65 per share, yielding about 13.7%.
Sixth Street Specialty Lending
According to Benzinga Pro, Texas-based business development company Sixth Street Specialty Lending (TSLX) has a dividend yield of about 9.8%. The stock is down 2% over the past 12 months.
Farmers National Banc Corp.
According to Benzinga Pro, Ohio-based banking company Farmers National Banc Corp. (FMNB) has a dividend yield of about 4.8%. The stock fell 2.6% over the past 12 months.
Verizon Communications
Verizon (VZ) has raised its dividends for 18 consecutive years. As of 2024, the stock has a dividend yield of 6.7%, according to Benzinga Pro.
Woodside Energy Group Ltd
Australia-based energy company Woodside Energy (WDS) was among the high-yield dividend stocks in the investor’s portfolio, which collected $68,000 in annual dividend income. In October, the company bumped up its full-year production guidance after strong third-quarter output.
The changing interest rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider.
For instance, the Ascent Income Fund from EquityMultiple targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000. Benzinga Readers: Earn a 1% return boost on your first EquityMultiple investment when you sign up here (accredited investors only).
