3 High-Yielding Dividend Stocks That Can Help You Fund Your Retirement Years

If you’re retired, now is a good time to think about switching from growth stocks to safer dividend investments. Not only can they provide you with more stability, but the dividend income they generate can be crucial in helping pay bills and providing you with more money to make your retirement years much more enjoyable.

Three high-yield stocks that are great options for retirees today Coca-Cola (NYSE:KO), Real estate income (NYSE:O)And Enbridge (NYSE: ENB).

Coca-Cola

Coca-Cola has a strong brand that consumers around the world have been familiar with for years. Amid inflation, the country has managed to pass on rising costs to consumers without seeing a significant drop in demand.

Last year, the company’s net sales rose 6% to $45.8 billion. And its operating margin of 24.7% was only slightly lower than the previous year’s 25.4%. For 2024, the company still appears poised for more growth, with Coca-Cola expecting revenue to grow 6% to 7% organically. Meanwhile, earnings per share will rise by at least 8% if we ignore the impact of foreign currencies.

The company’s strength and versatility have been on full display in recent years as Coca-Cola has weathered the impact of some challenging economic conditions and continued to deliver strong results. Earlier this year, Coca-Cola also announced that it would increase its dividend for the 62nd year in a row. The Dividend King is an ideal option for retirees who want a solid income investment. At 3.2%, Coca-Cola’s current yield is more than double S&P500 average 1.4%.

Real estate income

Another good dividend stock for retirees is Realty Income. The Real Estate Investment Trust (REIT) has excellent diversification, which can provide retirees with good long-term stability. Although it has broad exposure to many sectors, supermarkets account for 11% of annualized contractual rent, followed by convenience stores at 10%. Dollar stores, hardware stores, drugstores and restaurants are other key sectors in Realty Income’s portfolio.

REITs have not been popular purchases in recent years due to rising interest rates; income investors have instead looked to other income-producing assets. But interest rates are likely to fall in the future, it’s just a matter of when. And once that happens, Realty Income could become a hot buy again.

Last year, the REIT’s operating funds, or FFO, were $4.07 per share, which was slightly higher than the $4.04 it reported a year earlier. Despite challenging economic conditions, Realty Income has demonstrated excellent resilience. FFO is an important metric that REITs use to assess their performance and profitability and to determine whether their dividend is safe. In the case of Realty Income, investors don’t have much to worry about these days.

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Realty Income’s 5.8% can provide retirees with a solid source of recurring income. And because the shares are down 15% in the past year, investors can buy in at a discount. The REIT has also increased its monthly dividend a whopping 124 times since 1994.

Enbridge

The highest return on this list comes from Canada-based pipeline company Enbridge. The 7.7% yield means you only need to invest $13,000 in the oil and gas stock to collect an annual dividend of $1,000. By comparison, you would have to invest more than $71,000 to get the same payout if you bought shares of the average S&P 500 stock.

Enbridge’s high returns are not a cause for concern as the company is in good shape. The company relies on long-term contracts, which provide it with great stability. Enbridge prides itself on meeting its financial guidelines for 18 years in a row. In 2023, adjusted profit of 5.7 billion Canadian dollars remained unchanged from the previous year.

The company is pursuing acquisitions to strengthen its financial position and enhance its top and bottom line results in the future. And in doing so, it has rewarded investors; the company has increased its dividend 29 years in a row. At a multiple of 17 times earnings, Enbridge is an excellent buy right now.

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Enbridge and Realty Income. The Motley Fool has a disclosure policy.

3 High-Yield Dividend Stocks That Can Help You Fund Your Retirement Years originally published by The Motley Fool