“If you don’t find a way to make money while you sleep, you will work until you die.” That’s a quote from billionaire investor Warren Buffett which emphasizes the importance of making your money work for you. By generating income without having to work, you improve your financial position and potentially set yourself up for an early retirement. Amid today’s challenging economic conditions, that may seem unlikely.
However, by investing in dividend stocks and accumulating wealth over time, retiring early is possible. Three high-yielding stocks that can help you generate some decent dividend income right now are Pfizer (NYSE: PFE), Bank of Nova Scotia (NYSE: BNS), and AT&T (NYSE: T). By investing $30,000 into these three stocks, you can expect to collect about $2,000 per year in dividends.
1. Pfizer
Pfizer is a top pharmaceutical company, but lately investors have grown bearish on the stock. The company’s revenue from COVID products is declining, and it’s also facing multiple patent cliffs which only exacerbate concerns relating to its top line.
But Pfizer has been investing into both its pipeline and through acquisitions to help grow and diversify its operations in the future. Last year, it acquired oncology company Seagen for $43 billion. It estimates that that acquisition alone could generate at least $10 billion in revenue by the end of the decade.
Investing in Pfizer requires a bit of a leap of faith that the company’s strategy and plan will pay off. But this isn’t a terribly risky stock to be investing in. While profits nosedived last year due to a drop in sales along with restructuring and asset impairment charges, the company still generated positive free cash flow of nearly $5 billion.
Pfizer has a plan to add $25 billion in revenue to its top line by 2030, and if it’s successful, investors who pass on the stock today could regret that decision in the future. At just 12 times its estimated future earnings, the stock is trading at an incredibly cheap valuation.
And Pfizer’s still paying its dividend. At a reduced price, its yield is up to 6.5%, which means that a $10,000 investment in the company would be enough to generate $650 in annual dividends.
2. Bank of Nova Scotia
Investors can collect an even higher yield from the Canadian-based Bank of Nova Scotia, which is currently yielding around 6.7%.
As it is one of Canada’s top chartered banks, investors are getting a fairly safe investment with this stock. The bank’s geographic profile, which includes focusing more on emerging markets, means it’s a more volatile and thus riskier investment than its peers. But Bank of Nova Scotia, also known as Scotiabank, still makes for a safe long-term investment. The company has paid a dividend since 1833.
In its most recent quarterly results, for the period ended Jan. 31, the company’s numbers still looked strong. Revenue totaling 8.4 billion Canadian dollars was up 6% year over year, and net income of CA$2.2 billion improved by 25%.
At less than 10 times its estimated future profits and 1.1 times its book value, Scotiabank makes for another cheap dividend stock to own. Investing $10,000 into the stock could generate approximately $670 in annual dividends for your portfolio. And with the bank stock often raising its payouts, that dividend income is likely to rise over time.
3. AT&T
Rounding out this list is telecom giant AT&T. The stock has struggled to gain momentum this year as high interest rates and lackluster growth have resulted in investors looking elsewhere for good investment opportunities. The company’s recent data breach has piled even more bad press on to an already beaten-down stock. In three years, shares of AT&T are down 27%.
But the problems facing the stock today are transient in nature and shouldn’t affect your long-term outlook on AT&T. As a leading telecom provider, it’s in a good position to benefit from population growth, greater data usage, and people upgrading their phones. And it’s not as if the company isn’t growing; for the last three months of 2023, AT&T’s revenue rose by 2.2% to $32 billion. Its operating cash flow of $11.4 billion was also 10% higher than in the previous year.
Despite what may look like an unsustainably high yield at more than 6.7%, AT&T’s dividend isn’t in any imminent danger, as the business remains solid. Investing another $10,000 into AT&T stock could generate a little more than $670 in dividends.
When combining all these investments, that would put your total at close to $2,000 in dividends from $30,000 in total invested across these three dividend stocks.
Should you invest $1,000 in Pfizer right now?
Before you buy stock in Pfizer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $488,186!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
