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Want Safe Dividend Income in 2024 and Beyond? Invest in the Following 3 Ultra-High-Yield Stocks.
Finding stocks with healthy dividend yields isn’t too tough of a task. Finding above-average yields based on dividends that will be sustained into the foreseeable future, however, is a different story. Sometimes yields are only high because investors are dumping a stock, sensing bad news is on the horizon.
With that in mind, here’s a closer look at three ultra-high-yield stocks paying dividends that are indeed well protected, and should remain so for a long while.
1. British American Tobacco
You likely recognize that the worldwide smoking-cessation movement is still gaining traction, posing a threat to British American Tobacco (NYSE: BTI). Although the parent to cigarette brands Pall Mall, Camel, and Lucky Strike is also developing vaping and heated-tobacco businesses, smoking remains its breadwinner, accounting for more than 80% of its top line.
Except, smoking isn’t anywhere as close to its end as you might think.
Although smoking prevalence is down from 33% of the global population in 2000, the World Health Organization reports there are still roughly 1.3 billion regular smokers on the planet today. Population growth has offset much of the effort to encourage quitting. This progress is slowing down, too. The WHO predicts that by 2030, 18% of the world’s population will still be smoking on a regular basis.
That’s not a suggestion to simply ignore the eventual end looming here. British American Tobacco itself says it’s “committed to building a smokeless world” by developing alternatives to smoking tobacco. It’s just that this inevitable end is years down the road, and even though the company’s top line is now shrinking, there’s still plenty of profit left to not only prolong the business’s fruitful life, but continue funding its dividend as well.
That’s a dividend, by the way, that’s steadily grown for years now, loosely in step with modest profit growth that’s apt to persist. Today’s newcomers will be buying it while the stock’s forward-looking yield stands at a hefty 8.4%.
2. Verizon
If you know Verizon Communications (NYSE: VZ) at all (and you most likely do), then you likely recognize how modest its growth prospects are. Its number of landline phones is shrinking, and Pew Research reports that 97% of adults living in the United States also already own a mobile phone. At best, Verizon can only hope to poach a few competitors’ mobile subscribers without losing any of its own paying customers in the meantime.
What this telecom company lacks in growth potential, however, it more than makes up for in a consistent profitability that supports its equally reliable dividend.
Fact: People are fiercely addicted to their cellphones. Owners are staring at them on the order of four hours per day, checking them several dozen times even without a chime or vibration, according to a survey by Reviews.org. Indeed, most mobile phone owners report feeling anxious without their phone, while some indicate feeling a sense of panic when their device’s battery is nearly depleted.
Looking past the mental health concerns raised by the data, it’s clear that consumers aren’t willing — or even able — to let go of their phones now. They’ll pay to remain connected. Verizon just needs to offer them a competitive price. Given its market-leading scale, that’s typically not a problem for Verizon. The company has reported positive earnings before interest, taxes, depreciation, and amortization (EBITDA) every quarter for well over a decade.
More relevant to income-minded investors, Verizon has not only paid a quarterly dividend like clockwork since the company was formed as consumers know it back in 2000, but has also raised its annual dividend payment every year since 2005. You can plug into this reliable growth while the stock’s forward-looking dividend yield is a solid 6.3%.
3. Ambev
Last but certainly not least, add Ambev S.A. (NYSE: ABEV) to your list of ultra-high-yield dividend stocks to buy while its forward-looking yield stands at just under 6.5%.
Ambev is the combination of a handful of beer companies, with the most noteworthy of these combinations being 2004’s merger with Belgium’s Interbrew, followed by 2008’s acquisition of Anheuser-Busch. You’re of course familiar with Anheuser-Busch’s Budweiser, Michelob, and Busch brands. Ambev owns a far greater number of less familiar craft brands, however, some of which you can only find overseas. In fact, the bulk of the company’s revenue actually comes from Latin America.
That hasn’t exactly mattered a whole lot of late. Although beer consumption is holding up better outside of the United States than it is within it, it’s not exactly seeing robust growth anywhere. Inflation is taking its toll on consumers, crimping demand. In this vein, Ambev’s total volume of beer sold through the first half of this year is barely better than even with last year’s comps.
The message being delivered by the data, however, looks past a couple of key points about the business.
The first of these is simply that true beer fans remain willing to pay a premium for the higher-end beers that Ambev S.A. offers. Industry research house GlobalData notes sales of premium beers are outpacing non-premium beer sales, and are likely to continue doing so for the foreseeable future. This theme jibes with Ambev’s recent revenue growth outpacing its volume growth.
And the second noteworthy detail to consider? Beer is somewhat cyclical anyway. It’s a bit out of favor now, ceding to growing interest in wine and spirits. But give it time. Consumers have a way of coming back around, perpetually searching for something different.
Ambev’s dividend payments are anything but consistent, for the record — the result of an overseas company doing so much foreign business of its own. So, plan accordingly. With its strong yield and track record of long-term growth though, the erratic payouts are worth it.
Should you invest $1,000 in British American Tobacco right now?
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James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends British American Tobacco P.l.c. and Verizon Communications and recommends the following options: long January 2026 $40 calls on British American Tobacco and short January 2026 $40 puts on British American Tobacco. The Motley Fool has a disclosure policy.
Want Safe Dividend Income in 2024 and Beyond? Invest in the Following 3 Ultra-High-Yield Stocks. was originally published by The Motley Fool
CryptoCurrency
Do millionaires keep their money in checking accounts?
The habits of millionaires are a topic of interest when it comes to financial advice. After all, unless they received a large chunk of money as an inheritance or gift, most millionaires had to be smart with their money to get where they are.
Learning how millionaires accumulate wealth — and where they keep it — can provide valuable insights for anyone focused on growing their money. One common question is whether or not millionaires keep money in checking accounts.
Studies show that in recent years, millionaires are keeping a significant portion of their wealth in cash. According to CNBC’s , that portion was about 24% in 2023. While this doesn’t necessarily mean a quarter of a millionaire’s wealth is sitting in a checking account, it does indicate the importance of maintaining liquid assets. And a checking account can be a helpful tool for doing so — whether or not you’re a millionaire.
Anyone, regardless of net worth, can find value in a checking account. Checking accounts allow unlimited deposits and withdrawals, check writing, bill pay, and other features to help you manage your money day-to-day.
While millionaires may keep large portions of their wealth in other deposit accounts and investments, some may use a checking account to manage daily spending. Millionaires also recognize the importance of having liquid assets, like funds in checking and savings accounts. Accessible cash lets you cover unexpected expenses without needing to sell off investments, borrow money, or pay a penalty for tapping your retirement savings early.
The amount of money a millionaire keeps in their checking account is highly personal and depends on preference. However, because checking accounts rarely earn competitive — if any — interest, some millionaires intentionally limit their checking account balance. Some may choose to keep the bare minimum, such as a couple of months’ worth of essential expenses, in their checking accounts, keeping the rest of their wealth in more lucrative assets.
Regardless of preference, it would be surprising for a millionaire to keep more than $250,000 in a single checking account. That’s because the Federal Deposit Insurance Corp. (FDIC) only insures up to $250,000 in deposits per institution, per account holder.
While millionaires may use checking accounts for day-to-day financial transactions, they may also use some of the following accounts in addition to, or in place of, a checking account:
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Savings accounts: Like checking accounts, savings accounts provide a high degree of liquidity, allowing you to access your money as needed for regular or unexpected expenses. High-yield savings accounts, in particular, give millionaires an extra bang for their buck. Some of the best accounts currently offer rates upwards of 4% versus the national average savings account rate of 0.46%.
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Cash management accounts: Cash management accounts (CMAs) pay competitive interest rates while maintaining more accessibility than a savings account. Some CMAs come with a debit card and ATM access, and many provide extended FDIC coverage limits by “sweeping” additional deposits into partner banks. CMAs are available at brokerages, not banks, facilitating easy transfers between investment and cash accounts.
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Money market accounts: Similar to CMAs, money market accounts combine features of checking and savings accounts, often paying competitive interest rates and providing check writing and ATM access. Banks and credit unions offer these accounts, which are federally insured. Minimum opening deposit and minimum balance requirements are often higher than those for standard savings accounts.
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Retirement and tax-advantaged accounts: Millionaires understand the importance of investing for their later years, and retirement accounts such as 401(k)s and IRAs allow them to do so in a tax-advantaged way. Some retirement accounts, like 401(k)s, are offered by certain employers. Others, such as traditional and Roth IRAs, are available to anyone.
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Brokerage accounts: The IRS limits contributions to tax-advantaged accounts, and millionaires typically invest beyond these limits. They do so with taxable brokerage accounts, which can hold investments such as stocks, bonds, and mutual funds without contribution limits.
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Other investments, like real estate, commodities, and art: Some millionaires may decide to diversify their portfolio with other investment types. These could include real estate investments, such as investment properties or real estate investment trusts (REITs); commodities, such as metals or energy products; art; and more.
The amount of money millionaires keep in their checking accounts depends on personal preference. While some millionaires may keep six figures in their checking account to maintain a comfortable cash cushion, others may choose to keep the bare minimum in checking. You wouldn’t expect millionaires to keep more than $250,000 in a checking account, however, because balances over this threshold aren’t typically insured.
There’s no single bank that’s a favorite among millionaires; it’s another matter of preference. However, millionaires are likely to bank with institutions that offer private banking to those who meet specific financial requirements. Private banking may include wealth planning services, waived fees, dedicated bankers, and additional perks. J.P. Morgan Private Bank, Citi Private Bank, and Bank of America Private Bank are among some of the most popular banks for millionaires.
Billionaires may have checking accounts, but they likely use accounts that cater to ultra-high-net-worth individuals. These accounts may come with perks such as a dedicated banker, waived fees, and competitive interest rates. Alternatively, billionaires may opt for a cash management account with higher FDIC insurance coverage limits and checking account features.
No rule says you can’t have a million dollars in a checking account, but FDIC insurance typically only covers up to $250,000. Plus, you can get a bigger return on your investment by keeping $1 million elsewhere. One alternative is a cash management account, which acts like a checking account but generally earns higher interest. Plus, many cash management accounts insure more than the standard $250,000 by sweeping funds into multiple partner banks.
CryptoCurrency
Lumen And Meta Join Forces To Boost AI With Flexible, On-Demand Network Solutions
Lumen Technologies, Inc. (NYSE:LUMN) shares are trading higher on Monday after the company announced it is partnering with Meta Platforms, Inc. (NASDAQ:META) to significantly increase Meta’s network capacity and help drive its AI ambitions.
Lumen’s partnership offers Meta enhanced flexibility with secure, on-demand bandwidth, supporting its complex computing requirements and enabling it to serve billions daily.
Ashley Haynes-Gaspar, Lumen’s EVP and chief revenue officer, said, “We’ve transformed our company to meet this demand. As Meta’s customers use more AI services across its platforms, we’re helping provide Meta with a seamless, effortless, and flexible network that will meet its growing needs.”
Lumen Technologies said its Private Connectivity Fabric enables long-term network capacity for Meta’s AI.
Alex-Handrah Aimé, director of Meta’s Network Investments stated, “Our AI tools are performing increasingly more complex tasks including enabling conversations in a variety of languages and translating text to images in real time, while helping people interact with the world around them in new, immersive ways.”
Lumen will report third quarter 2024 results on November 5, 2024.
Investors can gain exposure to the stock via Invesco S&P SmallCap Utilities & Communication Services ETF (NASDAQ:PSCU) and First Trust Cloud Computing ETF (NASDAQ:SKYY).
Price Action: LUMN shares are up 9.50% at $7.38 at the last check Monday.
Image via Shutterstock
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