3 Brilliant High-Yield Stocks to Buy Now and Hold for the Long Term
High-yield stocks are a mainstay of income investing, with many dividend lovers using the cash their portfolios generate to supplement Social Security in retirement. However, you have to understand the businesses you own and how they interact with other investments and your big-picture income needs. Here’s why your income search should start with Federal Realty (NYSE: FRT), Enterprise Products Partners (NYSE: EPD), and, for the right investors, Ares Capital (NASDAQ: ARCC). Federal Realty has an unmatched dividend record As far as real estate investment trusts (REITs) go, Federal Realty is relatively small, with a portfolio of around 100 properties. That said, its strip mall and mixed-use assets are incredibly well located, with higher average incomes and population densities around them than other peers. This is a quality-over-quantity story, and Federal Realty invests heavily in developing and redeveloping its properties to ensure they remain in high demand. Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue » Image source: Getty Images. The most notable fact about Federal Realty, however, is that it is the only REIT to have achieved Dividend King status, with 58 consecutive annual dividend increases. Now add in a well above market 4.1% dividend yield, and you get the makings of a brilliant buy-and-hold high-yield dividend stock that even the most conservative investors will find attractive. Enterprise Products Partners avoids commodity risk Enterprise is one of the largest midstream energy businesses in North America. It owns a vast portfolio of energy infrastructure, including pipelines, storage facilities, transportation assets, and processing facilities. It is a vital partner to energy companies as oil and natural gas are moved around the world. However, the key to the income story is that Enterprise charges fees for the use of its assets; the price of the commodities it is moving isn’t all that important to its cash flows. Avoiding commodity risk has allowed Enterprise to increase its distribution annually for 27 consecutive years, which is basically as long as the master limited partnership (MLP) has been publicly traded. That’s not the only reason to be fond of Enterprise as an income investment. The MLP’s distributable cash flow covers its distribution by a very comfortable 1.7x. And it has an investment-grade-rated balance sheet. There is a huge amount of room for adversity before a distribution cut would be on the table. And with a 5.7% yield, you are getting paid very well to own this energy stock.