1 Stock That's Quietly Paying Investors a Monster 5.5% Dividend Yield

Core Insights - The odds of winning a Powerball jackpot have increased significantly, now standing at 1-in-292.2 million compared to 1-in-175.2 million prior to 2015, indicating that lottery ticket purchases are not a sound investment strategy [1] - Despite unfavorable odds, the average American spent $320 on lottery tickets in 2023, suggesting a preference for high-risk gambling over more stable investment options like index funds [2] Company Overview - Brightstar Lottery (NYSE: BRSL), previously known as International Game Technology (IGT), has transitioned to a pure-play lottery stock after divesting its digital gaming and slot machine businesses [5] - The company operates eight of the world's ten largest lotteries, positioning itself as a reliable option for dividend investors seeking consistent returns rather than high-risk gambling alternatives [6] Financial Performance - Following a transaction with Apollo Global Management, Brightstar generated $4 billion in proceeds, with half allocated to debt reduction and a commitment to maintaining its dividend [7] - From 2025 to 2028, Brightstar anticipates generating $7.1 billion in cash, with $1.7 billion earmarked for shareholder rewards, while maintaining an annual dividend obligation of approximately $160 million [8] - The company projects $400 million in annual free cash flow through 2028, supporting the potential for dividend growth through share buybacks [8] Investment Appeal - Brightstar Lottery offers an attractive dividend yield of 5.51%, appealing to dividend investors looking for dependable income [3][4] - The company operates in a recession-resilient segment of the wagering industry, which may provide stability during economic downturns [9]