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All It Takes Is $2,000 Invested in Each of These High Dividend Stocks to Help Generate Over $280 in Passive Income Per Year
The Motley Fool· 2025-07-19 10:15
Core Viewpoint - The U.S. markets have experienced volatility, but dividend-paying stocks can provide substantial passive income even during market fluctuations [1] Group 1: Verizon Communications - Verizon offers a sustainable 6.5% dividend yield, translating to $2.71 annually per share, and has raised its dividend for 18 consecutive years [5][6] - The company reported its highest-ever quarterly adjusted EBITDA of $12.6 billion in Q1 2025, with free cash flow of $3.6 billion and a dividend payout ratio of 64.2%, indicating strong earnings to cover dividends [6] - Verizon's convergence strategy has reduced customer churn by 40% to 50%, leading to predictable cash flows [7] - In Q1, Verizon added 339,000 broadband customers and 308,000 fixed wireless customers, aiming for 100 million premises with fiber and fixed wireless access [8] - The adjacent services business is expected to reach a $2 billion annual run rate by the end of 2025, with management guiding for 2% to 3.5% adjusted EBITDA growth [9] - Verizon is positioned as a smart buy for investors seeking passive income from high-quality companies [10] Group 2: AT&T - AT&T offers a solid 4.1% yield, translating to $1.11 per share annually, with a 68.1% dividend payout ratio, allowing for potential dividend increases [11] - The company reduced its net debt by $32 billion since 2020, ending Q1 2025 with a net debt-to-adjusted EBITDA ratio of 2.63 [12] - AT&T's revenues increased by 2% to $30.6 billion in Q1, with net income rising 23.6% year over year to $4.7 billion [12] - The company operates the largest fiber network in the U.S., expecting to reach 30 million fiber locations by mid-2025 and 50 million by 2029, driving strong customer growth [13] - Bundling services has created stickier customer relationships, making AT&T an appealing pick for income investors seeking defensive dividend growth [14] Group 3: AbbVie - AbbVie offers a 3.52% yield with an annual payout of $6.56 per share and has a history of increasing dividends for 53 consecutive years [15] - Despite losing patent protection for Humira, AbbVie has diversified its portfolio and reduced reliance on the drug, with next-generation drugs generating $5.1 billion, a 65% year-over-year increase [17] - The company is focusing on strategic investments, including a $350 million obesity partnership and a $2.1 billion acquisition of Capstan Therapeutics, positioning itself in high-growth areas [18] - Recent IPR&D and milestone expenses have negatively impacted second-quarter earnings guidance, but these deals may drive long-term growth [19]
Up Over 40%, Is this Ultra-High-Yield Dividend Stock Still Worth Buying for Passive Income?
The Motley Fool· 2025-07-16 07:06
Core Viewpoint - EPR Properties has experienced a significant stock rally of over 40% in the past year, leading to a dividend yield of 5.8%, raising questions about its attractiveness for passive income seekers [1] Group 1: Performance and Growth Drivers - EPR Properties reported a 5.3% growth in funds from operations (FFO) in the first quarter, driven by contractual rental increases and portfolio expansion investments [2] - The company invested $263 million last year in acquisitions and development projects, including attractions and fitness venues, contributing to rising earnings and share price [3] - Declining interest rates, with the Federal Reserve cutting rates by one percentage point last year, have made borrowing cheaper for REITs, positively impacting EPR Properties [5] Group 2: Financial Health and Valuation - EPR Properties expects to generate between $5.00 and $5.16 per share of FFO this year, indicating a 4.3% growth from the previous year [8] - The REIT trades at about 12 times its FFO, which is lower than many peers that trade in the 15-to-20 times range, contributing to its high dividend yield [8] - The company maintains a conservative dividend payout ratio of around 70%, with a monthly dividend of $0.295 per share, reflecting a sustainable financial foundation [9] Group 3: Investment Strategy and Future Outlook - EPR Properties has an investment-grade balance sheet and plans to sell $80 million to $120 million in noncore assets this year to enhance financial flexibility [10] - The company can invest $200 million to $300 million annually into new property investments without external funding, aiming for a 3% to 4% annual growth in FFO [11] - With improved cost of capital, EPR Properties is positioned to increase its investment pace and has lined up $148 million in development projects for the next two years [11] Group 4: Passive Income Potential - The combination of falling interest rates and improved growth prospects makes EPR Properties an attractive option for passive income, despite its recent price increase [12]
