Realty Income (O 0.95%) is the world's seventh largest real estate investment trust (REIT), with $59 billion of real estate across eight countries. The company's large and diversified portfolio generates stable and growing cash flow. That gives it money to pay dividends and invest in expanding its global real estate portfolio. The REIT has a lot going for it these days. Here are three reasons to consider adding Realty Income to your portfolio this year. This REIT has a lot of attractive investment qualities ...

Investing in dividend-paying ETFs can be a great way to achieve diversification and generate passive income no matter what the broader market is doing. Invest in America's energy infrastructure with this high-yield ETF Lee Samaha (Global X MLP ETF): This ETF invests primarily in midstream master limited partnerships (MLPs) that own natural gas pipelines and storage assets. MLPs trade publicly but are treated as limited partnerships for tax purposes, which gives them advantages when making distributions to i ...

Core Viewpoint - Main Street Capital (MAIN) is highlighted as a strong investment opportunity due to its reliable and attractive dividend income, distinguishing itself from other business development companies (BDCs) [1]. Dividend Policy - BDCs are required to distribute 90% of their taxable income to shareholders, leading to lucrative dividends [3]. - Main Street Capital differentiates itself by paying monthly dividends instead of the typical quarterly payments, ensuring consistent income for investors [4]. - The company has a strong track record, having never cut or suspended its dividend, and has increased its monthly payout by 132% since 2007 [4]. - Over the past year, Main Street has raised its monthly dividend twice, totaling a 4.1% increase [4]. Supplemental Dividends - Main Street Capital also pays supplemental dividends on a quarterly basis, which helps meet the 90% distribution requirement and provides additional income to investors [5]. - Since the end of 2021, the company has consistently paid supplemental dividends every quarter [5]. Dividend Yield - For the third quarter, Main Street Capital declared a total of $1.065 per share in dividends, consisting of $0.765 in monthly payments and a $0.30 supplemental payment [6]. - This results in an annualized dividend yield of around 8%, significantly higher than the S&P 500's sub-1.5% yield, making it an attractive option for passive income seekers [6].

Core Viewpoint - The debate among investors centers on whether to invest in the Schwab U.S. Dividend Equity ETF or a plain vanilla S&P 500 index fund, with the former appealing to those seeking passive income and the latter noted for higher recent returns [1][2] Investment Options Comparison - The Schwab U.S. Dividend Equity ETF offers a 3.9% yield, significantly higher than the S&P 500's 1.2% yield, which is near a record low [4] - An investment of $1,000 in the Schwab ETF yields approximately $39 annually, compared to only $12 from an S&P 500 index fund [5] Dividend Growth and Quality - The Schwab ETF tracks the Dow Jones U.S. Dividend 100 Index, focusing on companies with quality and sustainable dividends, achieving an average dividend growth rate of 8.4% over the past five years, surpassing the S&P 500's 5% average [6] Historical Returns - Over the past 50 years, dividend growers have delivered an average annualized total return of 10.2%, outperforming the stock market's average return of 8% [7] - Recent performance shows the Schwab ETF underperformed the S&P 500 in the short term, but its long-term returns align with historical dividend growth stocks, suggesting potential future outperformance [8] Volatility Considerations - The S&P 500 has a beta of 1.0, while dividend growers have a lower beta of 0.88, indicating they are less volatile [9] Investment Suitability - For most investors, a classic S&P 500 index fund is a solid choice, but the Schwab U.S. Dividend Equity ETF is more suitable for income-focused investors due to its higher yield and potential for long-term outperformance [10]

Group 1: Brookfield Infrastructure - Brookfield Infrastructure owns a globally diversified portfolio of critical infrastructure businesses, generating stable cash flow with 85% of its funds from operations (FFO) coming from contracted or regulated rate structures with a weighted average remaining term of nine years [4] - The company pays out 60% to 70% of its stable cash flow in dividends, currently yielding over 4%, supported by a strong investment-grade balance sheet [5] - Brookfield has a record of raising its dividend for 16 consecutive years at a 9% compound annual rate, aiming for a future increase of 5% to 9% annually, driven by inflation indexation and expansion projects [6] Group 2: W.P. Carey - W.P. Carey is a diversified REIT owning operationally critical real estate in North America and Europe, primarily secured by long-term net leases with built-in rent escalations [7] - The REIT pays out 70% to 75% of its stable income via a dividend yielding more than 5.5%, retaining the rest for new income-generating investments [8] - W.P. Carey has raised its dividend every quarter since late 2023, following a strategic exit from the office sector, and has a history of increasing its dividend for at least 25 years [9] Group 3: Vail Resorts - Vail Resorts operates ski resorts and generates recurring revenue through its season pass program, achieving compound annual growth rates of 8% in revenue and 10% in free cash flow over the past decade [10] - The company has invested over $1.8 billion into existing resorts and $1.9 billion on acquisitions, including notable purchases in Switzerland and Pittsburgh [11] - Vail has paid over $1.9 billion in dividends and repurchased $900 million of its stock over the past decade, with a recent trend of increasing its dividend above pre-pandemic levels, resulting in a yield above 5% [12]

Core Viewpoint - Enterprise Products Partners (EPD) continues to demonstrate strong income generation capabilities for investors through consistent distribution increases and a solid financial profile [1][13]. Distribution Payments - The company recently declared a distribution payment of $0.545 per unit, which is an increase from $0.535 in the previous quarter, marking a 1.9% increase from the first quarter and 3.8% above the year-ago payment level [1][4]. - This distribution has been increased for 26 consecutive years, showcasing a long-standing commitment to returning value to investors [4]. Financial Performance - In the first quarter, Enterprise Products Partners generated $2 billion in distributable cash flow, a 5% increase from the previous year, allowing for a comfortable coverage of its quarterly payment at 1.7 times [5]. - The company retained $842 million in excess free cash flow during the same period, with $60 million returned to shareholders through unit repurchases [6]. Balance Sheet Strength - The company maintains a conservative payout ratio, resulting in a low leverage ratio of 3.1 times, which supports a strong balance sheet and an A-rated credit profile [7]. Growth Prospects - Enterprise Products Partners has a backlog of $7.6 billion in major growth projects, with $6 billion expected to come online by the end of the year, including new gas processing plants and export capacity [9]. - Capital spending is projected to decline from $4 billion-$4.5 billion this year to $2 billion-$2.5 billion by 2026, which will contribute to increased free cash flow [10]. Investment Opportunities - The incremental free cash flow will provide flexibility for further distribution increases, unit repurchases, and growth investments, including organic expansions and acquisitions [11]. - The company has a history of making accretive deals, such as the acquisition of Pinon Midstream for $950 million, which is expected to enhance its distributable cash flow [12].

Core Viewpoint - Investors are looking to enhance passive income through dividend-paying stocks that are currently undervalued, with Devon Energy, APA, and McDonald's being highlighted as notable options in July. Group 1: Devon Energy - Devon Energy's stock has declined by 31% over the past year, influenced by negative sentiment towards energy stocks and increased OPEC production [3] - The company offers a quarterly fixed dividend of $0.24, translating to an annual yield of over 3%, and is projected to generate $1.9 billion in free cash flow in 2025 even with oil prices at $50 per barrel [4] - Devon is expected to maintain cash flow for share buybacks of $200 million to $300 million per quarter and may consider a variable dividend, making it attractive for passive income investors [5] Group 2: APA - APA's stock has dropped 15% year-to-date, contrasting with a nearly 7% rise in the S&P 500, but it offers a forward dividend yield of 5.1% [6] - As a pure-play exploration and production company, APA is highly sensitive to energy price fluctuations, which have negatively impacted its stock [7] - The company is successfully reducing expenses, expecting a $150 million decrease in development capital and a $50 million reduction in exploration capital, with Q1 2025 free cash flow at $126 million compared to $99 million in Q1 2024 [9] Group 3: McDonald's - McDonald's has increased its dividend for 48 consecutive years and generates significantly more free cash flow than its dividend obligations, ensuring sustainability [11] - The franchise model allows McDonald's to operate capital-light, reducing variance in results and maintaining strong free cash flow even during downturns [13][14] - Despite a nearly 10% pullback from its all-time high, McDonald's maintains a reasonable valuation with a dividend yield of 2.4%, although it faces challenges in expanding its market presence [15][16][17]

Core Viewpoint - Plains All American Pipeline's stock surged 10.8% in June following the announcement of the sale of its Canadian NGL business to Keyera for $3.75 billion in cash, which is expected to close in the first quarter of 2026 [1][2]. Group 1: Transaction Details - The sale of the Canadian NGL business will transform Plains All American into a premier midstream pure-play company focused on crude oil [2][4]. - The company anticipates receiving approximately $3 billion in net proceeds from the sale after accounting for taxes and transaction costs [5]. Group 2: Financial Implications - The transaction is expected to enhance cash flows and reduce exposure to commodity price volatility, leading to more durable cash flows and greater financial flexibility [4][6]. - Plains All American's leverage ratio is projected to be at or below the low end of its target range of 3.25-3.75 times, providing flexibility for capital allocation [6]. Group 3: Growth and Investment Strategy - The company plans to utilize its financial flexibility for bolt-on acquisitions to strengthen its crude oil portfolio and optimize its capital structure [5]. - Plains has a history of enhancing shareholder value through strategic acquisitions and repurchases, as demonstrated by its recent $670 million in acquisitions and $330 million in preferred unit repurchases [7]. Group 4: Investment Appeal - Despite the recent stock surge, Plains All American continues to trade at an attractive value with a high yield of over 8%, making it a viable option for investors seeking sustainable passive income [8]. - The company offers two investment options: units of Plains All American Pipeline for tax benefits and shares of Plains GP Holdings for those preferring simpler tax reporting [9].

Group 1: PepsiCo - PepsiCo's dividend yield is approaching 4.5%, significantly higher than the S&P 500's yield of less than 1.5%, marking its highest level this decade [4] - The company has a strong history of dividend payments, recently increasing its dividend by 5%, extending its growth streak to 53 consecutive years, with a 7.5% compound annual growth rate over the past 15 years [5] - PepsiCo's robust portfolio generates substantial cash flow, allowing for investments in product innovation and capacity expansions, with expected revenue growth of 4%-6% annually and high-single-digit earnings per share growth [6] - The company has made strategic acquisitions to enhance its portfolio, focusing on healthier options, which positions it for long-term growth and continued dividend increases [7] Group 2: Vici Properties - Vici Properties offers a dividend yield over 5%, supported by a stable and growing rental income stream from its extensive portfolio of gaming and entertainment properties [8] - The REIT owns 54 gaming properties and has a significant number of long-term triple net leases, with 42% of leases tied to inflation, expected to rise to 90% by 2035, ensuring stable rental income [9][10] - Vici pays out approximately 75% of its cash flow in dividends while maintaining an investment-grade balance sheet, allowing for further investments in income-generating real estate [11] - The company has consistently raised its dividend since its formation, achieving a 7.4% compound annual growth rate, outperforming its peers in the NNN REIT sector [12] Group 3: Investment Outlook - Both PepsiCo and Vici Properties are identified as strong candidates for passive income investments due to their high-yielding dividends and solid financial profiles, with a track record of consistent dividend growth [13]

Core Viewpoint - The company aims to achieve financial independence through the generation of passive income, primarily by investing in high-quality, high-yielding dividend stocks like W.P. Carey [2][12] Company Overview - W.P. Carey is a diversified real estate investment trust (REIT) that owns a portfolio of operationally critical properties across North America and Europe, focusing on single-tenant industrial, warehouse, and retail properties [4] - The REIT operates under long-term net leases that provide stable rental income, with 47% of leases having fixed-rate escalations and 50% linked to inflation [4] Financial Strategy - W.P. Carey aims to distribute 70% to 75% of its stable cash flow as dividends, allowing for a balance between returning capital to shareholders and funding new investments [5] - The company maintains a conservative leverage ratio, targeting the mid-to-high fives range, with a current ratio of 5.8, supporting its ability to pay dividends and grow its portfolio [6] Income Generation - The REIT's dividend yield stands at 5.8%, significantly higher than the S&P 500's sub-1.5% yield, indicating a sustainable income foundation [7] - W.P. Carey has embedded rent growth in its leases, with same-store annual base rent increasing at a 2.4% annualized pace in the first quarter, and up to 4.3% in recent years [8] Growth Drivers - The company plans to invest between $1 billion and $1.5 billion in new properties this year, having already secured nearly $450 million in new investments in the first quarter [9] - W.P. Carey is also focused on selling between $500 million and $1 billion of properties to fund new investments while maintaining its targeted leverage range [10] Dividend Policy - The REIT has consistently increased its dividend every quarter since a strategic shift away from the office sector in late 2023, having a history of annual dividend increases for over 25 years [11]