Investors might feel down amidst prevailing runaway inflation. However, you can do something now to ensure a reliable income stream that outshines inflation.
Purchasing dividend-paying stocks with satisfactory payout rates remains a tested strategy to prepare for retirement, and you can start today. These businesses are known for sharing returns with their stakeholders in dividends. The best thing is that they might keep surging payouts for the coming decades.
Johnson & Johnson (JNJ)
The Oxford University-licensed Johnson & Johnson COVID-19 vaccine wasn’t effective compared to vaccines from Moderna and Pfizer. However, that does not mean you should avoid the stock.
Market players looking for passive income enjoy the company due to its diversification within the healthcare industry. Also, the conglomerate generates steady cash flows and shares the profits with investors in dividend form, offering a 2.5% yield for now.
Moreover, the reliable cash flows by J&J prove reliable as the company has raised dividends for 60 successive years. Though the recent 6.6% might not be a big deal, the one-digit payout uptick would soar with time. Moreover, the firm’s payouts have more than folded since 2010.
It might be the time to invest in J&J as stockholders will receive a 2-for-1 deal. Meanwhile, Johnson & Johnson will spin off the consumer goods sector into a distinct business come 2023.
Baby shampoo and Band-Aids saw somewhat stagnant sales in recent years. Separating the space from the firm’s fast-growing pharmaceutical and med-tech segment might unlock impressive performance.
Medical Properties Trust (MPW)
Medical Properties Trust announced its 9th successive yearly dividend surge early in 2022. However, this real estate company does not raise payouts as reliably or quickly as Johnson & Johnson. Though you might not have decades to enjoy the gradual raises, the share’s current 7.4% yield might supercharge your portfolio within no time.
Medical Properties Trust purchases medical buildings such as hospitals and leases them for highly foreseeable rental payments. Investors might expect the firm to direct cash flows into its brokerage accounts, as TEITS can evade income taxes if they distribute over 90% of returns to their stockholders.
The primary threat to REITs and Medical Properties Trust is rent non-payment because of bankruptcy. For instance, Adeptus Health went bankrupt in 2021, though it recovered from the potential debacle. Moreover, Medical Properties Trust leased the 37 buildings that Adeptus Health occupied.