How to Build a Reliable Passive Income Stream with Dividend Stocks

 

Building a reliable passive income stream is a goal for many investors. Dividend-paying stocks can be a great way to generate steady cash flows, and there are a number of high-quality options to choose from. 

Here are three dividend stocks that offer the potential for sustainable growth and income:

AT&T

AT&T is a mature company with a long history of dividend payments. The company has recently taken steps to streamline its operations, which has resulted in improved profitability. AT&T also has a large and stable customer base, which provides a reliable source of cash flow. The company currently yields 6.82%, which is well above the average yield for the S&P 500.

Medical Properties Trust

Medical Properties Trust is a real estate investment trust (REIT) that owns hospitals and related healthcare facilities. The company has a high dividend yield of 15.1%, which is due in part to the fact that REITs are required to distribute at least 90% of their taxable income to shareholders. Medical Properties Trust also has a strong track record of dividend growth, with the dividend increasing by an average of 10% per year over the past five years.

Ares Capital

Ares Capital is a specialty finance company that provides debt and equity financing to middle-market companies. The company has a high dividend yield of 10.26%, which is supported by its strong cash flow generation. Ares Capital has also increased its dividend by an average of 10% per year over the past five years.

While dividend payouts are not guaranteed, these three stocks offer the potential for sustained growth and income. By diversifying your portfolio with these dividend stocks, you can build a reliable passive income stream that has the potential to grow steadily over time.

Other High-Yield Dividend Stocks to Consider

In addition to the three stocks mentioned above, there are a number of other high-yield dividend stocks that offer the potential for sustainable growth and income. Some of these stocks include:

• Realty Income (O): A REIT that owns single-tenant properties leased to retail tenants. O yields 4.6%.
• Brookfield Infrastructure Partners (BIP): A global infrastructure company that owns assets in the utilities, transportation, and energy sectors. BIP yields 4.4%.
• Enterprise Products Partners (EPD): A midstream energy company that owns pipelines, storage facilities, and other assets. EPD yields 5.2%.
• American Tower Corporation (AMT): A real estate investment trust that owns and operates wireless communication towers. AMT yields 2.9%.

It is important to do your own research before investing in any dividend stock. Consider the company's financial strength, dividend history, and growth prospects. You should also consider your own risk tolerance and investment goals.