Two Ideal Dividend-Yielding Stocks to Purchase Immediately at a Cost Under $200
Dividend stocks are a proven method of wealth creation. For instance, if you invested $100 in the average dividend stock 50 years ago and reinvested those dividends, you'd now have $8,756 - that's twice the return of the average stock in the S&P 500 and 10 times more than an investment in a non-dividend payer. The best returns came from dividend growers, who transformed their $100 into $14,118, highlighting the importance of companies regularly increasing their payouts.
Two such companies with impressive dividend records are Sun Communities (SUI 1.75%) and VICI Properties (VICI 0.24%). Let's dive into why these dividend stocks are excellent choices for investors with extra cash.
A Leading Player in Niche Spaces
Sun Communities is a real estate investment trust (REIT) focusing on niche property types. As the largest publicly traded owner and operator of manufactured home communities, RV parks, and marinas, it's also the second-largest owner/operator of U.K. holiday parks. Sun Communities' stable income sources come from these properties, with manufactured home communities delivering positive net operating income growth for over 20 years. The durability of this demand and high relocation costs make these communities particularly resilient.
Sun Communities utilizes its stable cash flow to pay dividends and expand its portfolio. Currently, it pays out $0.94 per share each quarter, offering a 3% dividend yield. The REIT has increased its dividend payment for nine consecutive years, setting the stage for continued growth. It expects rental increases of 3.7% to over 5% by 2025 and boasts a strong balance sheet, ensuring ample financial flexibility for future acquisitions.
A Low-Risk Bet for a Growing Income Stream
VICI Properties is another REIT that specializes in owning experiential real estate, like gaming, hospitality, and entertainment destinations. Some of its most iconic casinos are located on the Las Vegas Strip, leased to operating companies on long-term triple net leases. This rental income is both steady and inflation-linked, thanks to contractual escalation clauses.
VICI Properties pays out approximately 75% of its income as dividends, currently offering a dividend of $0.4325 per share quarterly. The REIT has boosted its dividend for seven consecutive years, with an impressive compound annual dividend growth rate during this period. With ample financial flexibility and several growth strategies, such as sale-leaseback transactions and financing partnerships, VICI Properties has the potential to continue increasing its dividend in the future.
Both Sun Communities and VICI Properties offer investors a mix of income and growth, making them attractive no-brainer dividend stocks. With their durable rental income, growing dividends, and expansion opportunities, these REITs have the potential to produce strong total returns in the future. However, as with any investment, be sure to conduct thorough research and consider your own risk tolerance before making a decision.
Enrichment Data:
- Sun Communities (SUI) Dividend Yield and Growth Trends:
- The company has a quarterly dividend distribution of $0.94 per share, resulting in a yield of 2.96% based on the current stock price[1].
- Sun Communities' dividend payout structure has remained consistent, with a projected annual dividend of $3.75 per share in 2024[1].
- VICI Properties (VICI) Dividend Yield and Growth Trends:
- VICI Properties offers a dividend yield of above 5%[4].
- VICI Properties has grown its dividends consistently each year, despite experiencing a steady decline in its share price over the past three years[4].
- Ideal Dividend Stocks:
- Sun Communities is an excellent option for more conservative investors seeking focused exposure to the manufactured housing, RV community, and marina sectors. The company's valuation justifies its premium below $130/share and provides a bargain below $110/share[3].
- VICI Properties appeals to dividend growth investors seeking high-yielding REITs with a history of consistent dividend growth. Its high yield and potential for long-term recovery make it an attractive choice for income-focused investors[4].
[1] https://finance.yahoo.com/quote/SUI/dividends[3] https://www.gurufocus.com/stock-screener/screener/j/sun-communities-gmu.htm[4] https://www.sharespost.com/blog/real-estate-investment-trusts-rei-winners-losers-2022/
Investing in Sun Communities and VICI Properties could prove beneficial for individuals seeking dividend stocks, given their impressive dividend records. Sun Communities, a real estate investment trust (REIT), has managed to pay out dividends consistently for nine consecutive years, currently offering a 3% yield, and VICI Properties pays out roughly 75% of its income as dividends, with a compound annual growth rate over the past seven years.
By investing in these dividend stocks, investors can enjoy a mix of income and growth, as both REITs have durable rental income, growing dividends, and expansion opportunities, which could potentially lead to strong total returns in the future. However, it's essential to conduct thorough research and consider individual risk tolerance before making a decision, as with any investment.
