On paper, income investing sounds like a no-brainer. Building out a portfolio of long-term investments that are specifically structured to generate regular income can help you build wealth over time and take advantage of compounding. With that said, it takes patience and a knack for finding quality investment options to become successful with this strategy. One of the places that income investors often put a large portion of their capital is the stock market, and specifically in dividend stocks.
These types of stocks can help you take advantage of constant returns over the long run while also offering price appreciation upside. All dividend stocks are not created equal, and it’s important to be very selective when it comes to choosing the best options for your income-generating portfolio. Let’s take a look at 3 of the best dividend stocks for income investors below.
NextEra Energy (NYSE:NEE)
This member of the S&P 500 has a little bit of everything to offer income investors. Consistent dividend growth, defensive characteristics, and room for upside given the company’s exposure to renewable energy make NextEra Energy a top dividend stock to consider buying. NextEra Energy joined the elite group of dividend growers known as the dividend aristocrats after reporting 25 consecutive years of dividend increases back in January. The stock currently offers income investors a 2.17% dividend yield and has declined over 11% in the past month, offering an intriguing entry point for long-term buyers.
NextEra Energy is one of the largest electric power companies in North America and provides electricity to millions of customers, which is a tried-and-true business model that holds up well regardless of what’s going on with the economy. Since this company generates steady cash flows from its Florida Power & Light business and also provides exposure to renewable energy via its NextEra Energy Resources subsidiary, income investors can expect a nice balance of dividend growth and earnings upside.
Realty Income Corporation (NYSE:O)
Real Estate Investment Trusts, also known as REITs, can be a great place for income investors to look because they provide diversification along with steady dividend-income. One of the most popular REITs is Realty Income Corporation, especially thanks to the company’s reputation as being “The Monthly Dividend Company”. As a leading owner of single-tenant retail properties, Realty Income has properties that are leased to over 600 different commercial tenants including convenience stores, drug stores, dollar stores, grocery stores, gyms, and movie theaters. The company typically uses triple net leases, which means that the tenant is responsible for paying for real estate taxes, insurance, and maintenance costs.
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