Microsoft's Azure cloud infrastructure business is expanding at a brisk clip, and LinkedIn, which Microsoft owns, is also growing rapidly. Its massively popular Office suite of productivity software is enjoying renewed growth due to the product's transition to a cloud-based delivery model. Its Windows computer operating system continues to produce sizable profits. Technology industry leader Microsoft ( MSFT 1.97%) has several reliable revenue generators, which is a boon for income investors. That attractive and growing income stream makes Verizon a great stock for earning passive income. The telecom giant has also increased its dividend for 16 straight years, the longest current streak in the U.S. Verizon's shares offer a hefty dividend yield (it was more than 6% in late 2022). Verizon generated an impressive $12.4 billion of free cash flow through the first nine months of 2022, giving it the funds to reward its shareholders with $8.1 billion in dividends. Wireless subscribers of telecommunications titan Verizon Communications ( VZ 0.16%) provide a reliable base of revenue and cash flow. Investors who buy shares today can expect many more dividend increases in the years ahead, which makes WM an ideal income stock. WM delivered its 19th consecutive annual dividend increase in late 2021, increasing it by 13%. The company passes on much of its free cash flow to investors via dividends and share repurchases, which boost the share price. Strict regulations and rigid homeowner opposition to new landfills make it unlikely that competitors will be able to wrest market share from the garbage king. Its vast network of existing landfills puts it in a strong competitive position. The provider of waste collection, disposal, and recycling services is the largest such company in North America. WM ( WM -0.91%) excels at turning trash into cash for its investors. Here’s a look at some of the best income stocks to consider: 1. Investors in these companies enjoy the best of both worlds - passive income and stock price appreciation. That’s because investors are typically willing to pay more for stocks that offer rising cash payouts. A stock with dividend payments that increase by 10% annually doubles its cash payout to shareholders in a little more than seven years.ĭividend growth tends to drive a stock's price higher. The best income stocks have consistently increased their cash payouts over time. If a stock that pays a quarterly dividend of $0.25 per share (equal to $1 in annual payments) is trading for $20 per share, then its dividend yield is 5%. Investors earn a dividend yield, which is calculated by dividing the total annual dividend payments by the stock price. Unlike growth stocks, which investors buy primarily because they expect prices to increase, income stocks are attractive to investors who want to earn passive income in cash. A few companies pay monthly dividends, making them ideal income stocks. Most companies pay quarterly dividends, although some provide income only annually or semi-annually. Dividend payments are typically cash disbursements that some companies regularly send to their investors. An income stock is one that pays a relatively reliable dividend - a portion of the company's profits- to its shareholders.
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