Boosting Your Portfolio’s Income: Two High-Yield Picks
Investing in stocks is an excellent way to grow your wealth over time. However, not all stocks provide the same level of returns. Some stocks offer high dividend yields, which can significantly boost your portfolio’s income. In this blog post, we’ll discuss two high-yield stocks that can help increase your investment income.
Stock Pick #1: Tanger Factory Outlet Centers, Inc. (SKT)
Tanger Factory Outlet Centers, Inc. is a real estate investment trust (REIT) that owns and operates outlet shopping centers. As of now, the company offers a dividend yield of approximately 20%. That’s an impressive number, but it’s important to understand the reasons behind it.
Reason #1: Tanger Factory Outlet Centers generates stable revenue through long-term leases with its tenants. These tenants are typically discount retailers, which have proven to be resilient during economic downturns. This stable revenue base allows Tanger to pay out a high dividend yield.
Reason #2: Tanger’s strong balance sheet and cash flow position enable it to continue paying dividends even during economic downturns. The company has a debt-to-equity ratio of 0.5 and a net debt position of $1.3 billion, which is manageable.
Reason #3: Tanger’s dividend payout ratio is below 100%, which indicates that the company can continue paying dividends without struggling financially. In fact, the company has increased its dividend for 27 consecutive years, which is a positive sign of its financial health.
Stock Pick #2: Realty Income Corporation (O)
Realty Income Corporation is another REIT that offers a high dividend yield, currently at around 4.3%. While not as high as Tanger’s yield, Realty Income is still an attractive investment option.
Reason #1: Realty Income is a net lease REIT, which means it leases properties to tenants on a triple-net basis. This means that the tenants are responsible for paying property taxes, insurance, and maintenance costs. This business model provides Realty Income with a stable revenue stream.
Reason #2: Realty Income has a diversified tenant base, which reduces the risk of relying on a single tenant for a significant portion of revenue. The company’s top 10 tenants account for only 22% of its total revenue.
Reason #3: Realty Income has a strong balance sheet and a long history of increasing dividends. The company has increased its dividend for 66 consecutive quarters, which is a testament to its financial health and its commitment to returning value to shareholders.
Effect on Individuals
Adding high-yield stocks like Tanger Factory Outlet Centers and Realty Income to your portfolio can provide several benefits. First, the high dividend yields can boost your investment income, which can help supplement your retirement income or provide additional cash flow. Second, these stocks can help diversify your portfolio by providing income streams that are not correlated with the broader stock market.
Effect on the World
The impact of high-yield stocks on the world can be significant. For individuals, these stocks can provide additional income, which can help improve their standard of living. For institutions, high-yield stocks can provide stable returns and help diversify their investment portfolios. At a broader level, high-yield stocks can help attract capital to real estate and other income-generating industries, which can create jobs and stimulate economic growth.
Conclusion
Investing in high-yield stocks like Tanger Factory Outlet Centers and Realty Income can provide significant benefits to individuals and institutions. These stocks offer stable, income-generating streams that can help supplement retirement income, provide additional cash flow, and diversify investment portfolios. By understanding the reasons behind their high dividend yields and their financial health, investors can make informed decisions about adding these stocks to their portfolios.
- Tanger Factory Outlet Centers offers a dividend yield of approximately 20%
- The company generates stable revenue through long-term leases with tenants
- Tanger has a strong balance sheet and a long history of increasing dividends
- Realty Income offers a dividend yield of around 4.3%
- The company generates stable revenue through net leases with tenants
- Realty Income has a diversified tenant base and a strong balance sheet
- Both stocks can help boost investment income and diversify portfolios
