Two High-Reward Stocks Potentially Easing Wealth Accumulation Process
Investing for wealth accumulation often centers around capital appreciation, but it's crucial to consider dividends, especially when reinvested. Two high-yield stocks that offer this opportunity are Realty Income (O) and Vici Properties (VICI).
The Magic of Dividend Reinvestment
Since the creation of the SPDR S&P 500 ETF Trust (SPY) in 1993, its share price has risen approximately 1,250%. But this impressive figure is even more impressive when you add in the dividends it has paid out over the years. By reinvesting these dividends, the total return for the ETF surpasses 2,300%. This simple yet effective strategy can yield significant wealth growth, making it an attractive investment option for those seeking a passive income source.
Investing in Reliable Dividend-Paying Stocks
Given the current market conditions, Realty Income and Vici Properties are worth considering. Both stocks have impressive histories of consistent dividend payouts, making them ideal for dividend reinvestment strategies. Let's delve deeper into their individual strengths.
Realty Income - "The Monthly Dividend Company"
Realty Income is a real estate investment trust (REIT) with a dividend yield of approximately 6%. Its dividend has increased annually for decades, averaging over 4% annual growth. This equates to a total return of around 10%, which is within the expected range for the broader market. Adding to its appeal is its low dividend yield, which is currently near its highest level in the past decade, suggesting it may be undervalued in the current market.
Realty Income has a strong financial profile, with an investment-grade-rated balance sheet and a diverse portfolio that spans the United States and Europe. It primarily invests in retail and industrial properties but is expanding its reach to incorporate data centers and casinos. Realty Income is a reliable income generator, providing investors with steady, reliable returns from their investments.
Vici Properties - A Younger Competitor with Great Potential
Established in the early 2010s, Vici Properties has an abbreviated history in comparison to Realty Income. However, its average remaining lease length is an impressive 41 years, with 90% of its rents protected by inflation-linked leases. This means its rental income will naturally increase over time without the need for additional properties.
Vici Properties focuses heavily on casino assets but is also looking to diversify its portfolio by adding experiential assets. Its strong financial position and property portfolio make it well-positioned for success. Currently, Vici Properties offers a dividend yield of around 5.9%, which is expected to grow at a rate of 7% annually, based on data from its historical performance.
Slow and Steady Wins the (Wealth) Race
Realty Income and Vici Properties may not be the most exciting stocks to invest in, but their consistent dividend payouts make them reliable wealth builders. They offer a passive income source for investors looking to build their wealth slowly while minimizing risk. These stocks may be overlooked in favor of trendier investments, but the long-term potential of their steady returns should not be underestimated.
- The strategy of reinvesting dividends, as demonstrated by the SPDR S&P 500 ETF Trust (SPY), can significantly boost the total return, surpassing 2,300% since its creation in 1993.
- Given the consistent dividend payouts of Realty Income and Vici Properties, these high-yield stocks are ideal for dividend reinvestment strategies, offering attractive income sources for investors seeking passive wealth growth.
- Realty Income, often known as "The Monthly Dividend Company," boasts a dividend yield of approximately 6%, with an impressive decade-long low dividend yield, suggesting potential undervaluation in the current market.
- With an average remaining lease length of 41 years and 90% of rents protected by inflation-linked leases, Vici Properties has a strong financial position and the potential to grow its rental income naturally over time, offering an expected 7% annual dividend growth rate.
