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Realty Income, Blackstone and 3 other dividend stocks that will give you safe passive income instantly

Jamie Cameron
14. 10. 2022
5 min read

Dividend investing is very popular among many because companies pay investors a set amount each quarter and the best ones increase their payouts over time. It is exciting to receive money for doing essentially nothing. Here are 5 dividend stocks that can help you build a passive income that is also likely to grow over time.

Realty Income Corporation

Realty Income $O+0.1%

The main reason to buy Realty Income stock is to try to get more of its attractive dividend. The REIT pays a monthly dividend that currently yields more than 5%. That's well above the 1.7% dividend yield of, say, an S&P 500 index fund. Meanwhile, it has raised its dividend 117 times since going public in 1994, including the last 100 quarters in a row, easily qualifying the company as a dividend aristocrat.

O stock trades at virtually the same price it did 5 years ago

Realty Income is a REIT that owns and manages commercial real estate in the U.S. and Europe. Its monthly dividends are driven by cash flow from more than 11,400 commercial properties owned under long-term contracts. As of Aug. 3, Realty Income reported results for the quarter ended June 30. Net income available to common shareholders increased 79.3% (YOY) year-over-year due to rising revenues. Net income was reduced by merger and integration costs related to the combination of Realty with VEREIT Inc.

The Blackstone Group $BX+0.0%

Blackstone Inc. distributes the majority of its earnings to shareholders in the form of dividends while still maintaining a healthy payout ratio and ample cash on hand - approximately $10 billion. Currently, its dividend yield is slightly higher than 6%, thanks to recent market volatility that has pushed its stock price down.

BX shares have added nearly 160% over the past 5 years

Blackstone, which manages $940.8 billion in assets, is one of the largest asset management companies in the world. The company earns revenue from its fee-related services, including managing and investing its clients' money and performance incentives when its fund reaches a target return.

Its fee-related earnings (FRE) are up 45% over the past year, while distributable earnings are up 86%. As more money flows into the company while investors look for alternative investment options during the bear market, its profits will continue to grow and so will its dividend.

NextEra Energy $NEE-0.2%

Another company that is well known for its dividend is NextEra Energy. NEE is considered a dividend aristocrat after raising its dividend for at least 25 consecutive years. Since 2006, its payout has grown at a compound annual rate of 9.8%. NextEra currently expects to increase its dividend, which yields 2.2%, at a rate of approximately 10% per year until at least 2024.

NEE shares have more than doubled over the past 5 years

NextEra Energy is a public utility company engaged in the generation, transmission, distribution and sale of electricity. NextEra also has a good mix of solar and wind renewables. Investors may want to consider NEE stock because the company is not directly affected by the price of oil. However, as part of the utility sector, NEE is still poised to benefit from energy consumption. NEE's earnings are expected to grow 13% this year and another 8% in FY23 to $3.13 per share. Revenue is expected to grow 18% in 2022 and another 31% next year to $26.47 billion. NEE's growth and reliable dividend are exactly the reasons why investors may want to consider buying the stock.

Digital Realty $DLR+0.1%

This data center-focused real estate investment trust (REIT) raised its annual dividend for the 17th consecutive year earlier this year, demonstrating its consistent strength. The dividend yield currently stands at 5.2%.

DLR shares are now trading a quarter below where they were 5 years ago

Digital Realty is a data center provider with over 166 data centers in various regions around the world. This global presence means it can offer tailored solutions to meet individual client needs. The company's real estate portfolio consists of approximately 300 buildings and more than 35 million rentable square feet. Digital Realty's customer base includes domestic and international companies from a variety of industries such as content and bandwidth providers, cloud and information technology, financial services and manufacturing companies.

However, the company's stock can't stop falling recently. The Federal Reserve Board's interest rate hike seems to be hitting the sector hard. This REIT has already been falling, but this week's new lows are a stark reminder of the sustained downtrend.

Clearway Energy $CWEN-0.6%

Clearway Energy only started paying dividends 6 years ago. The yield is now about 4.6%, but the company expects that payout to grow toward the high end of its target range of 5% to 8% annually through at least 2026.

CWEN shares have appreciated 50% over the past 5 years

Clearway Energy, based in San Francisco, California, specializes in developing and operating clean energy in the United States with more than 5 GWs of wind, solar and energy storage in operation. According to the company's official website, Clearway Energy operates and provides asset management services for more than 4.1 GW of operating assets and owns an extensive pipeline of renewable energy projects under development and construction.

The company posted a remarkable performance in Q2 2022 across a variety of financial metrics. The company has raised significant capital to expand and broaden its asset base, a move that will be supported by the recent sale of its thermal business.

Potentially even bigger dividends in the future

Realty Income, Blackstone, NextEra Energy, Digital Realty and Clearway Energy are some of the best dividend stocks because they offer higher yielding dividends that should be able to grow further in the future. As a result, investors can collect a higher dividend income per dollar invested today, and this income stream is likely to grow at a healthy pace in the future.

DISCLAIMER: All information contained herein is for informational purposes only and is in no way an investment recommendation. Always do your own analysis.

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