7 Dividend Stocks You Can Trust Your Retirement To

Dividend investing is no longer as sexy as it used to be. The markets nowadays have gone hyperbolic. When most stocks are experiencing exponential capital appreciation, most investors are chucking dividend investing to the side. However, completely ignoring dividend stocks is not a recipe for success.

Only a company with solid fundamentals, stable business models and excellent outlooks can afford to keep paying out billions of dollars in distributions. With solid performances, capital appreciation will follow. Granted, it may not be as amazing as a Tesla (NASDAQ:TSLA) or Nio (NYSE:NIO). But it’s stable enough not to give you sleepless nights. Long term, it’s an effective way to decide where to put your capital and sets you up perfectly for retirement.

When you are off to celebrate your sunset years, the last thing you need to worry about is news releases impacting your portfolio and burning away half your investment. That’s where these dividend stocks will make your life much easier. Plus, as the chart below shows, these stocks have also outperformed the S&P 500 by a fair margin, proving my point that capital appreciation will follow when performing well.

Before we go into our list here, it’s important to point out that none of the companies on this list are small-capitalization stocks. Several hidden gems are present in that segment. However, this list is not about those companies, primarily because a large market cap will give you a sense of stability and performance.

• Shell Midstream Partners LP (NYSE:SHLX)
• CoreSite Realty (NYSE:COR)
• Brookfield Property REIT (NASDAQ:BPYU)
• AT&T (NYSE:T)
• Gladstone Investment Corp (NASDAQ:GAIN)
• Pfizer (NYSE:PFE)
• B. Riley Financial (NASDAQ:RILY)

Dividend Stocks to Buy: Shell Midstream Partners LP (SHLX)

Dividend Yield: 14.7%

Midstream oil and gas companies are not everyone’s cup of tea because of the depressed oil prices. However, now that vaccines are rolling out throughout the world, we’re beginning to see a return to normalcy, and oil prices are also looking to go back to normal. That’s why it’s not surprising that SHLX stock is up 27.5% in three months. According to analyst estimates tracked by Refinitiv, revenues are expected to rise 9.8% and 17.4% in fiscal 2021 and 2022, respectively. It reinforces the narrative that there are sunnier days ahead for the oil and gas giant.

However, the important thing to note is that if you invest in SHLX stock, it has to be for the income opportunity and not capital appreciation. Dividends have grown by about 26% in the last five years. Despite the stressed outlook, the company chose to maintain its dividend distribution last year. That was a bold move, considering several companies completely halted or, at the very least, cut their distributions. With revenues returning to a healthy position this year, we can hope for an increase. SHLX trades at an enviable 8.6 times forward price-to-earnings.

CoreSite Realty (COR)

Dividend Yield: 4.3%

REITs, or real estate investment trusts, will always find their way onto lists of dividend stocks. To qualify as a REIT, an entity must distribute at least 90% of its taxable income to shareholders annually in the form of dividends. Hence, you will find several REITs in the portfolio of an income investor.

But there are several more reasons to invest in CoreSite Realty. For one thing, the company invests in data centers, one of the hottest growth areas in the world. According to one article, data center revenue is forecasted to grow at a compound annual growth rate (CAGR) of 6.7% to reach approximately a trillion dollars by 2030, more than double the $466 billion in 2020.

No surprises that CoreSite has reported four earnings beats in 2020, per Seeking Alpha data. Northern Virginia, Los Angeles and San Francisco are the areas where the company operates most of its 4.6 million net rentable square feet in operations.

Now let’s talk about the juicy dividend yield, 4.3% as of this writing. Considering the business’s nature, it’s not surprising that COR stock is up 13.9% in one year. However, the excellent quarterly dividend of $1.23 per share also has something to do with it. Its enviable business model is one of the main reasons why the company managed to increase its distribution in 2020, one of the rare instances during Covid-19 times.

Brookfield Property REIT (BPYU)

Dividend Yield: 7.5%

Brookfield, like CoreSite, is also a popular REIT with income investors. However, its business model is quite different from that of CoreSite, since it focuses on retail properties and not data centers. Its portfolio includes 124 retail properties encompassing around 121 million square feet of gross leasable area.

Quite contrary to popular belief, retail isn’t dead. There is pent-up demand for shoppers looking to get back into the thick of things once the pandemic is over. E-commerce is a secular trend, and companies like Amazon (NASDAQ:AMZN) and Alibaba (NYSE:BABA) will continue to do well long into the future. However, that doesn’t mean your local mall is going under any time soon.

However, regardless of what you think about the company itself and its prospects, this list is about dividend stocks. In that respect, BPYU is an excellent stock to have in your portfolio. The dividend payout is a solid 7.36%. Despite a stressed outlook, the company maintained its distribution last year. That kind of commitment is exactly what you need in your portfolio.

AT&T (T)

Dividend Yield: 6.9%

AT&T is the second-largest U.S. wireless carrier. Verizon (NYSE:VZ), T-Mobile (NASDAQ:TMUS), and AT&T have that segment under lock and key. An astounding 40% of its total revenue comes from that segment. However, AT&T is certainly not a one-trick pony. One of its biggest segments is consumer and entertainment, which includes WarnerMedia.

Under the umbrella, you have media assets like HBO, the Turner cable networks, and the Warner Brothers studios. Recently this segment has generated a lot of buzz due to HBO Max, a subscription video-on-demand streaming service launched by AT&T as an answer to Netflix (NASDAQ:NFLX). Warner Bros. has announced that it will release every single one of its movies in 2021 simultaneously on HBO Max and theaters. That should certainly help generate subscriber numbers.

Plus, 5G will become a big portion of the business moving forward. It’s one of the high growth areas that the company can exploit moving forward. The wireless carrier has the fastest nationwide 5G network based on Ookla data and is spending aggressively to acquire more 5G spectrum. Overall, the company is firing on all cylinders, and in the last three quarters, Refinitiv data shows that it reported earnings beat estimates.

Now let’s talk about the dividend. For the last 10 plus years, the company has grown dividends consecutively. Considering the business model of the company, we can expect several more years of consistent dividend growth.

Gladstone Investment (GAIN)

Dividend Yield: 6.9%

It’s tough to categorize Gladstone as anything but an excellent investment considering its business model. A business development company, it invests in debt securities and equity securities that it deems attractive for its portfolio. This approach allows it to have a stable cash flow and earnings providing stockholders with long-term capital appreciation and dividends.

An important thing to note here is that the company is a monthly dividend payer with special dividends sprinkled in whenever appropriate. Much like several other members of this list of dividend stocks, the company did not cut its payout last year.

Pfizer (PFE)

Dividend Yield: 4.4%

Strangely, Pfizer is down 3.2% year-to-date. Pfizer and BioNTech’s (NASDAQ:BNTX) Covid-19 vaccine received Emergency Use Authorization (EUA) due to its 95% efficacy. Investment analyst Morgan Stanley projects that the pharmaceutical giant will receive $19 billion in 2021 and a further $9.3 billion in 2022 and 2023 for the vaccine. Considering all this, PFE stock should be soaring. But it’s not.

I chalk that up to retail traders booking their profits after shares went hyperbolic last year. Regardless, PFE stock remains an excellent investment, not least because of its dividend. Payout grew 5.6% last year, and it has grown 6.9% on average in the last 10 years. Valuation is also enticing with this one. PFE stock trades at just 10.8 times forward price-to-earnings.

B. Riley Financial (RILY)

Dividend Yield: 2.5%

B. Riley Financial is an independent investment bank providing a range of services to corporate, institutional, and high net worth clients. Its capital markets segment makes the most revenue. However, several other business areas such as auction and liquidation, valuation, and appraisal services also drive the company’s revenue higher.

Considering the business’s asset-light nature, it’s not surprising that the diversified financial services company is doing well. In the past year, sales have grown 38.4%. Meanwhile, its gross margin and operating margins are an enviable 87.2% and 39.8%, respectively. They recently hiked their dividend by 33% and the payout is a very manageable 15.5%.

On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.