Income stocks are some of the go-to stocks to buy if you want to build a portfolio that pays now rather than later. Regular dividends give you an income stream that can be used to cover expenses. They also tend to represent both profitable and stable companies with low risk. That’s why income stocks are a popular choice when building a portfolio for retirement.
For this list of stocks to buy, I’ve grouped together seven companies that are not only proven dividend payers but also each earn a high total grade on my Portfolio Grader.
But that’s not all — you’ll even find a pick or two in this bunch that manages to land firmly in the income stocks category while also delivering impressive growth. To me, that’s a killer combination.
So, without further ado, here are some of the best income stocks for your money:
- Citizen’s Financial Group (NYSE:CFG)
- Extra Space Storage (NYSE:EXR)
- Iron Mountain (NYSE:IRM)
- Prudential Financial (NYSE:PRU)
- Public Storage (NYSE:PSA)
- Seagate Technology (NASDAQ:STX)
- Williams Companies (NYSE:WMB)
Income Stocks to Buy: Citizen’s Financial Group (CFG)
Citizen’s Financial Group is one of the largest retail banks in the United States, with 1,000 branches in New England, the Mid-Atlantic region and the Midwest. You want stability? This bank dates back to 1828. It also has $187 billion in assets and $151 billion in deposits.
Following the 2008 global financial crisis, Citizen’s took a number of steps to strengthen its position. This included a reduction of “exposure to non-core assets,” improving its geographic footprint and attaining a “more balanced business mix across our commercial and consumer businesses.” The bank also spent over $1 billion in infrastructure and technology upgrades over a four-year period. This all positions CFG well for long-term stability.
Maybe most importantly, though, Citizen’s Financial Group pays a quarterly dividend. Its latest dividend payment on May 13 was 39 cents. CFG stock’s current dividend yield is 3.40%. This pick of the stocks to buy earns a “B” rating in Portfolio Grader.
Extra Space Storage (EXR)
Self-storage is a high growth market and one that is often described as being recession-proof. Back in 2019, the market was worth $87.65 billion and it’s now projected to hit $115.62 billion by 2025. Plus, you can count high-profile investors like Bill Gates among those that favor self-storage companies (although Gates has not invested in this particular name).
Extra Space is a pure play on self-storage, managing 1,032 storage locations across the U.S. (a combination of self-owned locations, joint ventures and third party-owned locations). In total, Extra Space Storage controls 1.4 million units across the country, making it one of the largest managers of self-storage properties in the States.
This company’s latest quarterly dividend was $1 per share. The current dividend yield is also 2.43%. In addition, EXR has delivered a very respectable 88% return over the past five years. With an “A” rating on Portfolio Grader, EXR stock is a solid portfolio pick.
Income Stocks to Buy: Iron Mountain (IRM)
The name “Iron Mountain” exudes safety. That’s intentional, of course. This next entry on my list of stocks to buy specializes in safeguarding as well as thoroughly destroying data. Currently, Iron Mountain counts over 225,000 companies as customers, with over 95% of Fortune 1000 companies choosing Iron Mountain to secure their data.
The question is, however, should you trust Iron Mountain as an income stock for your portfolio? From here, it looks like IRM is a no-brainer. For one, the company has been paying quarterly dividends for over a decade. So, it already has a proven track record. Plus, the current dividend yield for this pick of the stocks to buy is a generous 5.69% according to Seeking Alpha.
At time of this writing, IRM stock had an “A” rating in Portfolio Grader.
Prudential Financial (PRU)
Next up on this list of stocks to buy is Prudential Financial. Founded in 1875, this company has been in business for over 140 years. With $1.66 trillion in assets under management, Prudential is also one of the largest insurance companies in the country.
As it points out, PRU has also helped Americans through some of the toughest crises, including two World Wars, the Spanish Influenza pandemic of 1918, the Great Depression, the 2008 global financial crisis and more — as well as this past year’s Covid-19 pandemic. Basically, this name has staying power.
When it comes to this income stock as an investment, though, it also pays some hefty quarterly dividends. Prudential Financial’s dividend yield is currently 4.55% and it’s last payout was $1.15 per share. Right now, PRU stock has a solid “B” rating in Portfolio Grader.
Income Stocks to Buy: Public Storage (PSA)
Like EXR stock, this next entry on my list of stocks to buy is a play in the self-storage space. Of course, I’ve already made the case for why self-storage is a great market to target if you want a recession-proof stock. However, if you’re still unconvinced, you may want to take a look at the statistics.
At the moment, 10.6% of U.S. households rent a storage unit — and they pay an average of $89.12 per month to do so. That is a huge market. The thing is, people don’t just rent storage units when they’re having tough times and are forced to downsize. Storage is a need no matter what stage of life.
In operation since 1972, Public Storage is the “largest owner and operator of self-storage facilities in the world.” Needless to say, this is a solid company. Today, PSA has been paying dividends consecutively for some 25 years and offers a 2.63% dividend yield. PSA stock currently earns an “A” rating on Portfolio Grader.
Seagate Technology (STX)
Next on this list of stocks to buy, Seagate is another company that has built its business around storage — in this case, digital storage. The company is the world’s second-largest maker of hard drives. Seagate also makes SSDs (solid-state drives) and has leveraged its mass-storage expertise to begin expanding into cloud computing with its Lyve Cloud product.
While this name has been in a bit of a slump through most of June (and is subject to some cyclical movement), STX stock has also been a strong growth performer. Over the past five years, that has amounted to a 270% gain. This kind of high-level return is rare among income stocks.
Finally, though, Seagate is attractive because it consistently pays a quarterly dividend, with a 3.16% current dividend yield. At the time of writing, STX stock’s Portfolio Grader rating was a “B.”
Income Stocks to Buy: Williams Companies (WMB)
The final entry on this list of income stocks to buy is WMB, the Williams Companies. Now, you might have some concerns about having WMB stock in your portfolio. After all, this Oklahoma-based company is primarily focused on natural gas production and transportation — a sector that was hammered in 2020. WMB shares lost more than half of their value in the first several months of last year.
However, despite a national campaign to transition to a zero-emission economy — and a move by some cities to ban natural gas in new homes — the end is far from near for natural gas. For example, the U.S. Energy Information Administration projects domestic natural gas consumption will decline just 0.5% in 2021 compared to 2020. Additionally, prices are on the rise. In May, spot prices for natural gas hit $2.91 per million British thermal unit (MMBtu) compared to an average of just $2.03 through 2020. Those prices are expected to continue rising through 2022.
On top of this, WMB shares have also recovered to pre-pandemic levels alongside the recovery of the natural gas market. And, even through a tough 2020, the Williams Companies continued to pay a quarterly dividend. The current dividend yield for WMB stock is 6.14%, which should attract anyone interested in building up their holdings in income stocks. WMB stock currently earns a “B” rating in my Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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