Everyone would like to win the lottery, and the smart winners would immediately turn around to find the best stocks to buy with lottery winnings. Unfortunately, those winners are few and far between. Approximately 70% of all lottery winners go broke within a few years. These people are often worse than when they started due to higher debt and impulsive spending habits that came from their lucky break.
Investing your lottery winnings into stocks can make them last, but if you win the lottery, you don’t need a 10x growth stock to retire peacefully. Getting the right lottery ticket can give you enough money where you don’t have to take big risks. Some of the best stocks to buy with lottery winnings are low-risk, blue-chip stocks that pay dividends instead of going for a high-risk stock.
Winning the lottery doesn’t suddenly make you more skilled with money. It also doesn’t mean you will suddenly start to win all of your bets. Taking a low-risk approach if you win the lottery can help you cruise in retirement instead of ending up like many lottery winners who become broke because of their quick fortunes.
Bank of America (BAC)
Bank of America (NYSE:BAC) is the second-largest bank by assets and is a bank the Fed labels as too big to fail. Bank of America and other large financial institutions actually performed well during the Silicon Valley Bank default as people opted for safer names.
The stock hasn’t delivered eye-popping returns for investors. Shares are down 4.5% year-to-date and are only up by 3% over the past five years. However, the company has a reliable 3% dividend yield, and the company hikes its dividend every year.
The bank recently hiked its quarterly dividend from 22 cents per share to 24 cents per share. That’s a 9.1% year-over-year cash flow increase. If you win the lottery, you don’t need to hit home runs with your other investments. Growth investors may outperform Bank of America, but its steady cash flow can help you stretch your winnings with relatively little risk.
If you want a stock that can deliver higher returns than Bank of America but still has a robust business model, you may like Broadcom (NASDAQ:AVGO). The stock is up by 62% year-to-date in part because of the artificial intelligence boom. However, shares are up by more than 300% over the past five years, indicating there’s more to this stock than artificial intelligence.
Broadcom is a top semiconductor stock that provides vital chips. These chips go into computers, smartphones, appliances, cars and other products. Broadcom enjoyed top-line and bottom-line growth in the most recent quarter. The company achieved a desirable 39.86% profit margin during that quarter.
Broadcom’s dividend yield has taken a hit due to the stock’s recent rally, but it is still 2%. The semiconductor giant has displayed an incredible commitment to raising the dividend, taking the quarterly dividend per share from $1.75 in 2018 to $4.60 this year.
Cash flow remains strong, and the company has several growth opportunities. It can help lottery winners hold onto their winnings and capitalize on a high-dividend growth stock.
Stag Industrial (STAG)
Stag Industrial (NYSE:STAG) is a real estate investment trust that buys industrial properties across the United States. The firm has 561 buildings spread across 41 states and pays a monthly dividend. The yield is a little less than 4%, and the stock has also done well.
Stag Industrial shares have notched an 18% year-to-date gain and are up by 42% over the past five years. The dividend has increased the total returns for investors, especially individuals who reinvest the proceeds.
Stag Industrial reported a 7.8% year-over-year growth in net operating income during the most recent quarter. The company also achieved record same-store sales growth following the momentum from 2022.
Stag Industrial has a diversified portfolio in a relatively low-risk industry. It gives investors the opportunity to generate stable income and capital appreciation without having to acquire and manage their own real estate properties. The monthly cash flow can also be a big draw for lottery winners or anyone who wants a reliable dividend stock.
On this date of publication, Marc Guberti held long positions in AVGO and STAG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.