Investing $123,500 in These 3 High-Yield Dividend Stocks Could Make You $10,000 in Reliable Passive Income in 2024
Discover how investing in high-yield dividend stocks can generate substantial passive income with minimal effort.
Making money usually requires hard work and dedication, but what if there was a way to earn a significant income without breaking a sweat? Enter passive income – the concept of earning money with minimal effort. While there are various avenues to generate passive income, one of the most lucrative approaches is investing in stocks that offer attractive dividends. By allocating an initial investment of $123,500 into three high-yield dividend stocks, you could potentially earn $10,000 in reliable passive income in 2024. Let’s explore these stocks and their potential for generating substantial returns.
Ares Capital: A Steady Dividend Performer
Discover how Ares Capital’s stable dividend yield and strong track record make it an attractive investment for passive income seekers.
If you allocate one-third of your initial investment to Ares Capital (NASDAQ: ARCC), you could earn over $4,000 in passive income next year. Ares Capital, organized as a business development company (BDC), boasts a dividend yield of 9.73%. As per regulations, BDCs are required to distribute at least 90% of their taxable income to shareholders in the form of dividends. With its robust core earnings, Ares Capital is well-positioned to maintain or even increase its dividend payout in the coming year. Moreover, the company has a commendable track record of stable or increasing dividends for over 14 years. While there is a risk of potential share price decline, historical data shows that Ares Capital has delivered higher total returns than the S&P 500 over the past three-year, five-year, and since its IPO in 2004.
Enterprise Products Partners: A Reliable Income Generator
Learn how Enterprise Products Partners’ consistent distribution growth and resilient cash flow make it an excellent choice for passive income investors.
Investing another one-third of your upfront funds in Enterprise Products Partners (NYSE: EPD) could yield approximately $3,100 in passive income in 2024. As a midstream energy leader, Enterprise Products Partners offers a distribution yield of 7.55%. The company has an impressive track record of increasing its distribution for 25 consecutive years, with a compound annual growth rate of around 7%. This remarkable streak reflects the management team’s commitment to maintaining attractive distributions. Enterprise’s ability to generate steady cash flow has been evident even during challenging times such as the financial crisis and the recent oil price collapse and pandemic. As its business model revolves around pipelines and other midstream assets rather than oil and gas prices, the company is well-insulated from market volatility. While economic downturns remain a potential risk, the outlook for a solid economy in 2024, with moderating inflation and manageable unemployment levels, offers optimism for investors.
Verizon Communications: A Telecommunications Giant with Dividend Stability
Explore how Verizon Communications’ solid dividend yield and improved financial performance make it an appealing option for passive income seekers.
Investing the remaining one-third of your initial investment in Verizon Communications (NYSE: VZ) could generate an additional $2,900 in passive income next year. With a dividend yield of over 7%, Verizon is a telecommunications giant that has consistently delivered dividends. In September 2023, the company increased its dividend for the 17th consecutive year, reflecting its commitment to rewarding shareholders. Verizon’s financial performance has also improved, with $14.6 billion of free cash flow generated in the first three quarters of 2023, a $2.2 billion increase from the previous year. The company’s raised free cash flow guidance for full-year 2023 to $18 billion further solidifies its dividend stability. While competition in the wireless industry remains fierce, Verizon’s dividend appears more secure than ever. It is important to consider that alternative investment opportunities may exist, and investors should conduct thorough research before making any investment decisions.
Conclusion:
Investing in high-yield dividend stocks can be a lucrative strategy for generating passive income. By allocating $123,500 into Ares Capital, Enterprise Products Partners, and Verizon Communications, you could potentially earn $10,000 in reliable passive income in 2024. These stocks offer attractive dividend yields, stable track records, and resilient cash flows, making them appealing options for investors seeking a passive income stream. However, it is crucial to conduct thorough research and consider alternative investment opportunities before making any investment decisions. With careful planning and strategic investments, you could unlock a world of financial freedom through passive income.