Wouldn't it be nice to invest in stocks and then simply sit back while the money flows in? You can do just that with dividend stocks.
Sure, some companies pay only puny dividends. Others are on such shaky ground that their dividends are in jeopardy. But there are stocks on the market that pay dividends that are both juicy and solid. If you've got $5,000 to invest, here are three high-yield dividend stocks that are flat-out money machines.
Richard Nixon was beginning his second term when AbbVie's (ABBV 2.65%) streak of annual dividend hikes began. Very few companies can boast that they've increased their dividend for 47 years in a row. But AbbVie can. And since being spun off from Abbott Labs in 2013, AbbVie has raised its dividend by a whopping 195%. Today, AbbVie's dividend yields 4.8%.
The big drugmaker should be in great shape to keep those dividends coming. AbbVie recently picked up a big legal victory that should allow it hold onto its U.S. market share for top-selling drug Humira for a few more years. That should give the company's other products and pipeline candidates time to gain significant momentum.
Look for the most impressive sales growth to come from new immunology drugs Rinvoq and Skyrizi. Both drugs ranked among market researcher EvaluatePharma's top five new drug launches of 2019. AbbVie's blood cancer drugs Imbruvica and Venclexta will also be key drivers for the company's growth.
The company's acquisition of Allergan should also help ensure the continued stability of AbbVie's dividend. AbbVie picked up several great products with the deal, notably including the blockbuster Botox franchise and antipsychotic drug Vraylar.
2. Brookfield Infrastructure Partners
Brookfield Infrastructure Partners (BIP 1.39%) hasn't been around long enough to rival AbbVie when it comes to consecutive years of dividend increases. The company was founded in 2007. Since then, though, Brookfield's dividend has soared more than 720%. The dividend yield now stands at 4.7%.
As its name indicates, Brookfield Infrastructure Partners focuses on infrastructure assets. The company's assets include cell towers, data centers, electricity transmission lines, natural gas pipelines and storage facilities, railroads, ports, toll roads.
The main thing you'll want to know about Brookfield Infrastructure is that its dividends are arguably as stable as they come. Roughly 95% of the company's cash flows are regulated or contracted, largely insulating Brookfield from macroeconomic turbulence. Its infrastructure assets are also remarkably diversified across sectors and geographical regions.
But Brookfield Infrastructure isn't a boring no-growth kind of dividend stock. The company continually evaluates its assets, selling off the lower-performing ones to invest in infrastructure operations with higher growth potential. This strategy should enable Brookfield to deliver solid growth in addition to its attractive dividend payouts.
3. Innovative Industrial Partners
The newest company on our list didn't begin operations until 2016. However, Innovative Industrial Partners (IIPR 6.90%) has made income-seeking investors happy campers by boosting its dividend by more than 600% in only three years (it paid the first dividend in 2017). IIP's dividend currently yields 4.6%.
IIP achieved its success by addressing an unmet need. U.S. medical cannabis operators have limited availability to capital funding. IIP buys their facilities then leases the properties back to them. This gives the medical cannabis operators much-needed cash to fund operations and expand. And it gives IIP a steady source of revenue.
The company is organized as a real estate investment trust (REIT). This means that it must distribute at least 90% of its pre-tax income to shareholders as dividends. IIP's income has grown tremendously as it has added new properties, soaring nearly 250% year over year in its most recent quarter.
IIP now owns 58 medical cannabis properties in 15 states. That's an increase of 12 properties since the beginning of 2020. At this rate of expansion, the company could easily double its earnings -- and its dividend -- within the next couple of years.