The closer you get to retirement, the more you'll focus on exactly how much money you can count on coming in on a regular basis. For most people, Social Security won't be nearly enough to maintain their standard of living.
Buying solid dividend stocks is a great way to supplement how much you make in retirement. And some of these stocks give more bang for the buck than others. If you want $7,000 in annual income, invest $100,000 in these three stocks.
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1. Devon Energy
If you bought $33,333 worth of Devon Energy (DVN 0.98%) shares (one-third of your initial $100,000), the company's dividend would give you around $2,667 in annual income. There are two components of Devon's dividend -- a fixed part and a variable part. Although the fixed portion is relatively small, the oil and gas producer uses up to 50% of excess free cash flow to fund the variable portion. Combined, this gives Devon a dividend yield of roughly 8%.
Should you be anxious about the variable dividend being slashed? Nope. Devon expects that it will increase its dividend in the ballpark of 80% in 2022. The company's high prioritization of its dividend program isn't new: Devon has paid a dividend for 29 consecutive years.
The dividend isn't the only way that Devon rewards shareholders. The company's board of directors authorized a $1 billion stock buyback program that extends through the end of this year. As Devon repurchases these shares, the value of existing shares should rise.
Devon's business obviously is booming for the company to pay such juicy dividends plus buy back shares. Its well productivity continues to increase while its development costs per foot decrease. At the same time, oil prices remain strong and demand is rebounding. This all combines to make Devon a great dividend stock to buy right now for income investors.
2. Enterprise Products Partners
Another third of your initial $100,000 invested in Enterprise Products Partners (EPD -0.41%) would provide an additional $2,607 per year in dividend income. The midstream energy company's dividend yield stands at 7.82%.
Sometimes such a high yield can be a yellow flag for investors. But Enterprise's dividend program appears to be in a strong position with a free cash flow payout ratio of 84%. The company's track record is also impressive with 23 consecutive years of distribution increases.
Enterprise's prospects over the next several years look bright. The company expects to close on its acquisition of Navitas Midstream Partners later this quarter. This deal will give Enterprise an additional 1,750 miles of pipeline and more than 1 billion cubic feet per day of cryogenic natural gas processing capacity. Enterprise also has capital projects worth around $2.2 billion under construction.
Don't fret about the company's long-term future, either. Oil and gas will continue to be needed along with renewable energy sources to meet the growing demand for energy worldwide. Enterprise Products Partners co-CEO Jim Teague said in the fourth-quarter conference call last week, "We're going to remain focused on supplying the world with the clean, low-cost, and reliable fuels it needs today, while also playing a role and important part in developing lower-carbon alternatives."
3. Medical Properties Trust
Not every great dividend stock is in the oil and gas industry. Medical Properties Trust (MPW -0.22%) is a healthcare-focused real estate investment trust (REIT). The company currently owns around 440 properties, primarily acute care hospitals, in the U.S. and four other countries.
Buying $33,333 worth of MPT stock would give you another $1,640 in yearly income. That brings the total income generated by these three stocks to around $6,914. Anticipated dividend hikes from the three companies should easily boost the amount to more than $7,000.
Medical Properties Trust has increased its dividend for eight consecutive years. It should be in a great position to keep that streak going. The REIT's earnings nearly doubled year over year in the fourth quarter of 2021. MPT expects slower yet still solid growth this year.
Skyrocketing inflation shouldn't hurt the company very much. Most of MPT's leases have consumer price index escalators built in that ensure leases increase as inflation moves higher. Overall, Medical Properties Trust should be in a great position to keep its dividends flowing and growing.
