Dividend investing doesn't always excite everyone, but it's a great way to create a nice stream of passive income that can help you get rich slowly. It's also helpful to have some nice dividend-yielding stocks during some of the market volatility we've been experiencing over the past few months. Here are two stocks that could earn you at least $1,000 in annual income if you invest $25,000.
1. New York Community Bancorp
New York Community Bancorp (NYCB -1.47%) is a large regional bank with nearly $60 billion in assets. The bank will probably get a lot bigger, as it intends to acquire the Michigan-based Flagstar Bancorp, which will propel the institution to roughly $87 billion of assets. New York Community Bancorp has been out of favor with investors for a while, with the stock down more than 23% over the last five years.
Image source: Getty Images.
But the bank appears to be getting its act together. At the start of 2021, New York Community Bancorp elevated Thomas Cangemi as its CEO, and Cangemi has been razor-focused on changing the bank's model and remixing the balance sheet. New York Community Bancorp previously focused on using higher-cost funding sources and fixed-rate loans in the multi-family space. Now, the company is changing its model to focus on lower-cost and stickier deposits and a more diversified loan mix. There's certainly execution risk, but trading at around 130% tangible book value (TBV), which is what a bank would be worth if it were liquidated, the valuation is certainly not crazy by any means.
New York Community Bancorp currently has a 5.93% dividend yield, so investing $25,000 would generate roughly $1,482 in annual income. That's great passive income to sit around and collect as the bank continues to transform its model and hopefully get the stock price heading north.
2. Northwest Bancshares
Northwest Bancshares (NWBI -1.32%) is a small $1.06 billion asset bank based in Pennsylvania that packs a pretty good punch. For the nine months ended Sept. 31, 2021, Northwest generated $11.4 million in profits. That's roughly equivalent to a 13% return on average shareholder capital and just under a 1.5% return on average assets. These are excellent results for such a small bank.
Non-performing assets such as loans that borrowers missed payments on spiked in 2020 during the pandemic but have since been trending in the right direction. Additionally, net charge-offs, debt from loans unlikely to be collected as a percentage of total loans, stayed very modest in 2020 and are now back down to practically zero. The bank trades around 150% TBV, which presents upside if Northwest can keep up the performance seen through the first nine months of 2021.
With a nearly 5.7% dividend yield, an investor can expect to make $1,425 annually if they invest $25,000. Again, this is a really solid proposition, especially if the bank keeps up these returns, which I would expect to drive up the stock's valuation over time.
