What's not to love about passive income when it comes to investing? You buy some shares of stock and let the company do the heavy lifting while you watch the cash pile up.
A great thing about dividend stocks is that you don't have to sell them to enjoy a profit. Your biggest decision can be whether to reinvest the dividends or take the money and run.
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Well, that's your second-biggest decision. The biggest decision when it comes to investing for passive income is what stocks to buy in the first place. There are about 4,000 publicly listed companies in the United States, and the number that pay dividends changes every quarter.
But you don't have to go far to find companies with long records of delivering competitive returns and reasonable prospects for more of the same going forward. You can start, and if you choose, even end your search by considering these three: Essex Property Trust (ESS 2.31%), Consolidated Edison (ED 0.64%), and Altria Group (MO 0.12%).
Altria Group dividend data by YCharts.
Live it up with Essex Property Trust
Investors in Essex Property Trust get to reap the benefits of multifamily residential ownership without the hassles of collecting the rent and fixing the plumbing.
This real estate investment trust (REIT) is, like ConEd, a Dividend Aristocrat, a member of that club of Fortune 500 companies that have raised their dividends for at least 25 straight years. In this case, make that 29, good for a current yield of about 2.55% from a stock currently trading at about $344 a share.
While Essex doesn't have a captive audience, as does, say, a regulated utility like ConEd, it does have a profitable portfolio of about 250 high-end apartment properties in high-dollar markets up and down the West Coast, especially in and around San Francisco, areas that should continue to provide the flow of tenants with the income and desire to live there.
ConEd delivers decades of consistent income
When ConEd increased its dividend by $0.015 -- a penny and a half -- in January, that marked 48 straight years of increases for one of the nation's largest investor-owned utilities and diversified energy providers.
ConEd not only provides electricity, gas, and steam service to New York City and much of the surrounding area in southeastern New York State and northern New Jersey, it has a solar energy business that's the second-largest owner of such projects on the continent.
You can buy ConEd for about $97 a share, and for your efforts, you will get a dividend of $0.79 for each one of them and a yield of about 3.25%, padding your portfolio with a nice flow of passive income.
Altria Group total return level data by YCharts.
Reap rich dividends from Altria
Altria Group is no Dividend Aristocrat, but it's no slouch either. The maker of Marlboros has grown its dividend for 13 straight years while diversifying its income stream to lessen its dependence on tobacco products.
Altria says it targets a dividend payout ratio of about 80% of adjusted earnings per share (EPS), and it's currently guiding EPS growth of 4% to 7% when 2022 is all said and done. Altria will cost you about $54.60 a pop, but at that price, it yields a nice payout of about 6.55% from a dividend of $0.90 a share.
Altria investors are taking a stake in a business that seems pretty secure, as long as people continue to smoke, vape, dip, and drink. Along with a growing focus on smokeless products, Altria also has equity investments in Anheuser-Busch InBev SA/NV, the world's largest brewer, and cannabis company Cronos Group. That's a strategy for growing revenue that already has offset the precipitous decline of smoking in the United States and should help keep the dividends flowing for years to come .
