When you're trying to start investing in stocks, it can be difficult to know where to begin building your portfolio. There are thousands of public companies out there that do so many different things. Some operate using complex business models that seem to require a Ph.D. to understand, while others have operations that seem simple enough for anyone to grasp. Those uncomplicated companies can often make some of the best investments because they deliver steady growth and income.
With that in mind, here are four simple companies that would be great stock picks for anyone who has $1,000 they want to invest right now.
Realty Income (O -0.18%) is a real estate investment trust (REIT) that owns free-standing commercial buildings, which it primarily leases to companies in the retail and industrial sectors. The REIT has a super-simple business model. It buys these properties and leases them back to their tenants under long-term agreements. Those leases supply it with stable rental income.
As a REIT, it is obligated to pay out most of its income via dividends. And Realty Income has increased those payments -- which it distributes monthly -- annually for more than 25 consecutive years, qualifying it as a Dividend Aristocrat. At its current share price, it yields around 4.4%, making Realty Income a simple way to generate passive income from real estate.
Brookfield Renewable Corp.
Brookfield Renewable Corp. (BEPC -1.47%) (BEP -1.74%) owns and operates renewable energy generation facilities such as hydroelectric power plants, wind farms, and solar energy projects. It sells the power these facilities produce to utilities and large corporate buyers under long-term fixed-rate contracts that provide it with steady cash flow.
The company pays out a portion of that money to investors via dividends. Brookfield Renewable has increased its payments annually for more than a decade. Meanwhile, it uses the money it retains to fund new renewable energy development projects and acquire existing ones. These investments should enable Brookfield to grow its dividend at a 5% to 9% annual rate in the coming years. With a yield of around 3.7% at the current share price, and the prospect of more payout hikes to come, Brookfield Renewable is one of the best renewable energy dividend stocks.
WM (WM 0.05%), previously known as Waste Management, enables investors to cash in on trash. The company earns steady income by providing residential, commercial, industrial, and municipal customers with waste collection, recycling, and disposal services. It also produces renewable natural gas from its landfills that help generate cleaner electricity and fuel heavy-duty vehicles, including half its fleet.
WM taps its growing cash flow to return money to investors via share repurchases and dividends. It has increased its dividend payout, which yields 1.7% at the current share price, for 19 straight years. The company also makes a habit of acquiring other collections companies to expand its operations. It's investing hundreds of millions of dollars to increase its renewable natural gas production and recycling capabilities to grow its revenue while helping create a more sustainable world.
Verizon (VZ -0.50%) is a leading provider of technology and communication services, providing voice, data, and video services to tens of millions of consumers and businesses. It generates recurring revenue by providing them with wireless services, internet access, and live TV programming.
Verizon hauled in $133.6 billion of revenue last year and paid out $10.4 billion in dividends. It has increased its dividend, which at the current share price yields 5.3%, in each of the last 15 years. It also reinvests a substantial portion of its cash flow into expanding its operations, including making acquisitions (it purchased TracFone Wireless last year) and is investing to roll out its faster 5G ultra-broadband network to more customers.
Simple stocks can make great long-term investments
Investing doesn't have to be complex. Companies with straightforward business models like Brookfield Renewable, Realty Income, WM, and Verizon can be great long-term investments. All four of these companies have long histories of growing their earnings and dividends. And after their share prices fell along with the broader stock market in recent weeks, they're even better bargains for investors to buy right now. Those with $1,000 to invest could split that money evenly across all four and earn steadily rising income streams and potentially attractive stock price gains in the years to come.