The S&P 500 has plunged 19% so far this year. This has increased the index's dividend yield up to 1.7%. This is still well below the 4.3% historical average yield of the index.
But there are plenty of stocks that pay safe and growing, market-beating dividends to shareholders. And these two dividend stocks also offer the cherry on top -- high growth potential -- which can help investors build significant wealth and passive income over the long haul.
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1. BlackRock
With over $9 trillion in assets under management (AUM), BlackRock (BLK +0.00%) is the largest asset manager in the world by a convincing margin. Given the S&P 500 index's struggles, this hasn't been the best industry to be in over the last six months. Worries of a recession have pushed BlackRock's AUM down in recent months, which will lead to decreased net revenue since the company's investment advisory fees are tied to its AUM.
NYSE: BLK
Key Data Points
This is precisely why analysts are expecting BlackRock's non-GAAP (adjusted) diluted earnings per share (EPS) to decline 8.4% in 2022 to $35.87. But as economic growth eventually returns, the company will revert back to strong earnings growth in the years ahead. Even with a rough 2022 in store, analysts are forecasting 6.5% annual earnings growth for BlackRock over the 2021 earnings per share base of $39.18.
The stock closely trades to however the financial markets are doing since that largely dictates its financial performance. This has led BlackRock's stock 36% lower so far this year and has lifted the dividend yield up to 3.4%. And with the company's dividend payout ratio set to top out at 54.4% in 2022, dividend growth should be in the high-single-digits each year moving forward.
BlackRock's trailing-12-month price-to-sales ratio of 4.6 is moderately lower than the 10-year median of 5.2. Because its fundamentals appear to be intact, this makes BlackRock a dirt cheap asset manager to buy and hold for the next decade.
2. Crown Castle International
Modern-day smartphones like Apple's iPhone have risen to significant prominence over the last decade. In fact, the smartphone ownership rate in the U.S. has soared from 35% in 2011 to 85% in 2021.
Increasing prevalence of smartphone ownership around this period resulted in the number of cell towers in the U.S. nearly tripling from 150,000 in 2010 to 417,000 by 2020. As the biggest pure-play U.S. cell tower real estate investment trust (REIT), Crown Castle International (CCI +2.12%) has benefited immensely from this trend. The company's adjusted funds from operations (AFFO) per share almost tripled from $2.58 in 2011 to $6.95 in 2021.
NYSE: CCI
Key Data Points
And the future should be nearly as bright for the company with monthly smartphone data usage expected to compound at 21% annually over the next six years to 53.7 gigabytes in 2027. This should lead to more demand for cell towers in the years ahead. And it's why I'm confident that Crown Castle will deliver on its 7% to 8% annual dividend growth target over the medium term. Paired with the stock's 3.4% dividend yield, this makes Crown Castle an attractive pick for income investors.
And at a forward price-to-AFFO-per-share ratio of 23.2, Crown Castle is a quality growth stock at a relatively cheap valuation.
