Who likes getting paid to do nothing? If you're like most who enthusiastically raised their hand, there are some high-yielding dividend stocks you may want to consider.
Shares of Medical Properties Trust (MPW -8.16%), Annaly Capital Management (NLY 0.89%), and Enterprise Products Partners (EPD 1.69%) offer yields that are way above average. They also have a good chance of raising or at least maintaining their payouts for the long run.
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1. Medical Properties Trust
Medical Properties Trust is a real estate investment trust (REIT) that owns heaps of hospitals in the U.S. and nine other countries across four continents. With 447 facilities, this REIT knows an awful lot about owning hospital-related real estate.
One of the most important lessons this REIT has learned over the years is to insist on long-term net leases that pass all the variable costs of hospital ownership on to the renters that operate the facilities.
Staying insulated from the ins and outs of hospital ownership has allowed Medical Properties Trust to meet and raise its payment for 10 consecutive years. The REIT currently offers an 8.1% yield, and its proven ability to steadily raise its payout is impressive. The company has raised its payout every year since 2013.
Income-seeking investors will be glad to know there's a good chance that Medical Properties Trust's dividend will keep climbing. In the second quarter, normalized funds from operations (FFO) reached $0.46 per share. That's a 7% gain over the past year and more than enough to cover a dividend payment currently set at $0.29 per share.
2. Enterprise Products Partners
If you're looking for reliable dividend income, it's hard to do better than Enterprise Products Partners. Shares of this midstream oil and gas distributor offer a 7.3% yield, and investors can reasonably expect more down the road. The company has raised its payout for 23 consecutive years.
If you filled up a gas tank more than a few times this year, you know how unpredictable fossil fuel prices can get. This company is able to produce reliable cash flows because its customers pay by volume, and the volume of fuel flowing through each of its pipelines is relatively constant.
Enterprise Products Partners and its peers aren't too concerned about a greener future. If governments around the globe follow their stated policies, there will be plenty of demand to keep this stock's dividends flowing. The International Energy Agency expects global demand for oil and gas to rise 18% by 2040.
3. Annaly Capital Management
Annaly is a special kind of REIT that invests in securities backed by pools of mortgages instead of physical real estate. The agency-backed securities it buys have cash flows guaranteed by the U.S. government, so its inflows are super-predictable.
Mortgage REIT accounting can get complicated, but their overall operations are fairly straightforward. Annaly borrows at relatively low short-term rates and invests this capital into high-yielding mortgage-backed securities (MBS).
Annaly offers an incredible 13.5% yield right now because rising interest rates are a serious obstacle it might not be able to overcome. Mortgage REITs make a living in the gap between their financing costs and returns from their MBS portfolio. When the Federal Reserve makes big adjustments to its target rate, that gap gets smaller overnight.
The gap between the rates Annaly's MBS portfolio provides and the short-term rates it can borrow at may be narrow at the moment, but it's just a matter of time before the company replenishes its MBS portfolio with new, higher-yielding securities. Although the rest of 2022 could be nerve-wracking, history suggests that Annaly's best years are probably ahead.
