"Scary good." That's Elon Musk's description of OpenAI's new prototype ChatGPT chatbot in a tweet over the weekend. He added, "We are not far from dangerously strong AI."
Whether or not you agree with Musk's fear about the threat presented by artificial intelligence, he's on the mark with his view about how good ChatGPT is. I've had multiple lengthy conversations with the new chatbot over the past few days. The discussions ranged from economic theory to how to address major global problems to what Ben Franklin would think about the modern world if he time-traveled to the present. I was impressed by ChatGPT's responses.
Because I write about investing, I couldn't help but bring the topic up with my AI pal. I thought I'd share some insights gathered from one of our conversations. Here are the three best high-yield dividend stocks to buy in December, according to OpenAI's amazing new chatbot.
1. Energy Transfer LP
ChatGPT's first recommendation was Energy Transfer LP (ET 1.56%). I should note, though, that the chatbot said that its list of recommendations wasn't sorted in any way (although they're in alphabetical order).
NYSE: ET
Key Data Points
Energy Transfer LP ranks as one of the largest midstream energy companies in the world. The company exports nearly 20% of global natural gas liquids -- more than any other company (or any country, for that matter).
Why did ChatGPT like this stock? For one thing, it has a high-distribution yield that currently tops 8.5%. Energy Transfer has a solid history of paying distributions. The company is strong financially with a diversified portfolio of assets including pipelines, storage facilities, and terminals. The AI system also felt that Energy Transfer has a good management team with a track record of success.
2. Realty Income Corp.
Realty Income Corp. (O 0.12%) was the second high-yield dividend stock on ChatGPT's list. It's one of the five largest real estate investment trusts (REITs) in the U.S. Realty Income's tenants include dollar stores, convenience stores, grocery stores, restaurants, and more.
NYSE: O
Key Data Points
ChatGPT quickly pointed out that Realty Income has a high-dividend yield and a strong history of dividend growth. It's right on both points. The REIT's dividend yield currently stands above 4.7%. Realty Income is also a Dividend Aristocrat with 27 consecutive years of dividend increases.
Realty Income's dividend program wasn't the only plus for the stock in ChatGPT's view, though. The chatbot also liked the company's historical financial strength and diversified portfolio of properties.
3. Shell plc
Technically, ChatGPT recommended Royal Dutch Shell as its third pick. But the AI system's training data only went through in late 2021. Royal Dutch Shell changed its name to Shell plc (SHEL 0.68%) in January 2022. The rationale for choosing this stock is still applicable, though.
NYSE: SHEL
Key Data Points
Obviously, the chatbot thought highly of Shell's dividend. The company's dividend yield is nearly 3.5% today but was probably a little higher than that in ChatGPT's training data. The AI system also viewed Shell's strong financial position as a positive.
In addition, ChatGPT felt that Shell's global operations could "provide some diversification and resilience during uncertain economic times." The company does business in more than 70 countries worldwide.
Intelligent picks?
So how intelligent were the picks from OpenAI's new AI system? Overall, I think they were good.
Energy Transfer is arguably one of the best ultra-high-yield dividend stocks on the market right now. My colleague Matt Frankel wrote last month that if he could buy only one stock, it would be Realty Income. Shell has certainly been a huge winner this year and could go higher if global oil and gas supply is limited by the EU's introduction of a cap on Russian oil.
But ChatGPT wasn't perfect. For example, it noted Shell's "history of consistent dividend growth." The company's actual history of dividend growth isn't anything to crow about. Also, I suspect that the recommendations might have been different if the chatbot had access to current data.
I wouldn't rely on ChatGPT for investment advice. It wouldn't advise doing so either. The AI system emphasized that it's "important to thoroughly research and carefully evaluate any potential stock purchases." That's intelligent counsel for all investors.
