Does the stock market's latest rally have you feeling a little queasy? The benchmark Vanguard S&P 500 ETF has risen nearly 8% over the past month. After watching several similar rallies fizzle out in less than a year, though, it's understandable if you're not convinced we're at the beginning of a long bull run.
NYSEMKT: VOO
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If all the stock market's ups and downs are getting to you, consider buying these magnificent dividend stocks now and simply holding them for the long run. Both offer rapidly rising quarterly payouts that you get to keep regardless of what happens to the market as a whole.
Buying dividend-paying stocks and holding them over the long run is as effective as it is simple. From 1973 through 2022, the average dividend-paying stock in the S&P 500 index rose by 9.2% annually. Non-dividend-payers fell by 0.6% annually over the same time frame, according to Hartford Funds and Ned Davis Research.
UnitedHealth Group offers a 1.3% yield that is rising fast
Health insurance benefits management might not thrill the average investor but it should. The U.S. population isn't just getting larger, it's getting steadily older thanks to longer average lifespans.
NYSE: UNH
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A shifting demographic more reliant on healthcare services is a secular tailwind that helped UnitedHealth Group (UNH 0.78%) raise its dividend payout a stunning 489% over the past 10 years. With reinvested dividends, a $1,000 investment in 2013 would be worth $9,727 today.
Analysts who follow health insurers think UnitedHealth Group's best days are still up ahead. In fact, Morgan Stanley recently made it a top pick citing its competitive position in the Medicare Advantage space. In the first three months of 2023, UnitedHealth added 440,000 new Medicare Advantage members to its books.
While rising Medicare Advantage enrollment gives UnitedHealth more premiums to work with, directly employing more healthcare providers will reduce medical expenses. In March, UnitedHealth acquired LHC Group, a company that provides more than 12 million in-home interventions annually.
Medical Properties Trust offers a 13.8% yield right now
Medical Properties Trust (MPW +2.28%) is a real estate investment trust (REIT) that owns 444 hospitals and related buildings spread across 31 U.S. states and nine other countries.
NYSE: MPW
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REITs make great buy-and-hold stocks because they're exempt from income taxes as long as they distribute at least 90% of their profits to shareholders in the form of a dividend. Medical Properties Trust's cash flows have been historically reliable because it gets hospital operators to sign long-term net leases that transfer responsibility for all the variable costs associated with owning its buildings to its tenants.
With net leases and a hands-off approach, Medical Properties Trust can produce steadily growing profits as long as its tenants can make their rent payments. The stock has tumbled around 32% this year because the effects the COVID-19 pandemic had on hospitals are just starting to show up on this REIT's quarterly results.
Medical Properties Trust does what it can to reduce reliance on any one of the 55 different hospital operators that it receives rent payments from. Unfortunately, one of its larger tenants, Prospect Medical, hasn't been able to pay rent this year. In February, the company told investors that in a worst-case scenario in which it receives no rent this year from Prospect Medical funds from operations (FFO) would reach $1.50 per share in 2023.
Even in the worst-case scenario, Medical Properties Trust's FFO estimate is more than adequate to meet the company's annual dividend commitment currently set at $1.16 per share. There are no guarantees that it will, but the odds are good enough that buying the stock now and keeping it over the long run looks like the right move to make.
