If you're a dividend investor and have $1,000 to invest, it can be pretty depressing right now. The reason is that the S&P 500 index has an itty-bitty yield of 1.2% today. This suggests that the market is expensive and, in turn, it could be hard to find attractive dividend stocks. Don't give up -- there are smart high-yield stocks out there. Here are two attractive options.
Brookfield Asset Management is a dividend growth gem
Brookfield Asset Management (BAM 1.30%) has an attractive 3.2% dividend yield. But a yield that's well over twice the size of the market's yield isn't actually the big attraction here. The reason to buy this Canadian asset manager is its dividend growth. The dividend was just increased 15%, and the company believes that it can keep that pace up through the end of the decade.
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Brookfield Asset Management is planning to achieve this by vastly increasing the size of the fee-earning assets it manages. The figure, which stands at around $550 billion today, is expected to hit $1.1 trillion by 2030. Every asset class in which the company competes (renewable power, infrastructure, private equity, real estate, and credit) is expected to roughly double in size. Since Brookfield charges fees for its services, a materially expanding asset base should lead to a materially expanding capacity to increase the dividend.
There are risks to consider, notably that market dynamics will play a material role in Brookfield's ability to gather assets. But much of what the company does gets classified as alternative assets, a hot niche in the asset management business that resides outside of traditional Wall Street dynamics. For investors who want an attractive yield and dividend growth, too, Brookfield Asset Management is a smart stock to dig into. You can buy around 18 shares for $1,000.
Realty Income is slow and boring, but it has a high yield
That said, not every dividend investor is looking for rapid dividend growth. Some are focused more on large dividend yields, like the 5.6% yield on offer from Realty Income (O 0.31%). The trick is to balance yield and safety, since reaching too hard for yield could easily leave you with a dividend that is at risk of getting cut. That's highly unlikely with real estate investment trust (REIT) Realty Income.
For starters, Realty Income has an investment grade rated balance sheet backing one of the most diversified portfolios of net lease properties you can buy (a net lease requires tenants to pay for most property level operating costs). Its adjusted funds from operations (FFO) payout ratio was a very reasonable 75% or so in the first quarter of 2025. In other words, there's a lot of room for adversity before the board would be considering a cut.
Another dividend increase is far more likely, since Realty Income has hiked its dividend annually for three decades. What you won't get, however, is rapid dividend growth, given that the average annualized increase over that span was around 4%. Still, a large upfront starting yield with modest ongoing growth will likely appease investors trying to maximize the income their portfolios generate. You can buy around 17 shares for $1,000.
Smart investors look beyond the headlines
The S&P 500 is trading near all-time highs, and the dividend yield is near historic lows. If you have $1,000 or $100,000 to invest in dividend stocks, you shouldn't give up and leave that capital in cash. There are good dividend stocks available if you dig a little deeper. Brookfield Asset Management is a dividend growth story with an above-market yield. Realty Income is a high-yield story with a reliable history of providing investors with slow and steady dividend growth. One of these smart income options is likely to resonate with you today.
