There really isn't a bad time to invest in dividend stocks. But there are more advantageous times to buy than others. Bear markets, for example, can be a prime investment opportunity for income stocks since yield and pricing work inversely.
Considering many top dividend stocks are quickly recovering from last year's volatility, the higher-than-average yields we've been seeing might not be around much longer.
Three dividend stocks that stand out as solid buys right now are Realty Income (O 1.46%), Life Storage (LSI), and American Tower (AMT -0.59%). Here's why April is an ideal time to invest in these top stocks.
This 29-year dividend streak is bound to keep going
Realty Income has managed to increase its dividend 120 times over its 29 years as a publicly traded company. It's a dividend streak just a handful of other companies can match, and a testament to the stock's reliability.
The net-lease real estate investment trust (REIT) owns and leases over 12,000 different single-tenant commercial properties across the United States and Europe. Net leases operate over long periods and pass most responsibilities onto the tenants leaving Realty Income (and its shareholders) with a steady income. This is why these leases are well known for their reliability, but scale is what really insulates net lease security. Realty Income has such a large and diverse portfolio of properties its portfolio isn't impacted as greatly if a tenant defaults or the property becomes vacant because it has 12,000 other properties to rely on.
The REIT is the largest net lease operator in the world and is growing rapidly. It has spent over $21 billion in the last four years on acquisitions while maintaining a solid financial foundation and healthy dividend payout ratios.
It's also one of the few stocks to pay dividends monthly. The REIT offers inventors a yield of 4.9% at the time of this writing, but as its share price recovers, its yield is likely to return to more normal levels.
This stock is up 33% and could keep rising
Life Storage saw its share price jump 33% since the start of 2023 thanks to a potential buyout opportunity from fellow self-storage REIT Public Storage. The company rejected Public Storage's unsolicited offer of an all-stock transaction, but investors are hopeful Public Storage could increase its offer price to seal the deal.
Whether the buyout pans out as investors hope or not, Life Storage is undoubtedly a fantastic dividend stock. It currently has a yield of 3.4%, and has outperformed the broader market over the last one-, three-, five-, and 10-year periods. Life Storage's payouts have increased by 50% over the last five years.
The company saw tremendous growth in 2022 and believes this performance should continue in the years to come. Healthy demand for self-storage space, its opportunity to grow revenue through its third-party storage management software and services for other self-storage facilities, and its healthy balance sheet put it in an ideal position to continue soaring.
April is the perfect time to buy shares in this top-tier stock before its share price rebounds further. Especially if Public Storage comes back with a counteroffer in the near future.
This long-term winner won't stay down for long
Leading communications and infrastructure REIT American Tower has had a tough run over the last year. Currency fluctuations, high inflation, and rising interest rates have greatly affected its earnings, and the stock has sunk by 20%.
However, the REIT -- which owns and leases communications assets like antennas, cellphone towers, and data centers across the globe -- won't be down forever. There are loads of reasons the stock should make a comeback in the near future.
To start, the company's roughly 225,000 assets play a crucial role in keeping our world connected, a need that isn't subsiding anytime soon. In fact, data demand from mobile phones is expected to increase at a compound annual rate of 21% over the next five years. The REIT also has the continued rollout of 5G technologies to boost its earnings, and its leasing activity remains healthy despite the headwinds it is facing.
American Tower has raised its dividend every year since it became a REIT in 2011, for the equivalent of a 346% increase. Given its strong financials, low dividend payout ratios, and long-term growth drivers, I believe it's a dividend stock worth owning -- especially at today's 3% yield.
