4 of my best dividend stocks with yields over 4%

I think there are some great opportunities for me as an investor in dividend stocks right now. Here are four that I own and plan to buy more of.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Young Caucasian woman holding up four fingers

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Share prices have been falling this year, which means that dividend yields have been going up. As a result, I have a number of dividend stocks in my portfolio that are offering yields above 4%.

If I had money to invest right now, I’d be happy buying any of these stocks at today’s prices. I think they represent great value and could provide solid returns over time.

Kraft Heinz

My first stock is Kraft Heinz. It’s one of Warren Buffett’s biggest investments and I think that it’s one of the most misunderstood.

It’s easy to write off this stock. Shares in Kraft Heinz are down more than 50% over the past five years and the company’s revenue growth has been almost non-existent over the past decade.

In my view, the underlying business has been making significant improvements recently. The company’s long-term debt has reduced by 25%.

As I see it, the market hasn’t yet picked up on this one. That’s why I’ve been buying the shares for my portfolio and anticipate continuing to do so.

Citigroup

Another Buffett stock in my portfolio is Citigroup. The stock has fallen by over 27% since the start of the year.

As a result, the shares currently have a 4.5% dividend yield. And the shareholder returns don’t stop there.

Over the last five years, the company has been repurchasing 6% of its shares per year. That’s a welcome boost for me as an investor.

A prolonged economic downturn might prove challenging for Citigroup. But I think it’s priced to reflect this, so I expect to reinvest the dividend that I’ll receive this month.

Aviva 8 ⅜ PF 8 ⅜ CUM IRRD PRF #1

I’m also attracted to Aviva 8 ⅜ PF 8 ⅜ CUM IRRD PRF #1. The complicated-sounding security is preferred stock in Aviva.

It pays a fixed dividend, which makes it a bit more predictable than the common stock. At today’s prices it offers a return of 7.5%. 

The risk with the preferred stock is that it isn’t traded as much as other common shares. If I change my mind about owning it, I might find it difficult to sell.

But I don’t buy shares to sell them again quickly. My plan with Aviva’s this is to just sit back and collect dividends.

Realty Income

Realty Income is a comparatively simple stock to understand. The company owns retail properties and rents them out to tenants.

As a Real Estate Investment Trust (REIT), it distributes 90% of its rental income to its shareholders via dividends. At the moment, it has a yield of 4.78%.

It’s down around 12.5% this year due to rising interest rates. While I don’t think investors are missing anything obvious with this one, I’d buy it at today’s prices.

Rising interest rates are a headwind for Realty Income on two fronts. They make the cost of debt more expensive and drive down the value of property prices.

None of this worries me, though. Realty Income has increased its dividend quarterly for the past 25 years, which tells me the company has seen rising interest rates before and come through ok.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Stephen Wright has positions in AVIVA 8 3/8% PF 8 3/8% CUM IRRD PRF #1, Citigroup, Realty Income, and The Kraft Heinz Company. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

View of Tower Bridge in Autumn
Investing Articles

The FTSE 100 is closing in on 8,000 points! Here’s what I’m buying before it’s too late!

As the FTSE 100 keeps gaining momentum, this Fool is on the lookout for bargains. Here's one stock he'd willingly…

Read more »

Investing Articles

3 ideas to help investors aim for a million-pound Stocks & Shares ISA

The UK has a growing number of Stocks and Shares ISA millionaires, and this plan may be one of the…

Read more »

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »