With apologies to the rock band Dire Straits, you're not going to get "money for nothing." However, you can definitely get money on a regular basis by buying the right stocks. I'm referring, of course, to buying solid dividend stocks.
Many dividend stocks don't have high enough yields to generate significant income. Others have high dividend yields but come with unacceptable levels of risk. But investing $100,000 in these three dividend stocks could give you nearly $6,000 in steady annual income.
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1. AbbVie
If you take one-third of your initial $100,000 and buy shares of AbbVie (NYSE:ABBV), you should be able to count on at least $1,600 in annual income. The big drugmaker's dividend currently yields 4.8%.
The good news, though, is that amount is highly likely to increase in the future. AbbVie ranks as a Dividend Aristocrat, members of the S&P 500 that have raised their dividends for at least 25 consecutive years. With the company's recently announced dividend hike, AbbVie's streak will extend to 50 years in a row of dividend increases.
Sure, the company's top-selling drug Humira faces U.S. biosimilar competition beginning in 2023. Newer autoimmune disease drug Rinvoq also faces some uncertainty with a pending label change from the U.S. Food and Drug Administration (FDA) that could negatively impact sales.
However, AbbVie should be in a solid position to keep the dividends flowing and growing. The company remains confident that it will quickly return to growth after a trough year in 2023. Don't expect any blips at all with the drugmaker's dividends.
2. Easterly Government Properties
Easterly Government Properties (NYSE:DEA) looks like a great place to park another third of your $100,000. With its dividend yield just under 5%, that investment should generate around $1,660 in additional yearly income.
I recently wrote that Easterly is one of the least scary stocks to buy right now. My confidence lies in the company's business model. Easterly is a real estate investment trust (REIT) that focuses on leasing properties to the U.S. government.
There is without a doubt no more stable tenant than Uncle Sam. Easterly board chairman Darrell Crate was right on target when he said in the company's Q3 conference call that properties leased to the federal government are the ultimate "sleep well at night real estate."
And Easterly continues to expand. So far this year, the company has acquired 10 properties either directly or through its joint venture with an unidentified global investor. It's on track to achieve the highest annual acquisition volume this year since becoming a public company.
3. Enterprise Products Partners
AbbVie and Easterly together should be able to give you $3,320 in annual income from dividends. Investing the remaining third of your $100,000 in Enterprise Products Partners (NYSE:EPD) should add close to $2,700 in yearly dividends with its yield of 8.1%, bringing the total to nearly $6,000.
Enterprise Products Partners ranks as one of the world's leading midstream energy companies. The ongoing economic recovery serves as a strong tailwind for Enterprise with increased demand for crude oil, natural gas liquids, and petrochemicals.
These dynamics are expected to continue throughout the next year. Over the long term, renewable energy sources will rise in importance. However, the demand for fossil fuels is also likely to increase as well -- albeit at slower rates than in the past.
Enterprise has increased its dividend distribution for 23 consecutive years. The company will probably announce yet another distribution hike in January.