The easiest way to make money in the stock market isn’t by frantically searching for the next meme stock. Instead, a simple buy-and-hold approach can lead to the safest, most consistent gains you can make from the stock market. Stocks that pay dividends are typically safer than most and can also provide you with recurring cash flow as you hold on to them.
Three great dividend stocks that have been beaten up this year, falling more than 10%, include: Medical Properties Trust ( MPW 0.98% ), Home Depot ( HD -0.92% ), and Cisco Systems ( CSCO -0.14% ). All are worth considering for your portfolio.
1. Medical Properties
A real estate investment trust (REIT) can be an excellent option for income investors to consider. Since it needs to pay out 90% of its profits to investors, all you really need is to ensure that the business fundamentals are strong and that it can continue making payments.
The REIT’s focus on healthcare makes it a bit of a safer investment than most as its tenants are mainly hospitals, accounting for 72.5% of its portfolio. Behavioral health facilities make up another 11.5% while inpatient rehab hospitals represent 9.2% of the company’s total properties.
Medical Properties currently pays a quarterly dividend of $0.29 which yields 5.7% annually — that’s well above the S&P 500 average of 1.3%. To assess the safety of that payout, investors should focus on the company’s funds from operations (FFO), which is a metric REITs rely on instead of net income to assess their performance. FFO in Medical Properties’ most recent quarter, for the period ended Dec. 31, was $0.43, which leaves plenty of room to cover the dividend.
For buy-and-hold investors, Medical Properties can make for a safe income stock to hold. Despite a 15% drop in its shares this year (the S&P 500 has fallen by more than 9%), now can be an optimal time to add this high-yielding investment to your portfolio as the recent stock performance does not reflect the strength of the overall business.
2. Home Depot
Home Depot’s stock doesn’t pay nearly as high a yield as Medical Properties, but at 2.4%, it’s still an above-average payout. The home improvement retailer can make for a great stock to own amid the hot U.S. housing market. For example, according to a survey from insurance company Hippo, 77% of new homeowners will need to address an unexpected repair within their first year of ownership.
And Home Depot has been a popular spot for …….