Dividend Investor Who Makes $70,000 a Year Shares His Portfolio: Top 7 Stocks

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Can you live entirely on dividends? This is probably the most frequently asked question on Reddit’s dividend discussion forums, where hundreds of people share their income investing experience and ask for advice. About nine months ago, someone asked /dividends, a Reddit community with over 570,000 members, if it was possible to make a living from dividend investing. While there were many interesting answers, one caught our eye.

One Redditor replied that he was 59 years old and had about $250,000 invested in dividend stocks after the crash caused by the COVID-19 pandemic. He said the market rebound has bolstered his portfolio and he has invested about $200,000 more. He claimed to collect about $70,000 a year in dividends. Most of the stocks in his initial portfolio were in the oil and gas industry, but he later diversified into other sectors. The Redditor was generous enough to mention the specific stocks in his portfolio. Let’s take a look at these companies.

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Sunoco LP

Sunoco LP (NYSE:SUN) is a Texas-based energy MLP company with a dividend yield of about 6.8%. Last month, the company reported strong second-quarter results that beat estimates for both earnings and revenue. In May, Sunoco completed its $7.3 billion acquisition of NuStar. In June, Citi raised its rating on SUN stock to Buy from Neutral, with a price target of $65.

ExxonMobil

With over 40 years of consecutive dividend increases and a dividend yield of 3.4%, Exxon Mobil Corp (NYSE:XOM) is one of the top dividend stocks in Redditor’s portfolio, earning $70,000 a year in income from dividends. Exxon Mobil continues to invest in fossil fuel opportunities, believing that more than 50% of global energy demand will be met by oil and gas even by 2050. However, the company is investing in carbon capture and clean energy. Exxon expects to produce 40 million tons of LNG annually by 2030, more than double current production.

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Crossamerica Partners LP

Crossamerica Partners LP (NYSE:CAPL) distributes motor fuels with a dividend yield of about 10%. The company reported second-quarter results in August, where GAAP EPS beat Wall Street estimates. However, revenue fell 1.7% year over year and missed Street forecasts by $140 million.

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Crestwood Equity Partners (now part of power transfer)

Crestwood Equity Partners was an energy infrastructure company that was acquired by Energy Transfer for about $7.1 billion last year. The Redditor said he bought this stock in 2020, and it was later merged into Energy Transfer (ET).

Altria Group

With a yield of 7.5% and more than 50 years of consecutive dividend growth, Altria Group Inc. (NYSE:MO) is one of Redditors’ most favorite income tracks. Despite concerns about the future of its smoking products amid declining smoking worldwide, Altria continues to be a reliable dividend stock. In August, it increased its dividend by 4.1%. The company’s latest quarterly results show that its smokeless and oral tobacco products have started to offset declines in smoking products.

Pfizer
Pfizer Inc. (NYSE:PFE) has a dividend yield of over 5% and has increased its payout for 15 consecutive years. With a strong pipeline and strengths in the pharmaceutical market, Pfizer is a reliable dividend stock for any portfolio. Pfizer spends between $2.5 billion and $3 billion on research and development each quarter and has more than 110 candidates in the pipeline.

The Redditor, who claims to earn about $70,000 a year in dividends, said he added Pfizer fairly late in his investment journey for additional diversification.

Johnson & Johnson

Johnson & Johnson (NYSE:JNJ) is one of the top dividend stocks with more than six decades of consistently growing payouts. Despite the headwinds related to the lawsuits, the scale and diversity of its revenue stream make Johnson & Johnson an attractive revenue play. In July, Johnson & Johnson posted strong quarterly results, beating estimates for both revenue and EPS. The MedTech and Oncology businesses posted decent year-over-year revenue growth.

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