Top 6 Stocks and ETFs

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As the election approaches and uncertainty surrounds the Federal Reserve’s plans to cut interest rates, the market’s appetite for stable and reliable dividend-paying stocks is growing. Dividend stocks have an attractive history of protecting investors from inflation. According to a report from WisdomTree, from 1975 to 2023, dividends grew by an average of 5.7% per year – more than 2% above the rate of inflation.

But generating a regular monthly income from dividend stocks is not easy. That’s why hundreds of new investors flock to dividend-focused discussion forums on Reddit, where people share their experiences, secrets, and strategies for achieving sustainable dividend income.

Check:

About five months ago, someone asked /Dividends (now a community of over 580,000 members) how much they earn in annual dividends. There were many interesting answers. One Redditor said he earns about $25,000 in dividends annually and shared his portfolio. The Redditor said his total investment was around $1 million.

“About a third of my portfolio is dividend-based,” said the Redditor.

Let’s take a look at the portfolio.

JPMorgan Equity Premium Income ETF

The JPMorgan Equity Premium Income ETF (NYSE:JEPI) is one of Reddit’s most popular dividend ETFs. The fund makes money by investing in some of the most notable large-cap US stocks and selling call options. JEPI is ideal for those seeking exposure to defensive stocks. JEPI typically underperforms during bull markets and protects investors from huge losses during bear markets because most of its portfolio is made up of large, defensive stocks such as Trane Technologies PLC (NYSE:TT) , Southern Co ( NYSE:SO ) and Progressive Corp ( NYSE:PGR ). ), among many others. Over the past year, the ETF is up about 6%.

Amplify CWP Enhanced Dividend Income ETF

Amplify CWP Enhanced Dividend Income ETF (NYSE:DIVO) generates monthly income by selling covered calls. Some of the ETF’s top holdings include Visa, UnitedHealth, JPMorgan, Caterpillar, Home Depot and Procter & Gamble. The ETF has more than $3.4 billion in assets and has gained a lot of popularity on Reddit. A Redditor backtested the fund’s returns since its inception in 2016. The results showed that a $10,000 investment in the ETF in 2016 would have grown to $19,970 versus $19,614 for SPY with dividends reinvested. Redditors believe the ETF is a good hedge investment during bear markets.

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British American Tobacco

British American Tobacco PLC (NYSE:BTI) has a dividend yield of over 9% and a strong track record of payout growth. Over the past decade, the company’s dividend has grown by approximately 5.40%. British American Tobacco PLC (NYSE:BTI) is turning to new products amid declining smoking categories. Analysts believe the company’s Velo nicotine pouches and Vuse vaporizers present promising growth opportunities to offset declines in the traditional smoking business.

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Philip Morris International

Another tobacco stock in the Redditor’s portfolio that claims to earn about $25,000 in annual dividends, Philip Morris International Inc. (NYSE:PM) has raised its dividend for 16 consecutive years. The stock yields about 4.9%. Second quarter results of Philip Morris International Inc. (NYSE:PM) released in July showed revenue and volume growth in the combustible tobacco products segment. Philip Morris is also diversifying its product portfolio with smoke-free products to prepare for the future. Its Zyn brand nicotine pouches and IQOS vape brand are growing.

EPR properties

Missouri-based entertainment REIT EPR Properties ( NYSE:EPR ) pays monthly dividends and yields about 7.2%. Raymond James recently upgraded the stock to Strong Buy from Outperform. RBC Capital upgraded the stock earlier this month to Outperform from Sector Perform. Analysts at the firm said EPR Properties (NYSE:EPR) has successfully weathered challenges such as the pandemic and the Hollywood writers’ strike and is poised to benefit from higher rents and a solid tenant base in the coming months.

BlackRock Science and Technology Trust

BlackRock Science and Technology Trust (NYSE:BST) generates monthly income by investing in science and technology companies and by selling covered call options on a portion of its portfolio’s common shares. It has a yield of over 9%. Some of the fund’s top holdings include Nvidia, Broadcom, Meta Platforms, ASML, Microsoft and Apple.

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This article The $25,000 Annual Dividend Investor Shares His Portfolio: Top 6 Stocks and ETFs originally appeared on Benzinga.com