Want over $5,000 in annual dividends? Invest $23,000 in each of these 3 stocks

Whether you want to retire earlier, work less, or just have extra money to fund a vacation, dividend stocks can provide the cash flow to help you achieve your goals. The key is to find high yielding stocks that aren’t too risky to ensure you don’t set yourself up for disappointment later.

There are three stocks that can be great dividend-paying investments to build your portfolio Pfizer (PFE 0.85%), ECB (B.C -0.38%)and western union (WU 1.03%). They all pay you more than four times what would you get with the average S&P 500 yield of 1.3%. Here’s how investing $23,000 in each of these stocks can net you over $5,000 in annual dividend income.

1. Pfizer

One of the best dividend stocks you can get right now is Pfizer. The healthcare giant is yielding about 5.9%, which is unusually high for the stock, and that’s partly due to its distressed price. Down 13% over the past five years, investors have grown concerned about the company’s long-term prospects now that it’s not getting a boost from COVID-19-related revenue and with multiple patent expirations looming.

However, Pfizer has invested in strengthening its growth prospects with many acquisitions in recent years. One interesting opportunity could be cutting off a slice of the lucrative anti-obesity market, which could exceed $100 billion by the end of the decade. Pfizer doesn’t yet have an approved treatment, but it does have a once-daily pill that has generated encouraging results so far. There could still be a lot of growth on the horizon for the business in the future. With more than 110 programs in development, investors shouldn’t be too bearish on the stock as there is still plenty of potential for Pfizer.

The company has had some disappointing quarters recently due to asset impairment charges, but Pfizer still has a bright future, and the payoff could be significant for investors who are willing to remain patient with the healthcare stock. If we invest $23,000 in Pfizer today, you’ll get about $1,360 in dividends over a full year.

2. BC

Another good and reliable dividend stock is ECB. The Canadian telco is an industry leader, and what’s attractive about its operations is consistency. The company has steadily increased revenue from C$22.9 billion ($16.9 billion) in 2020 to $24.7 billion in 2023.

As long as you don’t expect rapid growth and invest primarily in stocks for stability and dividend income, you probably won’t be disappointed with this investment. ECB averages an incredibly low beta of around 0.50, meaning it doesn’t move much with market fluctuations, making it an attractive option for risk-averse investors.

Telecom stocks haven’t been exciting buys in a high interest rate environment, but as rates fall, that could change. Meanwhile, buying ECB shares for its consistent 8.5% dividend yield could bring in plenty of recurring income. A $23,000 investment in the company would yield more than about $1,950 in dividends for a full year.

3. Western Union

Investors can also buy other great dividend stocks in Western Union. Although consumers have an increasing number of payment options to choose from these days, Western Union remains a trusted international brand. One area where it does particularly well is in digital transactions. In the most recent quarter, which ended June 30, consumer money transfer transactions rose 4% year-on-year. However, in branded digital transactions, the growth rate was even higher at 13%.

The company expects to generate solid operating margins of around 20% this year, with its earnings per share expected to be at least $1.62, which is more than enough to cover its annual dividend payout of 0, $94 per share. That’s a big sign of resilience for the business, as Western Union’s revenue has fallen this year due to weakness in some international markets.

Given the modest share price of less than $12, buying the stock today means you could earn an 8% return. This would generate annual dividend income of $1,840 from a $23,000 investment. When combined with the other investments on this list, this would bring the total annual dividend income to about $5,150, based on a total of $69,000 invested. And with each stock focused on a different sector, you’ll also get great diversification with these investments.