Dividend stock is where smart investors go because of how well they perform when compared to their non-dividend compatriots. Clever Leverage mentions that passive income produces cash flow that works without any additional effort on your part. Dividend stocks are passive income generators, and they make up a significant portion of any serious investor’s portfolio.
The risk of investing in dividend stock is around the same as non-dividend shares, but the potential return, when compared across both options, is massive. Nerd Wallet notes that investors intending to generate passive income are the best candidates for investing in a dividend stock. For a steady stream of revenue, the stocks you invest in should perform consistently to ensure that you keep getting paid. These three dividend stocks offer great promise for investors to shore up their passive income.
1. Foot Locker (NYSE: FL)
Recently, FL’s stock took a massive nosedive, settling at a 52-week low, making investors shudder. However, this low point offers an excellent entry position for investors that want to capitalize on the potentially explosive growth of the company in the coming year. Nasdaq mentions that investors may be undervaluing FL now, and suggests it may be among the most substantial value stocks currently on the market.
The growth of FL’s stock is due to several factors. The growth comparison between Fl and its nearest competitors suggest that it can provide stiff competition to the likes of Nike and Adidas. Expanding markets combined with a lower brick-and-mortar store count also add to the potential growth options for FL. As it stands right now, FL is at the perfect point for early adopters to ride the wave of success over the next few years.
2. Verizon (NYSE: VZ)
Over the last five years, Verizon has been making waves in international markets with their acquisition of tech giants Yahoo and AOL, as well as buying out the 45% of Verizon Wireless it didn’t own from Vodafone. However, Verizon is slated to see even more growth over the coming years, thanks to its investment into 5G technology. Technology is already expanding to accommodate this new technology with manufacturers building phones that take full advantage of the higher communication speeds on mobile networks.
As a provider of telecommunication services, Verizon is well poised to profit from the expansion of 5G services, offering connections not just to mobile phones, but to any smart device that a consumer may want to keep connected. Integration of IoT devices expands the scope of connected devices and ensures Verizon’s growth over the coming years. At this point, even though Verizon has already been growing, its long-term earnings are particularly attractive to dividend investors.
3. Coca-Cola (NYSE: KO)
Coca-Cola is a household name, and as much a staple of soft drinks as a company can be. Business Insider reports that, as of 2012, there are only two countries in the world that Coca-Cola doesn’t do business in – Cuba and North Korea. A market as massive as that already shows off promise for investors wanting to get constant revenue from their dividend stock, but Coca-Cola is set to explode over the next year thanks to an exciting addition to their line-up: Energy Drinks.
CNBC reported recently that Coca-Cola got the green light to market their own brand of energy drinks, after arbitration with Monster who claimed that the soda giant’s energy drink was in contravention of their agreement. What this suggests is that Coca-Cola is likely to start selling their proprietary brand everywhere they already distribute products to, meaning that the earnings for the company (and by extension, the investors) are likely to soar.
Getting In While it’s Hot
The cost of the dividend-paying shares of these companies is well worth the risk to acquire since their potential for growth in the short and long term is so good. As earnings go up for each of these businesses, investors will see massive gains from their dividend shares. However, because of the interest, these stocks have generated on the market, getting hold of them may be difficult, especially since the shareholders wouldn’t be willing to part with them after such a good outlook for the future. Seeking them out is well worth the research time, simply because of the returns they are likely to generate for the investor.