It’s not surprising that my portfolio is primarily comprised of dividend-paying stocks as I am an income investor. I firmly believe that dividend stocks’ rising influence and capacity to generate stable streams of long-term passive income simply cannot be matched.

While there are many excellent dividend stocks available for buyers, here’s why National Retail Properties is now my top pick.

Not just another net-lease REIT

The net-lease REIT leases and owns single-tenant retail buildings in a variety of sectors, including, but not limited to, dining establishments, convenience stores, auto repair shops, and entertainment venues. Currently, its portfolio consists of little over 3,300 buildings that are leased to about 370 tenants throughout 48 states.

Net-lease REITs are reputed to be reliable dividend payers. Companies like Federal Realty Trust and Realty Income both boast dividend growth for the last 25 years or more. This is mostly a result of the net-lease industry’s dependability. However, the acquisition approach of National Retail Properties sets it apart from the competition.

Investment-grade tenants are not directly leased by National Retail Buildings from its properties. Instead, it purchases retail real estate in active real estate markets that is leased to smaller, local businesses. Due to decreased competition, the corporation may purchase goods at more favorable prices.

Acquisitions of investment-grade tenants are made possible by the net leases’ lengthy tenure and National Retail’s meticulous selection of real estate investments. 7-11, Camping World and Mister Car Wash are the top three tenants of the REIT, and together they provide around 13.5% of its yearly revenue. The majority of these businesses, however, have not been directly dealt with by the REIT.

Although it is susceptible to recessionary risks, its susceptibility is lessened by the diversity of its portfolio across the nation and in a broad range of industries. National Retail collected 99.6% of the rent that was due in Q1 of 2022, and its portfolio was 99.1% occupied as of Q2 2022.

Conservative balance sheet

The balance sheet of National Retail is strong, especially when compared to its two closest net-lease competitors, STORE Capital and Realty Income. Its dividend payment ratio is 67% as compared to adjusted funds from operations, a crucial indicator of REIT profitability. This suggests that the business has enough cash to keep paying its dividend and maybe even increase it in the foreseeable future.

Its debt-to-EBITDA ratio of 5.5 is among the best among its nearest competitors and one of the lowest in the net-lease REIT sector. It has a credit grade of BBB/Baa1, and it has $30 million in liquid assets to fulfill the debt maturities due in 2023. Additionally, it is the greatest value purchase among its net-lease competitors due to its price, which is 15.5 times AFFO.

It is simple to pay dividends, but it is far more difficult to preserve and increase them without sacrificing shareholder value. Therefore, it truly speaks something about a company’s quality of business when it can regularly grow dividends over many years.

National Retail Properties is the equivalence of a Dividend Aristocrat due to its 33-year streak of dividend increases. It increased its payout by 72% during the previous 20 years, giving it a 5% dividend yield today—more than double the S&P 500’s.

Additionally, it has delivered a roughly 11% annualized total return over the previous 25 years, outperforming the S&P 500. National Retail Properties is an obvious long-term winner for dividend investors and a fantastic bargain buy right now given its superb dividend track record, capacity to grow its portfolio, and recent stable performance.

If you want to accumulate money over the long run, don’t limit your search to growth companies. The importance of dividend stocks in your portfolio can’t be understated. This is true with Hormel Foods (HRL 0.20%) and Realty Income (O -1.39%), both of which may be worth purchasing.

Historically Cheap 

The dividend yield for food manufacturer Hormel is now about 2.3%, which is towards the top of the historical yield range for the business. That implies that the stock is now rather inexpensive and may be worthwhile for long-term income investors to purchase. That’s true even if the yield of 2.3% isn’t exactly mind-blowing in terms of absolute value. The main factor is dividend growth.

Due to its portfolio of well-known food brands, Hormel has been able to raise its dividend at an average annualized rate of nearly 13% over the previous ten years. Over that time, the quarterly dividend’s value has grown by almost 240%. That is a significant increase in dividends. The intriguing part is this, though: Stocks often move in a range of yields. Therefore, the yield has remained mostly stable throughout time even if it is historically high now. The stock rises in tandem with the dividend, which is how it happens. In the last ten years, the stock price has increased by around 220%. For comparison, the S&P 500 Index has increased by nearly 180% during the same time period.

It’s also important to note that Hormel is a very elite Dividend King, having had yearly dividend increases for more than 50 years. Therefore, the decade-long trend of dividend increases is not unusual; rather, it is the rule. Hormel is a brand to take into consideration right now if you want to make your retirement more comfortable.

The value of reinvesting dividends

Above, the S&P 500 comparison was made only on price change. When you reinvest dividends, true magic may happen; a prime example is the sizable real estate investment trust Realty Income. The S&P 500 has increased 345% over the last 20 years, while Realty Income shares have gained about 310%. But Realty Income has a prodigious track record of delivering dividends (it is a Dividend Aristocrat).

If all of the dividends had been reinvested, Realty Income’s total return—which includes reinvested dividends—would have been a staggering 1,100%, as opposed to the S&P 500 index’s about 550%. That demonstrates the dividend reinvestment strategy’s strength. And all of a sudden, despite the fact that the average historical dividend increase in this REIT has been a very small 4% or so, this REIT and its around 4.4% yield start to appear much more appealing.

Realty Income is also one of the biggest net lease REITs, which means that even while it owns buildings, most of the running expenses at the property level are covered by its tenants. In fact, this REIT has the capacity and scope to take on transactions that its competitors couldn’t even consider, with over 11,000 properties, a $40 billion market valuation, and an investment-grade rated balance sheet. Since there is no reason to believe it will relinquish its position as the industry leader, the future is certain to become larger and better. For long-term investors, this market leader is well worth the admittance fee.

Do not disregard dividends.

Hormel demonstrates how quick a stock price increase may result from quick dividend growth. Realty Income exemplifies the potential of dividend reinvestment and modest, consistent dividend growth. Don’t disregard dividends in favor of growth equities if you want to have a wealthy retirement. And if you take the time to do some research, both Hormel and Realty Income may fit into your portfolio right now.

Some reliable stocks now appear absurdly undervalued as a result of the recent market slump. This is the situation with pharmaceutical behemoth Pfizer (PFE -0.94%), a market leader in coronavirus vaccines and a producer of numerous other drugs.

The stock presently has a forward price-to-earnings (P/E) ratio of 7.4, which is extremely fair. This is in contrast to the industry-wide P/E of 12.5 for the pharmaceutical sector. Additionally, Pfizer has a lot to offer, including strong long-term growth prospects and a tempting dividend.

The pharmaceutical company may be underperforming the market this year, but a closer examination of the business reveals that it is a wise investment for the long run. See why, will we?

Thinking past the pandemic

This year, some COVID-19 vaccination leaders have significantly underperformed the market. Both Moderna and Pfizer’s associate BioNTech are on this list. Investors appear to be concerned about this sector’s dubious long-term prospects. After this year, there will almost surely be a decline in the market for coronavirus vaccinations, and it’s possible that these businesses won’t be able to maintain their recent surge in sales and profits.

This argument has some merit, however Pfizer differs from Moderna and BioNTech in that it offers a wide range of products unrelated to coronaviruses. However, the company’s lineup as a whole isn’t doing that well.

On an operational level, Pfizer’s overall revenue in the first quarter climbed by 53% year over year to $27.7 million. However, excluding the contribution from its COVID-19 products, the company’s operational revenue only increased by 1% year over year. Significantly less impressive.

Nevertheless, even though the need for coronavirus vaccinations and treatments may decline starting next year, it won’t disappear entirely. Most likely, people will keep looking for protection from COVID-19, especially those who are most susceptible to problems. Those who get sick will still have access to treatments.

There is some indication that COVID-19 has a substantially greater fatality rate than the flu, despite the fact that the two diseases are spread identically. Every year, patients receive flu injections to protect themselves. We may, therefore, reasonably anticipate individuals doing the same for COVID-19 going forward. Because of this, Pfizer’s products in this sector will continue to bring in some money and enable the company’s overall sales to move in the correct direction.

In 2023, Pfizer will have difficult year-over-year comparisons, but after that, the company’s current product line should still be able to provide positive results.

The month of September has traditionally been difficult for cryptocurrencies, with several big ones witnessing price declines throughout the month. For investors, however, it isn’t necessarily a terrible thing.

When prices are lower, it could be a good time to purchase. Buying the drop not only enables you to invest in pricey cryptocurrencies for a fraction of the price, but it may also position you for higher profits should prices rise again.

All cryptocurrencies are still speculative at the present, but Solana (SOL -4.79%) and Ethereum (ETH -1.90%) may be on the verge of seeing a more substantial rise.

1. Ethereum

Although Ethereum has long been a leader in the cryptocurrency industry, news about its most recent development, The Merge, has recently gained attention.

One of the most significant moments in the history of cryptocurrencies will occur when Ethereum switches from a proof-of-work (PoW) mining protocol to a proof-of-stake (PoS) system as a result of this upgrade. Due to the network using 99% less energy under PoS, it will also become much more energy-efficient.

Ethereum’s slow speeds and hefty transaction prices are a drawback. Sadly, The Merge won’t make those problems go away. However, it will lay the ground work for Ethereum’s next upgrade, which is anticipated for either 2023 or 2024 and should speed up and reduce the cost of the blockchain.

With a market valuation of over $209 billion, Ethereum has long held the title of second-most popular cryptocurrency. The Merge is a step in the right direction for Ethereum since it gives it a big edge over many other networks.

2. Solana

In many respects, Solana and Ethereum are comparable. It is a platform for smart contracts that supports decentralized programs like non-fungible token (NFT) markets. Despite being much smaller than Ethereum, it has one key edge over its greatest rival: speed. At the moment, it is the ninth most popular cryptocurrency with a market worth of around $13 billion.

The Ethereum network can only handle around 13 transactions per second at the present (TPS). However, Solana is managing around 3,000 TPS. Its top speed, according to the creators, is around 65,000 TPS.

Due of Ethereum’s slowness and exorbitant fees, a large number of developers and consumers have started turning to Solana. There is still plenty of time for Solana to acquire popularity in this market given that it will likely be one to two years before Ethereum releases its next version to solve these problems.

Of course, there are drawbacks to Solana as well. Its current network instability is one of its most urgent issues. Solana has had five significant outages in 2022 alone, some of which lasted for many hours.

The trust of consumers and investors has been understandably disturbed by these interruptions, which may have contributed to Solana’s sharp drop this year. All blockchains, meanwhile, sometimes have glitches and outages, so Solana’s developers need to figure out how to make the network more dependable if they want to make it a serious player in the cryptocurrency space.

While there is no ideal cryptocurrency, both Ethereum and Solana have certain benefits in the industry. Nobody can predict how they will do in the future, but they could be about to see significant growth.

The most recent earnings report from Five Below (FIVE -4.67%) didn’t excite investors. After the news, the value-oriented store’s shares dropped and are now down more than 30% in 2022. The shop mostly offers things priced at $5 or less.

Unexpectedly low consumer visitation figures at Five Below did indeed signal a challenging time ahead as the crucial Christmas shopping season draws near. But given the chain’s promising long-term outlook, the stock is still appealing today.

Here are a few justifications for why you would wish to include Five Below in your stock portfolio.

1. Patterns for long-term growth

The main finding of Five Below’s most recent report (for the period ending July 31) was that sales trends were less favorable than anticipated by management. Because of dwindling consumer visitation and reduced visit spending, comparable-store sales decreased by 6%. Those are blatant red flags for any shop aiming for expansion.

However, if you take a deeper look, you’ll see that Five Below’s market position is still strong. Yes, sales of fashionable goods have decreased from the previous year. However, the chain’s second-quarter revenues were up 50% over the same period two years before. Therefore, the reason for this most recent regress may have more to do with the increased traffic caused by the government’s financial stimulus measures a year ago.

The current launch of Five Below’s Five Beyond idea, which offers superior tech at tempting rates, is one of the company’s many potential growth initiatives. The chain won’t likely continue to shrink forever.

2. Good earnings

Financially speaking, Five Below is not having the same problems as other shops like Target. Despite recent rapid changes in customer demand patterns, the company avoided having to lower prices or halt orders. Instead, gross profit margin dropped to 34% of sales, a mere 1.5 percentage points lower.

The retailer’s financial situation deteriorated, as one would anticipate during a time of dropping revenues and increasing expenditures. However, operating margin is still 8.4%, which is far higher than the 4% that Target will produce in 2022. CEO Joel Anderson said on a conference call with investors that “our growth and size continues to benefit us and our clients.”

3. A better 2023 is ahead

The stock price decline may be attributed to management’s lack of confidence in a swift resolution to the challenges affecting Q2 sales. Consumers continue to prioritize discretionary shop expenditures above activities like vacation. Additionally, inflation continues to direct spending toward necessities.

These challenges persuaded management to cut its profitability prediction by 13% and its sales outlook by 3% in comparison to the previous forecast.

However, Five Below continues to aggressively expand its store base, and a number of its most recent openings were among its best thus far. Executives wouldn’t be preparing to launch more than 200 additional outlets in 2023 if they were anticipating a protracted drop in demand.

It is true that this company now carries a higher level of risk. Along with the rest of the retail sector, Five Below may see a weak Christmas shopping season, which would further reduce its 2022 sales and profitability. The most probable scenario, in my opinion, is that the retailer resumes a more typical growth profile beginning in 2023 as a result of the confluence of an increasing number of stores and increasing foot traffic at current locations.

Investors may earn significant returns by just hanging onto their shares during the present period of volatility given the stock’s lower value of 2.5 times revenues compared to over four in early 2022.

Everyone has heard the saying “don’t judge a book by its cover,” yet income-seeking investors sometimes disregard this wisdom when selecting stocks. Stocks in the S&P 500 index that have at least 25 years of continuous dividend growth are considered Dividend Aristocrats, and the majority of them get more attention than they merit.

Investing in dependable dividend-paying companies is a fantastic strategy to get passive income. However, if you’re set on sticking with the exclusive group of Dividend Aristocrats, choose stocks that have a strong chance of beating the market as a whole.

For five long decades, this pair of connected healthcare enterprises has been paying and increasing its quarterly dividends. Best of all, they could be entering their prime.

1. Laboratories Abbott

A broad healthcare company with interests in nutrition, medical equipment, and diagnostics is Abbott Laboratories (ABT 0.95%). It increased its dividend distribution for the 50th year in a row in December thanks to a variety of companies.

When a nationwide scarcity of specialty formulas resulted from the closing of one of Abbott’s baby food production facilities, the company received a lot of unfavorable press. Investors expecting consistent growth will be relieved to see that the company’s advantages extend beyond the specialty nutrition sector.

Abbott shares now have a 1.7% yield. Although the payment isn’t all that appealing right now, it might increase significantly over the coming years. The FDA approved Abbott’s newest continuous glucose monitoring (CGM) gadget in May.

The small Freestyle Libre 3 is smaller than CGMs from Dexcom’s G7, its closest rival. Abbott’s invention has a head start as well. The G7 has still not received FDA approval, and a U.S. launch won’t likely start until 2023.

Abbott has been able to increase its dividend by 77% over the last five years and might start expanding much faster because of its steady income streams. According to the US Centers for Disease Control, there are now more than 37 million Americans living with diabetes, and Abbott may have the top CGM for the foreseeable future.

2. AbbVie

In order to protect Abbott Laboratories’ stockholders from the potential loss of market exclusivity for Humira, the most popular anti-inflammatory medicine in the world, AbbVie (ABBV 0.72%) was spun out from Abbott Laboratories in 2013. The business has increased its dividend by an astounding 120% over the previous five years because to the sales of Humira and a growing list of younger medications.

Now that investors are concerned that the company’s bottom line won’t be able to keep rising, AbbVie shares provide a dividend yield of 4%, which is above average. Humira started facing competition from less expensive biosimilar versions in the United States this spring, and sales are expected to decline dramatically in the second half of the year.

32% of total revenue was attributable to Humira sales in the United States, which totaled $4.7 billion in the second quarter. Fortunately, AbbVie has new medications that could more than make up for the losses. The psoriasis injectable Skyrizi and the arthritis medication Rinvoq were both given FDA approval in 2019. This combination is expected to generate combined sales of $7.3 billion this year, and according to AbbVie, those revenues might reach $15 billion by 2025.

U.S. Growth may be challenging to accomplish over the next year or two if Humira sales decline faster than AbbVie’s younger product portfolio. Investors who value consistent dividend increases will be relieved to learn that the business may continue to pay out dividends even if Humira sales start to decline.

Just 43.5% of the free cash flow produced by AbbVie’s activities during the last year was utilized to satisfy its dividend requirement. This company has a decent chance of prospering over the long term thanks to a well-funded dividend program and fresh growth drivers to offset Humira’s inevitable losses.

Do you want to know how to turn a little money now into a lot of money tomorrow? Most likely, if you’re reading this, you do. Even if you start out with almost nothing, investing in stocks is one of the few ways to accumulate a large amount of money inside a single lifetime. In fact, if you manage things well, a small investment of $20,000 might grow to reach as much as $350,000. Here is how to do it.

Yes, all the way from here to there.

Does it seem too wonderful to be true? It’s not. It is both conceivable and probable to put a symbolic down payment of $20,000 on a pleasant future supported by a $350,000 savings account. However, there is a catch.

First things first, however.

Let’s just use the S&P 500 (GSPC 1.53%) index as our stand-in for the whole stock market for the sake of simplicity. It is definitely feasible to get wealthy by owning individual stocks, but it is simpler—and sometimes just as effective—to just invest in a basket of equities like the S&P 500 itself.

Let’s also suppose that the present will mostly resemble the past. In other words, let’s suppose that, like in previous decades, the S&P 500 will increase by an average of 10% annually. Some years are better than others, and on occasion the market even posts a year-long loss. But given enough time, 10% annual returns are a realistic expectation.

If you invest $20,000 in an S&P 500 index fund today it should be worth around $350,000 thirty years from now.

To be successful with stocks in this way, there are two caveats.

The two primary success factors

One of these factors relates to how your investment is handled once it is made. Any profits after investing should be immediately reinvested back into the market. Likewise for any profits received.

It is known as compounding. By earning future profits on earlier gains rather than only on your original principle, this strategy makes sure that you have as much of your money as possible working for you for as often and as long as feasible. Your average yearly return on an S&P 500 index fund is almost halved if you don’t reinvest your profits.

The other (related) caveat is that it takes a full 30 years to realize this kind of long-term advantage. You won’t succeed nearly as well if you settle for less.

Only the latter seven years of the 30-year period, which included half of the $330,000 net gain, were successful. In other words, if you held onto a $20,000 investment for about 23 years, you would only have a little bit more than $160,000 at the end of that period. That’s a significant difference, especially if your retirement fund will cover the majority of your expenses.

Naturally, this implies that you should start investing your money as soon as you can.

Better to take action than to do nothing at all.

In order to be clear, the scenario above implies you’ll only invest $20,000 once in the stock market and never add more money. However, you’ll probably be able to add more money as you go. Over the course of 30 years, even a little increase in yearly investment may have a significant effect. For instance, in the above scenario, increasing your assets by only $2,000 per year would increase your ultimate nest egg to around $680,000.

However, the fundamental lesson is the same in both cases. That is to say, it is well worth the time and effort to enter the stock market as soon as possible. When you start to get progressively more income from your prior profits and dividends, a very small stash might grow to an unexpectedly large one.