Your passive income grows while you do absolutely nothing when you own shares in a firm that (at least occasionally) raises its dividend.

In that sense, let’s examine two venerable corporations, Altria Group (MO 0.20%) and General Motors (GM 0.56%), that just announced dividend increases and see just how much more they are rewarding their shareholders.

1. Altria Group

Income investors who don’t mind that Altria’s primary product is cigarettes have traditionally favored the company. This is due to the fact that Altria has consistently spit out a high-yield dividend every quarter that is maintained by routine (usually once-per-year) hikes. This will increase by 4% to $0.94 per share in 2022.

Altria’s classic cigarette goods have low production costs, but because they are addictive, the corporation can charge high rates for them. Juul, the company’s controversial e-cigarette brand, is a different matter; if a recent delay placed on the Food and Drug Administration’s (FDA) prohibition does not result in an outright reversal, it may even be completely removed from the product range. Concerning is also the cigarette market’s ongoing downturn.

The company had a dismal decline in net income of almost 60% and a roughly 6% year-over-year decline in net revenue in its most recent reported quarter. Altria anticipates a 4% to 7% increase in annual per-share profitability over 2021, thus the remainder of the year should be better. It did not offer any revenue estimate, but experts as a whole anticipate a little decline in revenue of 1% annually.

For those who feel comfortable investing in sin stocks, Altria has historically been a good dividend stock. Its future viability in an industry that is now a shell of what it once was is the question. We’ll see if it can continue to do so; thus far, it has managed to withstand the storm without suffering significant erosion in its principles.

Altria’s forthcoming dividend, based on the most recent closing share price, would yield a sizable 8.4%. Investors with records as of September 15 will get the first payout of the increased amount on October 11.

2. General Motors

General Motors is to automobiles what Altria is to cigarettes. With their electric vehicles (EVs), newcomers like Tesla and Rivian may generate headlines, but the long-standing incumbent carmaker is still hanging in there and fighting hard.

One way it does this is by restoring its payout, which is the ultimate dividend boost. General Motors is transitioning to a quarterly dividend of $0.09 per share from exactly $0.00 in the prior quarter — the business last made a distribution in March 2020. Additionally, it plans to revise its share repurchase program, increasing the authorization from $3.3 billion to $5 billion, in order to give its stock a little more jump.

In announcing the reintroduction of the dividend and the rise in the buyback, General Motors said the bold development of its EV offerings and advances in modular battery production has created room for such investor-pleasing initiatives. “Progress on these important strategic goals has enhanced our confidence in our ability to fund growth while also returning cash to shareholders,” CEO Mary Barra said.

The reinstituted dividend from General Motors, which yields 0.9% at the present stock price, will be paid on September 15 to shareholders of record as of Aug. 31.

For income investors, particularly those who are older and must prioritize income and capital preservation, real estate investment trusts (REITs) are a gold mine.

A landlord/tenant model is utilized by many of these businesses. The assets of REITs might include forests, office space, retail space, mobile tower capacity, and even retail space. These companies must pay little federal taxes in exchange for having to distribute the vast majority of their profits as dividends in order to be considered a REIT.

Here are two of the best REITs for income investors to consider.

1. Income stock American Tower has a fantastic long-term growth story.

Cellphone REIT American Tower (AMT 2.09%) is gaining from the rise in mobile data consumption. The business constructs cellular towers and rents space on them to mobile phone providers, cable providers, and governments.

As more people utilize video on their smartphones, there has been a surge in the demand for mobile data, which some estimates predict will more than double by the end of 2027. A large portion of this will be fueled by more people using 5G.

American Tower recently acquired data REIT CoreSite as part of its expansion into the data center industry. The cloud services and hosting that data center REITs typically provide for large data consumers complement American Tower’s core tower business.

Revenues at American Tower increased by 16% in the second quarter of 2022, and the business has a history of raising its quarterly dividends continuously since 2012. As a result, American Tower offers income investors the best of both worlds: a long-term growth story and gradually rising income. The dividend yield is now 2.3%.

2. With an emphasis on triple net leases, Realty Income is a very cautious income investment.

A REIT with a focus on single-tenant buildings with long-term leases is Realty Income (O 0.77%). These contracts often have extended terms and automatic rent increases. According to the leases, the tenant is responsible for paying the majority of the property’s expenses, such as taxes, upkeep, and insurance.

Contrary to the gross lease that most people are accustomed to, this sort of lease is known as a triple net lease. In a gross lease, the landlord bears all expenses outside the rent payment from the tenant. Given the length of these contracts, thorough tenant verification is essential. Almost half of Realty Income’s tenants have credit ratings that are considered investment-grade.

Realty Income hiked their monthly dividend three times in 2020, whereas the majority of REITs reduced their payments due to the pandemic. Drugstores, convenience stores, or dollar stores make up the majority of Realty Income tenants. These companies were allowed to continue operating because they were deemed necessary during the COVID-19 epidemic. While several of Realty Income’s tenants (particularly movie theaters and fitness facilities) were temporarily forced to close, Realty Income performed better than malls and outlets Reit.

A Dividend Aristocrat, Realty Income is a veteran with a 28-year track record of yearly dividend increases. One of the safest REITs available, the company ought to be a staple asset for an income investor. Its dividend yield at the moment is 4.4%.

This has been a bad year for short-term investors, but not for traders who buy hold for the long haul. Currently, there are two or more ultra-high-yield dividend stocks that might double your principal by the end of 2028.

Currently, dividend yields from AGNC Investment and Annaly Capital Management are 12.2% and 13.8%, respectively, for investors. Investors who purchase shares now and reinvest their dividends stand to see their initial investment more than double by 2028.

Of course, these stocks must keep paying out at the same rate. The market anticipates difficulty coming that will force these highly specialized equities to reduce their dividends, which is why they now provide mouth-watering yields.

Do these stocks merit the danger? Find out why they give such high returns before risking any of your hard-earned cash.

Investment by AGNC

This real estate investment trust (REIT) has no real estate holdings. AGNC Investment purchases mortgage-backed securities rather than real estate. More precisely, the corporation concentrates on securities whose principals are backed by the United States government and have a long history of interest payments.

The business strategy of mortgage REITs is rather simple. With money they borrow at comparatively low short-term loan rates, they hope to purchase high-yielding long-term assets. Because short-term rates have been increasing more quickly than long-term rates, AGNC Investment’s stock price is under pressure.

You undoubtedly already know that the Federal Reserve has been boosting interest rates to battle growing inflation if you’ve been reading financial media over the last year. Short-term loan rates have increased more recently than long-term lending rates. For mortgage REITs like AGNC, this circumstance, known as an inverted yield curve, makes it difficult for them to generate any revenue. Due to this, the business lost $1.08 billion in the first quarter of this year and an additional $729 million in the second.

The most crucial thing for a regular investor to keep in mind concerning inverted yield curves is that they are transient. Despite being in a difficult situation right now, AGNC Investment may find itself in a better position later on.

Capital Management Annaly

Another mortgage REIT that now provides a high dividend yield is Annaly Capital Management. Investors are concerned that the business won’t be able to continue its payment when rates rise too quickly. Despite this, Annaly has continued to generate net earnings this year that are more than enough to cover its dividend commitment.

The bulk of Annaly’s money is being invested in securities guaranteed by government entities, similar to AGNC Investment. Additionally, Annaly has a mortgage servicing business stream that is expanding quickly.

The annual payment for mortgage servicing rights is normally 0.25 percent of the entire mortgage debt. Increased interest rates have the direct effect of increasing Annaly’s expenses and mortgage amounts. While the corporation shifts its portfolio into new agency-backed securities that provide greater rates of return, this might be a useful hedge.

Berkshire Hathaway, owned by Warren Buffett (BRK.A -0.26%; BRK.B -0.39%), has not had a good year. Over 7% of the value of Berkshire’s shares has been lost in the first eight months of 2022. However, the stock of the diversified holding company has performed much better than the general markets this year. The S&P 500 has decreased 17.6% over this time, the Dow Jones Industrial Average has fallen 13.8%, and the Nasdaq Composite has fallen an ugly 25.6%.

The relative resilience of Berkshire in this turbulent market is unequivocal evidence that the Oracle of Omaha and his investment team still have a knack for choosing winning stocks. Which equities from the Berkshire Hathaway portfolio are the greatest choices for investors to buy in September? The soaring oil and gas business Occidental Petroleum (OXY -2.75%) and the battered technology behemoth Apple (AAPL -0.82%) are my two favorites.

Occidental Petroleum: A bullish energy market

It’s no secret that Berkshire has been snatching up Occidental’s shares this year because upstream-focused oil and gas businesses like Occidental have benefited from rising crude oil prices.

Oil firms engaged in the discovery, extraction, and production of raw materials are referred to as “upstream” companies. These businesses often profit from increased oil prices, which Occidental and its competitors have unquestionably seen in 2022.

Because of the sharp increase in oil prices, Occidental, for example, has earned remarkable $16.3 billion in free cash flow and paid down a significant $14.9 billion in debt during the previous five quarters. Furthermore, some experts believe that crude oil prices will rise again next year due to geopolitical upheaval, supply chain issues, and the world’s growing need for fossil fuels.

Thus, it seems like this oil and gas stock held by Berkshire has a lot more space to grow.

Apple: Purchase the fear

Technology behemoths like Apple have been negatively impacted this year by the Federal Reserve’s ongoing interest rate increases. Through the first eight months of 2022, its shares have decreased 12.2%.

Due to worries that rising interest rates could push the United States into a recession, which would make consumers reconsider their discretionary spending on high-end products like the iPhone, the Apple Watch, or its noise-canceling AirPods, investors have become more cautious with the stock this year.

At least, that is the theory. In truth, Apple hasn’t seen many negative consequences from increasing interest rates in 2022, and management isn’t forecasting any kind of decline in yearly sales in 2023 due to a recession. The top line is anticipated to increase by a healthy 4.8% next year thanks to a number of major product releases, including the most recent models of the iPhone and Apple Watch.

As a consequence, the current valuation of the company’s shares is just 24.5 times anticipated earnings. That is not much below Apple’s lowest point since the COVID-19 bear market bottomed out in March 2020. But value investors have taken note of this absurdly low price. For instance, Berkshire purchased approximately 3.9 million Apple shares during the second quarter of 2022. That lead on this undervalued tech company may be worth following for astute investors with a good eye for a bargain.

Successful dividend stocks have a long history in the consumer industry. Since purchasing its Coca-Cola stock in 1988, Berkshire Hathaway, led by Warren Buffett, has generated yearly dividend returns of more than 50% of the initial investment. In 1890, Procter & Gamble distributed its first dividend! Consumer dividend stocks continue to provide chances for novice investors, even if some of these businesses are probably better to hold than buy right now.

Many of them also offer the possibility of future dividend increases and pay dividends that are much higher than the 1.6% average of the S&P 500. Target (TGT -0.15%) and Advance Auto Parts (AAP -0.24%) are two dividend growth companies that should perform well for income investors given current market circumstances.

1. Target

With its current annual payout of $4.32, Target generates a 2.6% return on investment. The business is a Dividend King because it has grown its dividend for 51 years running. An expectation that dividends would increase annually is created by such a lengthy run. It was noteworthy that Target increased its dividend by 20% this year and 32% in 2021 despite the continuous pressure.

Analysts attribute Target’s ability to enhance the dividend to this extent to its competitive advantages. Faster retail deliveries have been made possible by same-day fulfillment, which makes use of its 50-state shop base. Customers were probably also drawn by so-called “stores inside a store,” like the Ulta Beauty outlets within several Target stores.

These benefits are essential. Amazon, Costco, and Walmart continue to provide fierce competition. Additionally, Target issued a warning in June that its efforts to decrease its inventory will be hampered by an inventory overhang. As with many other retailers, Target placed excessive orders due to supply chain issues.

Its free cash flow has significantly decreased as a result of the necessity to liquidate merchandise. Target has posted a $2.6 billion negative free cash flow so far this year. Target spent $842 million on the dividend over the same time period, which may be the reason why its cash position has decreased to $1.1 billion from $5.9 billion at the end of 2021.

For investors, this isn’t always a negative thing. Target’s dividend should be sustainable at $2.1 billion in free cash flow for the first half of 2021. This should be good news for the business, along with the capacity to dramatically increase its dividend in a cutthroat industry.

2. Advance Auto Parts

Shareholders of Advance Auto Parts currently get an annual dividend of $6.00, or a yield of around 3.5%. Investors should pay attention to its recent dividend history, nevertheless.

Advance Auto Parts increased their yearly dividend to $1.00 per share in 2020 after years of paying just $0.24 per share. After that, the payment increased to $3.00 per share in 2021 and $6.00 per share presently. Over the course of three years, the payment increased 25-fold overall.

The need for transportation and the status of the auto industry have helped the retailer of auto components. Because most customers place a high importance on having functional vehicles, the auto parts industry is recession-resistant. The average age of a car, according to S&P Mobility, is up to 12.2 years, which will probably keep auto components in high demand.

It must still go up against AutoZone, Genuine Parts, O’Reilly Auto, and many more businesses. Additionally, since EVs usually utilize less components, the popularity of EVs might eventually put pressure on Advance Auto Parts.

Additionally, Advance Auto Parts has suffered with an inventory overhang, much like other businesses. Free cash flow decreased from $647 million in the same time of fiscal 2021 to $97 million in the first half of fiscal 2022 (which concluded on July 16). For the first two quarters of the year, dividend expenses from the dividend increases were $246 million.

Nevertheless, the 2021 free cash flow shows that it can pay its dividend as long as sales stabilize. Investors may still get a sizable cash return from this company even if the dividend increases cease for a while.

Over the last several years, Advanced Micro Devices (AMD -5.89%) has launched a significant recovery. The once-lagging company has produced cutting-edge semiconductors and seen tremendous revenue growth for its investors.

That has raised its stock price and, therefore, the market value to $140 billion over time. The current concern is whether AMD’s expansion would enable it to become a $1 trillion stock by 2030.

How to get to $1 trillion

In order to achieve that milestone, AMD stock must increase by an average of 28% annually, from its current value of $140 billion to $1 trillion in eight years. Of course, a lot can happen in eight years, and even the most knowledgeable analyst would probably be unable to precisely predict whether it would be able to accomplish that objective. However, the situation suggests that the objective is reachable.

However, AMD has emerged as a market leader in both CPUs and GPUs. Despite recent difficulties, the gaming industry has progressively increased its market share in the data center business, surpassing once-dominant Intel, according to Mercury Research. Additionally, recent acquisitions of Xilinx and Pensando have improved its capabilities for edge computing and supercomputing.

Revenue of about $12.4 billion in the first half of the year increased 70% from the same time in 2021. The rise in sales contributed to the non-GAAP net income’s 73% increase to $3.3 billion in the first two quarters of 2022.

Nevertheless, despite these gains, AMD stock has been hit hard by the Nasdaq bear market. Since peaking in November of last year, it has dropped by 45% in value. It also trades at 37 times earnings right now. That multiple, which is substantially less expensive than Nvidia’s 53 P/E ratio, could not accurately represent the entire scope of its growth. While AMD may still seem to be a good semiconductor stock to buy at the moment, it may need to keep up its rapid growth to sustain its high valuation.

AMD’s uncertain course

A downturn is anticipated, according to analyst projections. Although 60% sales growth is predicted by consensus projections for this year, revenue growth is expected to decelerate to 13% in 2023.

Though the semiconductor sector is expected to expand at a compound annual growth rate of 12% until 2029, according to Fortune Business Insights, the 2023 sales figure is at least consistent with predictions. Additionally, AMD seems to be in a good position for a comeback given that the data center industry and other sectors are experiencing a secular bull market.

These circumstances could indicate that CEO Lisa Su, who turned AMD from a penny stock on the verge of bankruptcy to the powerhouse it is today, is more responsible for achieving the $1 trillion objective. She also chose to concentrate on CPUs and GPUs, which helped the company become more focused.

Stockholders shouldn’t, however, expect she’ll work for AMD indefinitely. Su has previously worked with Texas Instruments, IBM, and Freescale, which is now a part of NXP Semiconductors, after she earned her PhD at MIT in 1994. Prior to becoming the CEO in 2014, she worked at AMD since 2012.

Su is 52 years old right now. She has a number of options now that AMD has been a success. The decision as to whether Su will continue working at AMD for the rest of her career, take on another firm turnaround, or choose to retire ultimately rests with Su.

Although AMD’s growth rate suggests a $1 trillion market valuation in 2030 is feasible, unexpected developments today might scuttle that growth narrative.

However, AMD has to perform well when it matters. Even if sales growth temporarily slows to 13%, the firm seems prepared to offer market-beating growth. Thus, even if this semiconductor company does not reach $1 trillion by 2030, investing in AMD now could provide significant gains.

The virtually limitless upside is what attracts so many people to investing in cryptocurrency. As soon as the next bull-market surge starts, even cryptocurrencies that have previously had 10-fold gains may still have another 10-fold in them. Since so many cryptocurrencies are now trading at astronomically low prices, many of them may recoup prior highs as soon as market sentiment strengthens.

But we’re not simply searching for cryptocurrencies with a chance of appreciating by a factor of two or three. We’re seeking for the kinds of investing strategies that will make you a cryptocurrency billionaire. You might be able to retire early if you pick the appropriate cryptocurrency. The two cryptocurrencies Polygon (MATIC 5.53%) and Chiliz (CHZ -2.67%) ought to be on your radar for investing right now.

Polygon

The top Layer 2 scaling option for Ethereum (ETH 0.33%) is Polygon, which tops the list. You can get all of Ethereum’s upside potential by investing in Polygon, but at a significantly cheaper starting price. Due to the enthusiasm surrounding the Merge, a project to enhance the blockchain, Ethereum has traded almost as high as $2,000 this summer. Polygon, on the other hand, is still selling for less than a dollar. Given its modest starting price, it may come as no surprise that Polygon’s worth more than quadrupled this summer as investors looked for other ways to profit from the Merge.

The potential that Polygon will have after the Merge is what makes it so fascinating. It’s not simply a leveraged wager on Ethereum, though. Polygon is quickly developing into a very fascinating bet on the future of Web3, the metaverse, and blockchain gaming thanks to collaborations with organizations like Disney. If Disney chooses to involve Polygon in upcoming entertainment endeavors, it is not illogical to believe that a $1 investment today may increase in value dramatically over the following few years.

Chiliz

Another choice that may make you a billionaire is Chiliz, a cutting-edge cryptocurrency utilized by sports teams and organizations to engage their fan bases. Chiliz has increased more than 125% in the previous month, and it appears to be picking up speed as it signs on more and more international sports teams. Chiliz has previously worked with leading basketball, football, and soccer clubs to distribute fan tokens through its platform for fan engagement, Socios.com.

The fan token’s idea is straightforward yet effective: Once you have a fan token, you may vote on team matters, attend exclusive VIP events, and take advantage of exclusive membership possibilities. The value of your fan tokens increases as you accumulate more of them. You must first acquire Chiliz before you can purchase these fan tokens. So you may think of Chiliz as a particular kind of cryptocurrency that also comes with unique benefits and advantages. Chiliz offers investors a massive global scaling opportunity, which is what makes it such an appealing investment. Chiliz, which now trades for roughly $0.20, represents a potential 10-fold return on investment.

Stocks have suffered greatly in this year’s bear market, and many reputable corporations have seen their prices fall. The return of inflation has been a major contributor to this year’s bear market, which has prompted the Federal Reserve to move decisively and raise the federal funds rate.

There is an old market saying that goes, “Don’t fight the Fed,” which means that rising interest rates are typically bad for the economy. Having said that, it seems like the Fed is getting closer to the conclusion of its tightening cycle, which is excellent news for markets as a whole. Here are two high-quality businesses that have seen their prices fall during the current bear market and may soon see a recovery.

An expert mall operator working the discount aisle

A real estate investment company (REIT) called Simon Property Group (SPG -1.74%) manages upscale stores and malls. Additionally, the corporation controls 80% of the Taubman Realty Group, another mall operator.

Due to worries that a recession brought on by increasing interest rates would have a detrimental impact on consumer purchasing, Simon has underperformed this year.

Although this is a legitimate concern, the company’s second-quarter results show that business is not, at least not yet, slowing down. In comparison to 91.8% a year earlier, occupancy was 93.9%. Although net income and funds from operations (FFO) decreased year over year, one-time costs were primarily to blame.

The job market has remained strong so far this year despite rising interest rates and declining GDP. Both salaries and unemployment are growing. Another advantage for consumers is the seeming return to normality of the sky-high fuel prices of the spring and early summer.

According to Simon’s forecast, comparable FFO will be between $11.70 and $11.77 per share. For a top-tier REIT like Simon, the business is selling for less than 9 times FFO per share at the midpoint of forecast. The $6.80 per share dividend that is now being paid out is fully covered by operating income, giving the company a 6.5% yield. Earnings might rise if the economy and consumer spending continue to do well.

Benefiting from a decrease in economic uncertainty

Another business that has underperformed this year is S&P Global (SPGI -0.95%), which has benefited from a decline in economic unpredictability. The credit ratings business, as well as its stock and bond indexes, are what S&P Global is best known for (for example, the S&P 500 and all the sub-indexes). It recently acquired IHS Markit, which owns the Carfax service and offers a wide range of data products.

Due to decreased bond issuance, the company’s second-quarter profits fell short of projections. Bond issuance increased during the pandemic as businesses borrowed to benefit from historically low interest rates.

Companies often put capital raising on hold during recessions or times of increasing interest rates since growth plans are frequently postponed and the markets are frequently hostile to fresh issuance. As the Fed’s tightening cycle comes to a close, uncertainty regarding interest rates will dissipate over the next several months.

According to the fed funds futures, the fed funds rate will reach its high in the range of 3.75% and 4%, then remain there. Additionally, because the corporation receives royalties from the usage of its indexes and their derivatives, a return to a bull market will result in higher stock trading volume, which is advantageous.

As it completes its merger with IHS Markit, S&P Global will also gain. Many expenses will be reduced, which will increase revenue. The stock is rather expensively priced at 32 times 2022 earnings, although this is based on what should be trough earnings. Over 20% rise in profits per share is predicted by the market between 2022 and 2023.