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Utility stocks tend to thrive in uncertain economic conditions due to their recession-proof characteristics. With the Fed holding interest rates high and top economists warning of an impending market downturn, these stocks are in for a massive upside in the coming months.
Whether in a recession or not, utility stocks are a solid bet for income investors looking to build their portfolios through the dividend reinvestment strategy. Using dividend income today to build a more robust portfolio for the future can set you up with a substantial stream of passive income.
Below are two dividend stocks that may appeal to the risk-averse investor. Their yields are higher than those of the bond market and money market funds, and the offer significant upside potential.
National Grid
National Grid plc (NYSE:NGG) is a multinational electricity and gas company with a market cap of $40.19 billion. The stock has paid a dividend for 17 consecutive years and has a five-year dividend growth rate of 3.36%. The stock currently has a forward dividend yield of 8.77%, higher than the industry’s average of 3.35%.
Its payout ratio is 96%, which is high but not overly concerning given the company’s strong fundamentals.
AT&T
Another option that may be a good choice for income investors is AT&T Inc (NYSE:T), the world’s largest telecom company by market cap. AT&T offers a forward dividend yield of 6.3% at a modest payout ratio of 59.9%.
The company has solid fundamentals to support its dividend payments with growing revenues, improving earnings and a stable free cash flow position. Moreover, its debt load is manageable and within the industry’s average.
There Are Better High-Yield Opportunities in The Private Markets
The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider.
For instance, Basecamp Alpine Notes offers a target APY of 9% with a term of only three months, making it a powerful short-term cash management tool with incredible flexibility. EquityMultiple has issued 61 Alpine Notes Series and has met all payment and funding obligations with no missed or late interest payments. With a low minimum investment of just $1,000, Basecamp Alpine Notes makes it easier than ever to start building a high-yield portfolio.
Don’t miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga’s favorite high-yield offerings.
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This article 2 Reliable High-Yield Dividend Stocks Offering Yields Above Money Market Funds originally appeared on Benzinga.com
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