PLD - Got $1000? Buy These 2 Dividend Stocks Before It's Too Late.
2024-07-16 05:06:00 ET
Higher interest rates over the past couple of years have weighed on many dividend stocks. They make borrowing money to fund acquisitions and expansion projects more expensive, which can slow growth. Higher rates also make lower-risk income options like bonds more attractive. That weighs on the value of dividend stocks, pushing up their yields to more enticing levels.
Rates could go from a headwind to a tailwind for dividend stocks in the coming months if the Federal Reserve begins cutting them as many expect. So i nvestors with a little bit of money to spare might want to start scooping up high-quality dividend stocks while prices remain low so they don't miss out on today's bargains. Realty Income (NYSE: O) and Prologis (NYSE: PLD) stand out as some of the best ones to buy before they start rallying.
Realty Income's stock has lost about a quarter of its value from the peak before rates started rising in early 2022. That rate-driven sell-off has pushed its dividend yield up to more than 5.5%, several times higher than the S&P 500 's 1.3 % yield. That's toward the high end of its historical average, which has been in the mid-4% range over the past decade. At the current rate, a $1,000 investment would generate more than $55 of annual dividend income.
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Got $1,000? Buy These 2 Dividend Stocks Before It's Too Late.