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Young Americans have always been seduced by the idea of ​​leaving their daily 9 to 5 lives, enjoying their prime by the beach and doing what they love. But in recent years, this idea has grown in popularity. In a recent survey conducted by the Federal Reserve Bank of New York, 45.8% of respondents said they were likely to work after age 62. This measure averaged 55% between March 2014 and March 2020, according to the bank.
The early retirement movement gained prominence during the COVID-19 pandemic, as millions of Americans began working from home and saving money thanks to stimulus checks. In October 2021, Federal Reserve Bank of St. Louis economist Miguel Faria-e-Castro estimated that three million Americans took early retirement because of the pandemic. However, this phenomenon, also known as the “Great Resignation”, reversed itself when inflation began to affect American households.
Early retirement communities like Reddit’s /FinancialIndependence continue to grow. Investing in dividend stocks is often touted as one of the quickest and safest ways to retire early on Reddit. We scoured several discussion forums on Reddit to see the most popular dividend stocks that investors on the platform recommend for retirement based on their personal experience.
Pfizer
Pfizer Inc. (NYSE:PFE) is a notable dividend stock and popular among Redditors looking to make a living off dividends. Pfizer shares have fallen about 7% over the past year. The stock’s yield is around 6%, which is high compared to the industry average of around 2.3%. The editors believe Pfizer is going through a post-COVID slump, but it is poised to rebound with strong ongoing growth catalysts. During the first quarter, Pfizer’s revenue from non-COVID products saw 11% year-over-year operational growth. Pfizer has increased its dividend for 14 consecutive years.
Philip Morris
With 16 consecutive years of dividend growth and a 5% yield, the tobacco company Philip Morris International Inc. (NYSE:MP) is a top choice for many Redditors who live entirely on dividends. Faced with the decline in popularity of traditional tobacco products, Philip Morris is aggressively expanding into non-tobacco products. The company expects to generate approximately two-thirds of its net revenue from non-traditional products by 2030. The company reported strong first-quarter results in April and updated its guidance for the full year 2024. Adjusted EPS for the quarter came in at $1.50, beating estimates by $0.09, while revenue jumped 9.7% year over year to $8.8 billion of dollars, surpassing the consensus estimate of $350 million. Philip Morris expects its organic revenue growth in 2024 to be between 7% and 8.5%, up from its previous forecast of 6.5% to 8%.
Main Street Capital
Texas-based business development company Main Street Capital Corp. (NYSE:MAIN) is one of the most popular monthly dividend stocks among Redditors in the retirement and dividend communities on the social media platform. Main Street has paid dividends consistently since 2007 and has increased its dividend every year since 2014.
Main Street management said during the first quarter earnings conference call that the company’s net investment income during the quarter was 54% higher than the monthly dividends the company paid to its shareholders and 9% higher. greater than the total dividends paid to shareholders. Total investment income in the March quarter was $131.6 million, easily beating the Street consensus of $127.9 million.
Altria
Reddit’s Retirement and Dividend Communities Love Altria Group Inc. (NYSE:MO) due to its dividend yield (over 8%) and impressive dividend growth history (54 consecutive years of increases). Retail investors on Reddit believe the stock is undervalued and poised for growth due to the growth of recreational marijuana and non-tobacco products.
Last year, Altria completed the $2.75 billion acquisition of NJOY Holdings, a vaping products company. Analysts believe growth in the oral tobacco and vaping products category could offset declines in the smoking products segment.
Altria’s valuation is indeed depressed. The stock trades at a forward P/E of 9.05, well below the industry average P/E of 17.24.
IBM
International Office Machinery Society (NYSE:IMB) is one of the most talked about stocks in Reddit’s retirement and dividend communities, as many Redditors living off dividends have tech stocks in their portfolios. IBM is the sweet spot between dividend income and stock growth, as some writers believe the company’s cloud and AI businesses have the potential to increase IBM’s share.
IBM has recorded 29 consecutive years of dividend growth and a 3.95% yield. In April, IBM increased its quarterly dividend by 0.6%, to $1.66 per share. The same month, IBM announced plans to buy HashiCorp. for $6.4 billion. The company said the acquisition would allow it to expand its hybrid cloud platform for AI. Wamsi Mohan, an analyst at Bank of America, said IBM has the ability to drive HashiCorp’s growth through its customer base.
Real estate income
California-based REIT Real estate income company (NYSE:Oh) is a top monthly dividend stock, having increased its dividends for 29 consecutive years. Editors are fond of this high-yielding (5.9%) dividend growth stock. Realty Income increased its monthly dividend by 0.2% on June 11, to $0.263 per share. The company also raised the lower end of its 2024 earnings forecast. It now expects adjusted FFO per share for the year to be between $4.15 and $4.21, up from to its previous forecast of $4.13 to $4.21.
Apple
Despite a low yield, Apple Inc (NASDAQ:AAPL) is one of the favorite dividend stocks on Reddit, as retail investors on the platform believe the iPhone maker is a solid addition to a diversified dividend portfolio. With excess cash and growing competition, Apple is prioritizing shareholder returns more than ever. It has increased its dividends every year for the past decade. Earlier this year, Apple increased its dividend by 4%. It’s still a growth stock, and many analysts are betting that Apple’s AI plans will pay off. The stock soared to new highs after Apple’s latest AI-related announcements at the annual Worldwide Developers Conference.
In the latest note, TF International Securities analyst Ming-Chi Kuo praised Apple’s AI move and said the company could have a competitive advantage over its peers as it has “defined with success of AI on devices.
Coca-Cola
Coca-Cola Co. (NYSE:EAST) has more than six decades of dividend growth, a strong business and a 3% yield. The editors believe these old-fashioned, “boring” dividend stocks are important for any balanced dividend portfolio. Coca-Cola’s organic revenue in the first quarter jumped 11% year-over-year.
The company’s defensive activities make it an all-season dividend stock. In May, Goldman Sachs said in a note that Coca-Cola was one of the stocks “immune” from headwinds from faltering consumer spending amid rising inflation.
Are you looking for higher yielding opportunities?
The current high interest rate environment has created an incredible opportunity for income-seeking investors to achieve massive returns, but not through dividend stocks… Some private market real estate investments give retail investors the opportunity to capitalize on these high yield markets. opportunities and Benzinga identified some of the most attractive options to consider.
For example, the investment platform backed by Jeff Bezos has just launched its Private credit fund, which provides access to a pool of short-term loans backed by residential real estate with a net annual return target of 7% to 9% paid monthly to investors. The best part? Unlike other private credit funds, this one has a minimum investment of just $100.
Don’t miss this opportunity to take advantage of high yield investments while rates are high. Check out Benzinga’s favorite high-yield deals.
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