The hottest markets, industry trends, and product launches make for exciting stock growth, but with macroeconomic factors at play, even these best sellers will face volatility.
However, dividend stocks are the best for weathering this storm and maintaining a steady profit for investors.
- Hercules Capital and Verizon offer two of the most promising dividend stocks to buy this year for long-term, passive income.
- As a Business Development Company, Hercules Capital will provide a substantial return to investors, further supplemented by its expanding assets and income.
- Verizon competes in the fierce telecommunications market but proves it holds the crown year after year for consistently raising dividends and offering great value.
Dividend investing is a tried-and-true, proven method of supplementing your portfolio with passive income. It even allows reinvesting for ultra-long-term compounding profits. To help you find your treasured picks for this year, Joel Lim, Financial Analyst at Trading.Biz, has found what he believes are the 2 best dividend stocks to buy this year.
The two dividend stocks you want to invest in are Hercules Capital and Verizon. They offer solid dividend yields, have a reassuring performance history, and ensure a return for investors.
Hercules Capital (HTGC)
Hercules Capital is a promising Business Development Company (BDC) for dividend investors, offering a dividend yield of 8.85%. It provides capital to start-ups through diverse financing options and has maintained impressive income and returns over time.
The first attractive feature of this stock for dividend investors is that it operates as a BDC. As a result, out of all its taxable income, Hercules Capital must pay shareholders 90% as dividends annually.
However, the prospects don’t stop there. In its Q4 report released in February of this year, Hercules Capital reported a 22.4% increase in total investment income year-over-year and a 15.3% increase in assets under management.
Financial Analyst Joel Lim said, “Not only does this stock promise a hefty return by default, but it has also demonstrated impressive growth over the last few years.” With this pace, that 90% will only increase, and investors can enjoy increased passive income.
Verizon Communications (VZ)
Verizon is in ruthless telecommunications market competition with giants like T-Mobile and AT&T. While this makes it hard to stand out, Verizon manages to outperform its competitors year after year in one category: dividends.
The chart above shows Verizon’s dividend yield over the past five years, currently at 6.60%. Meanwhile, T-Mobile sits at only 1.62%, and this is by no means a new trend. Verizon has dedicated itself to raising dividends yearly for the past 17 years and has yet to miss this goal.
Investors can be fairly confident that if you buy Verizon this year, you will likely receive a higher dividend than last year, and again the following year, and so on. Joel Lim adds, “Verizon is not a dominant performer in its industry. However, its history of impressive yield year after year is unmatchable.”
There is no better stock for dividend investors to buy confidently than Verizon for an almost certain boost in passive income this year.
