Dividend stocks are a type of stock that are not exciting until they are. For several years, interest rates at or near zero percent, combined with rampant inflation, have made growth stocks the place to be. For many investors, they still are.
However, since 2022, the prices have been increasing, as inflation has been. And investors now expect that the Federal Reserve will likely keep interest rates at their current level for longer than expected. That increases interest in dividend stocks that offer yields above inflation and the 10-year rate.
These stocks can serve as anchors for your portfolio because they provide reliable, passive income. Investors who don’t need that money today can reinvest those shares and let the power of compounding do its job.
Investors Should Prioritize Growth and Value
That being said, many investors will look at the current stock price of some of the greats and kings and feel that the juice is not worth the squeeze. That’s because with dividend stocks, accumulation is key.
The good news is that there are still plenty of dividend stocks with stable payouts, yielding over 4%, and can be bought for less than $30 per share. These are stocks that can hold a portfolio for the long term and still offer long-term stock price growth opportunities.
AT&T Dusts Off Standard Playbook
AT&T NYSE: T has gone through many changes in the last 30 years. The wireless boom that began in the early 2000s led to the saying “this isn’t your grandma’s AT&T.” That was as the company moved from its legacy phone business into the digital future.
AT&T Today
AT&T
- 52 week interval
- $21.99
▼
$29.79
- Dividend Yield
- 4.85%
- The P/E ratio
- 7.68
- Target Value
- $30.55
Along the way, the digital future has seen AT&T move away from its core business, including its purchase of WarnerMedia. The sale of that business in 2022 forced the company to cut its dividend in half, and with it, the company lost its dividend king.
The company has softened and returned to its telecom roots. But again, business changes. AT&T’s legacy business is under pressure, and that could weigh on the company’s short-term results. However, it is investing in a software-defined, AI-ready and “open” network. This future includes its EchoStar spectrum agreement to increase wireless capacity.
AT&T believes this will give the company a long-lasting competitive advantage over time. That could lead to the company raising its payout, which hasn’t increased since the sale of WarnerMedia. That said, investors are still getting dividends with a yield of around 5% to match the safe payout ratio.
Vale Offers Investors 2 Long-Term Catalysts
Vale SA NYSE: CLOSED it offers investors the benefit of two dynamic themes. First, the Brazilian company fits the story of emerging markets. Second, the company is part of the metals and mining sector. It is a leading producer of iron ore and nickel and has significant exposure to copper. It also trades at a forward price-to-earnings (P/E) ratio of about 7x, making it a deep value candidate.
Close Today
- 52 week interval
- $8.97
▼
$17.94
- Dividend Yield
- 4.23%
- The P/E ratio
- 22.93
- Target Value
- $16.85
Skeptics have two concerns. The first is that China is Vale’s biggest customer for iron ore, a key ingredient in steel. The problem is that China is in a structurally weak steel market, and it doesn’t stop there in sight.
Critics will also note that Vale was well on his way to capping his profits as he has increased over the past five years. But the company’s payout ratio for many forward-looking metrics, such as next year’s earnings or cash flow, is well supported. Booming growth opportunities in the mining and metals sector may drive future payouts, with a dividend yield of more than 4%.
Power Transfer is a Sustainable Growth Model
Energy stocks have been fluctuating during the back-and-forth over the Strait of Hormuz. But this is the time when it is important to understand why Energy Transfer NYSE: ET should be on investors’ radars.
Power Transmission Today
Power Transfer
- 52 week interval
- $16.18
▼
$20.70
- Dividend Yield
- 7.07%
- The P/E ratio
- 15.91
- Target Value
- $23.45
The answer may simply be that the company has built a pipeline of expansion projects designed to support, and possibly grow, its distribution over the course of a decade. Energy Transfer plans to spend $5.5 billion to $5.9 billion on expansion projects in 2026 alone, supported by up to $9.5 billion in natural gas pipeline investment.
The crown jewel is the $5.6 billion Southwest Desert Pipeline, scheduled for completion in late 2029. The company also builds edge pipelines to supply AI data centers and gas-fired power plants. That’s a catalyst for demand that wasn’t there a few years ago.
With the projects scheduled to enter commercial service in early 2030, Energy Transfer has enough growth to support its stated plan to increase its distribution by 3% to 5% annually. That comes on top of yields that already sit above 7%.
Before you consider AT&T, you’ll want to hear this.
MarketBeat tracks Wall Street’s top and most effective research analysts and the stocks they recommend to their clients every day. MarketBeat identified five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and AT&T wasn’t on the list.
Although AT&T currently has an Average Buy rating among analysts, top analysts believe these five stocks are the best.
View Five Stocks Here
Learn the basics of option trading and how to use them to improve returns and manage risk with this free report from MarketBeat. Click the link below to get your free copy.
Get This Free Report
