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3 High-Dividend Stocks to Buy for Steady Income

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Too many investors look for the quick buck and buy risky investments like penny stocks. Slow and steady investing is the better strategy. To that end, dividend investing has proved over decades it is the superior way to build a retirement portfolio.

Yet what if you could combine the two strategies? Buy dividend stocks, but seek out those with high yields to help juice long-term results. It could be a winning combination.

Certainly caution is still warranted. Risk and yield tend to go hand in hand, so investors need to scrutinize high-yield dividend stocks more diligently. Still, the following three high-yield candidates look ripe for the picking. With yields ranging from 4.2% to 8.9%, investors can reap the best of both worlds.

Amcor (AMCR)

green beer bottles in a factory line, ready to be sealed. represents packaging companie

Source: shutterstock.com/zedspider

Packaging specialist Amcor (NASDAQ:AMCR) is a dividend stock that flies under the radar of most investors. It’s not a glamorous tech stock, but is more mundane.

Amcor makes rigid and flexible packaging for food, beverages, pharmaceuticals and personal care products. Like most businesses, it has been hit by the impact of inflation. Even though down from its highs, inflation continues to gnaw away at consumers. That has an impact on Amcor, too. It continues to see lower volumes even as organic comparable sales climb. Coffee and protein were especially hard hit.

The one bright spot is pharmaceuticals. Even though it’s still growing,  it’s at lower rates than previously experienced. Amcor is responding by taking pricing actions and containing costs. It also maintains a long-term outlook for opportunistic acquisitions. In May Amcor announced it was acquiring Moda, a protein packaging systems manufacturer.

The dividend stock is down 16% in 2023 as it has cut its full-year outlook. That has its dividend yielding 4.9% annually. Amcor has increased its payout for 40 consecutive years, making it part of the Dividend Aristocrats. 

Amcor has been through these ups and downs before. It remains on track for recovery and growth well into the future. The stock trading at 15 times earnings and a fraction of its sales. For investors looking for steady income stocks, Amcor is one to choose.

Digital Realty Trust (DLR)

A hallway with server racks on either side in a data center

Source: dotshock / Shutterstock

Since May, shares of Digital Realty Trust (NYSE:DLR), a cloud computing real estate investment trust (REIT), have gained 19%. I think the stock still has more room to run.

Digital Realty Trust is the premier data center REIT. It capitalizes on the long term growth trend of cloud computing. It owns 314 data centers across 28 countries and boasts 38.8 million square feet of rentable space. Artificial intelligence is going to cause the demand for cloud-based infrastructure to accelerate.

The REIT just announced a joint venture with private equity firm GI Partners. Digital Realty will get a $745 million cash infusion in exchange for a 65% interest in two hyperscale data centers. There is an option for GI Partners to buy into a third data center, too.

The deal also further stabilizes Digital Realty’s dividend that currently yields 4.2% annually. Compared to rivals like Equinix (NASDAQ:EQIX), the REIT’s payout ratio of 78% was nearly twice as high. That called into question Digital Realty’s ability to continue its 17-year record of annually increasing its dividend. Now the REIT is on much firmer financial footing. When it comes to dividend investing DLR appears to be a solid choice.

Innovative Industrial Properties (IIPR)

A close-up shot of a marijuana growhouse.

Source: Shutterstock

I’m not an investor typically enamored with marijuana stocks. Especially when considering the long-term nature of dividend investing. The path of “legalize and regulate” has created too many roadblocks to make for profitable growth for many companies. But, it appears that Innovative Industrial Properties (NASDAQ:IIPR) is different.

Another REIT, it was the  first to own, manage and lease cultivation and processing properties for the medical marijuana industry. It currently owns 108 properties across 19 states, equal to some 8.9 million square feet. All of them are leased to state-licensed marijuana growers. The entire portfolio is leased on a triple-net basis. That means the tenants, not the REIT, pays for insurance, taxes, structural repairs and maintenance.

That makes Innovative Industrial a low overhead, low cost business. It has only 21 full-time employees. It also gives the REIT very predictable cash flows.

It’s true the high regulatory hurdles for the industry have caused the REIT to see delinquencies grow. Rent collection had slipped to 94% after applying security deposits at the end of last year. By March, though, that had rebounded to 98%.

Innovative Industrial held its IPO in 2016. Since then its dividend has grown from 15 cents per share to $1.80 per share, an 1,100% increase. The distribution currently yields 8.9% annually.

On the date of publication, Rich Duprey held a LONG position in AMCR stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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