Stocks to buy

Some of the best investment opportunities can still be found in this market. There happen to be a number of top income stocks to buy for those looking to combat the beat down the overall indices have seen. Indeed, dividend stocks have still been some of the best performers of 2022.

In fact, many such income-generating stocks became the new darlings of Wall Street, with investors in desperate search of reliable income. As noted by The Wall Street Journal’s Lori Ioannou, dividend stocks offer a good deal of safety during periods of chaos.

Thus, it wasn’t surprising when Institutional Investor reported: “For the year through late October, the Morningstar Dividend Yield Focus Index returned nearly 2 percent, while the Morningstar US Market index went down 19.2 percent, according to a recent Morningstar report. The gap is so big that it led the author to conclude that dividend payers ‘have proven dramatically more resilient’ than other types of equities amid the market turbulence in 2022.”

Now, as we head into 2023, I believe dividend stocks could have another solid year ahead. Not only can investors profit from potential price appreciation, they can collect solid yields along the way. Here are seven income stocks to buy now.

DLR Digital Realty $111.58
ADC Agree Realty $69.31
MPW Medical Properties $12.55
O Realty Income $64.98
NSA National Storage $40.39
KO Coca-Cola $61.32
PEP PepsiCo $178.05

Income Stocks to Buy: Digital Realty (DLR)

Source: Vitalii Vodolazskyi / Shutterstock

With a yield of 4.4%, Digital Realty (NYSE:DLR) is a real estate stock worth considering. This REIT owns, acquires, develops, and operates data centers, which is a major catalyst for the stock.

After all, by 2024, 80% of the world will be online, says the company. We could see about $10.5 trillion of online consumer spending, which could result in explosive new digital services markets. Also, by 2024, 45% of national governments will need to create national policies to safeguard information. And, by 2027, 41% of enterprise revenue will come from digital services.

Furthermore, we have to consider that some of this REIT’s top clients include IBM (NYSE:IBM), Meta Platforms (NASDAQ:META), Oracle (NYSE:ORCL), Comcast (NASDAQ:CMCSA), Verizon (NYSE:VZ), AT&T (NYSE:T) and other big-named tech companies.

Income Stocks to Buy: Agree Realty (ADC)

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With a yield of 4.2%, Agree Realty (NYSE:ADC) has been focused on the acquisition and development of properties which are net leased to industry-leading omnichannel retail tenants, such as Walmart (NYSE:WMT), Best Buy (NYSE:BBY), and Home Depot (NYSE:HD).

At the moment, this company has just under 36 million square feet of space it leases to those reliable investment-grade tenants. Better, as of September, the company acquired another 303 properties across 42 states for about $1.19 billion.

This growing property portfolio has allowed the company to recently increase its monthly dividend to 24 cents per share, which is $2.88 per share annualized. Even more impressive are its recent earnings. In its second quarter, the company posted revenue of $104.9 million, as compared to expectations of $102.3 million. It also increased its full-year acquisition guidance to a new range of $1.5 billion to $1.7 billion.

Medical Properties (MPW)

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With a yield of 9.2%, Medical Properties (NYSE:MPW) has grown to become one of the world’s largest owners of hospital real estate. This company’s portfolio includes roughly 447 facilities and 44,000 beds in 10 countries across four continents. That’s some massive size for investors looking at hospital-related real estate.

Medical Properties just authorized a $500 million buyback program, a boon for investors from a capital appreciation perspective. The company is able to pay its high yield and buy back shares at this level largely due to annual rent escalations that are tied to inflation.

According to REIT.com, “Health care REITs are viewed as a defensive investment against stock market declines,” says James Milam, associate director and lead analyst for health care REITs for Sandler O’Neill and Partners. “Demand for health care facilities is based more on need and demographics than on business cycles.”

Realty Income (O)

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With a yield of 4.6%, Realty Income (NYSE:O) is structured as a REIT. Accordingly, its monthly dividends are supported by the cash flow from over 11,400 real estate properties owned under long-term net lease agreements.

To date, the REIT has declared 629 consecutive common stock monthly dividends throughout its 53-year operating history. Recently, Realty Income increased its monthly dividend to 24.8 cents per share, or $2.98 annualized. The next distribution will be payable on Dec. 15 to shareholders of record as of Dec. 1.

Some of its tenants include Dollar General (NYSE:DG), Dollar Tree (NASDAQ:DLTR), Walmart, FedEx (NYSE:FDX), and BJ’s Wholesale Club (NYSE:BJ). In its last quarter, Realty Income posted an occupancy rate of 98.9%, which is a 10-year high for the company. In addition, all of its tenants are on long-term triple-net leases, which means the tenant is responsible for the taxes, insurance, and maintenance.

National Storage Affiliates (NSA)

Source: Kostsov / Shutterstock.com

 

Next on the list is another REIT, National Storage Affiliates (NYSE:NSA), which carries a dividend yield of 5.5%. This REIT focuses on the acquisition, ownership, and operation of self-storage centers in 42 states and Puerto Rico.

The company also just announced a dividend of 55 cents, or $2.20 annualized, which is payable on Dec. 30 to shareholders of record on Dec. 15.

In its most recent quarter, the company bought another 23 properties for about $321.8 million. It also posted net income of $40.2 million, which was down slightly year over year. The company’s earnings per share of 21 cents also missed expectations of 28 cents, but its same-store revenues were up 10.7% year-over-year. Better, Executive Chairman, Arlen Nordhagen just bought $1.4 million worth of stock for $27.59 a share. When insiders get excited about a high-yielding stock like this, it’s time to take a look.

Coca-Cola (KO)

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With strong demand, dependable dividends, and incredible earnings growth, Coca-Cola (NYSE:KO) may be of the best dividend stocks to consider as a long-term investment. Warren Buffett, who drinks about five cans of Coke a day, agrees. He once called calling Coca-Cola a “forever” stock, a term he doesn’t throw around lightly.

Impressively, Coca-Cola is also a dividend king, raising its dividend for the last 60+ years. This stock currently carries a yield of 2.9%, reflecting the company’s blue-chip status and quality.

Better, in its most recent quarter, the company posted earnings per share of 69 cents on sales of $11.1 billion. That’s up from the 65 cents on sales of $10 billion during the same quarter last year. Analysts were looking for 64 cents on sales of $10.5 billion, meaning this was a nice beat.

For the year, the company expects for revenue growth to fall in the range of 14% and 15%, which is higher than its initial forecast of 12% to 13%. Coca-Cola also raised its growth estimates on adjusted earnings per share to a new range of 6% to 7%, from 5% to 6%. Even more impressive, director Herb Allen just bought 33,200 shares for $2 million. He paid an average price of $60.18 per share.

PepsiCo (PEP)

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Another strong long-term dividend stock to consider is PepsiCo (NASDAQ:PEP), which carries a reasonable yield of 2.6%. Like Coca-Cola, the company is still seeing good demand for its beverages, including Pepsi, Mountain Dew, and Gatorade. However, the company’s food division, which includes the likes of Lay’s, Doritos, Quaker Oats, and Cheetos, is also performing very well.

This strong performance translated into excellent earnings this past quarter. The company posted adjusted earnings per share of $1.97, which topped expectations for $1.84. Sales were up to $21.9 billion, which was above estimates of $20.8 billion. And year-over-year growth was substantial, with earnings per share growth of more than 10%.

Historically, Pepsi has been among one of the strongest, most dependable stocks on the market. I don’t expect that to change anytime soon.

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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