Dividend Opportunities Emerge Amid Stock Market Sell-Offs

Dividend Opportunities Emerge Amid Stock Market Sell-Offs. Investors may find attractive dividends in Realty Income and Brookfield Infrastructure as their stock prices have slipped significantly.

Date: 19-03-2025

AI Rating: 7

Current Market Overview

The recent sell-off in the stock market has present unique advantages for dividend investors. As prices for high-quality dividend stocks decline, the yields on these dividends increase, providing an appealing income stream for new investors.

Realty Income

Realty Income (NYSE: O) has experienced a decline of more than 12% from its 52-week high, resulting in an attractive dividend yield of 5.7%. The company reported generating $4.19 per share of adjusted funds from operations (FFO) last year, and its stock is currently trading at about 13.5 times its FFO. This is markedly lower than its peers, who trade at over 15 times their FFO, making Realty Income appear cheap relative to its market segment.

Additionally, Realty Income has a solid track record for paying dividends, increasing its payout 130 times over its three decades of operation. With 30 consecutive years of increases and a 4.3% compound annual growth rate, the company is expected to maintain its dividend growth, supported by its strong financial profile and bond ratings.

Brookfield Infrastructure

Brookfield Infrastructure (NYSE: BIPC), on the other hand, has seen its stock drop by more than 21%, which has driven its dividend yield up to 4.9%. The company has maintained a consistent dividend growth rate of 9% annually since its inception and targets a future growth of 5% to 9% on its dividends. They also forecast over 10% annual growth in FFO per share due to investments in infrastructure, capital projects, and inflation-driven rate increases.

With Brookfield's stock trading at slightly more than 11 times its FFO per share, it remains relatively undervalued in the current investment environment, especially when compared to the average S&P 500 stock, which trades at over 20 times earnings.

Conclusion

Both Realty Income and Brookfield Infrastructure are positioned to offer attractive investment opportunities due to their rising dividend yields and the expectation of continued growth in their dividend payments. They could potentially deliver strong total returns for long-term investors and may be worth considering during this market dip.

Stocks: O BIPC BIP