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These are the advantages of dividend stocks!

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dividend stocks alliance (WKN: 840400) and from W. P. Carey (NASDAQ:AAPL) offers income investors a dividend yield of more than 5% right now. However, that is not the only thing they have in common, although the operational overlaps are quite limited. No, both distribution actions have their individual merits.

Which are? Today we want to take a closer look at that. WP Carey and Allianz shares have their tricks aside from a 5% dividend yield, which even play into a direct comparison.

WP Carey: Defensive-Class Inflation-Protected Dividend Stocks

As a dividend stock, WP Carey possesses two stable traits that may appeal to investors right now. Which is why I don’t even tell the story, but accept it as known. Since 1998, the Real Estate Investment Trust has been paying investors consistently with annual growth.

But let’s move on to the advantages of the REIT: A first advantage is the defensive class. With nearly 1,300 different properties divided into many segments, quality and breadth are not an issue. The dividend is stably based on many different rental incomes. This is a foundation that offers reliability and the opportunity for steady, moderate growth through acquisition.

That’s not all, either: In addition to stability, WP Carey can compensate for inflation. The Real Estate Investment Trust has long-term lease agreements that include a periodic annual rent increase clause. Or it even has an inflation adjustment as part of it, which affects about half of the leases. This can offset inflation. With this dividend stock, the inflation hedge doesn’t just work because of the real estate that stores value. No, but also operationally, as far as the base is concerned.

Allianz share: growth ratio and distribution

As a dividend stock, Allianz shares have two other merits. The business model is not as stable as that of an insurer and is always accompanied by a bit of uncertainty. Here too we can say that the DAX insurer performed strongly during the pandemic. The first benefit, however, is strong dividend growth.

Allianz share management is increasing the dividend by more than 12% this year, which is extraordinary growth. Dividend growth should be at least 5% per year for the next several years. Without a doubt, an interesting and sometimes risky payment policy. Operating growth of the same amount should support this growth course.

On an adjusted basis, Allianz’s payout ratio is actually less than 55%. Even when not adjusted, the value is definitely very sustainable at 67.7%. Foolish investors looking for dividend stocks with a dividend yield of more than 5% can also focus on these merits.

Overall, WP Carey offers a lot in combination: defensive class, dividend growth, and stability. Coupled with a dividend yield of over 5%, that’s at least a superficial similarity.

Article Allianz & WP Carey Have a 5% Dividend Yield: These Are the Advantages of Dividend Stocks! first appeared in The Motley Fool Germany.

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Vincent owns shares in Allianz and WP Carey. The Motley Fool does not own any of the shares mentioned.

Motley Fool Germany 2022

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