When it comes to investing for passive income, dividend-paying stocks are a popular choice for many investors. With hundreds of companies offering dividends, it can be easy to overlook some potentially lucrative opportunities. Two such high-yielding dividend stocks that often fly under the radar are MPLX and Omega Healthcare Investors.
MPLX, a master limited partnership (MLP), may not be as well-known as some of its peers like Energy Transfer and Enterprise Products Partners, but it offers a compelling investment opportunity. With a distribution yield of 7.8%, MPLX boasts a higher yield compared to its competitors. While its distribution coverage ratio is lower, indicating a higher risk, the company has been experiencing rapid growth in recent years. MPLX has been consistently increasing its distribution, with a 12.5% increase most recently. This growth is supported by upcoming pipeline expansions and natural gas processing plant constructions, as well as the potential for accretive acquisitions in the future.
On the other hand, Omega Healthcare Investors, a healthcare real estate investment trust (REIT), offers a dividend yield of 6.7%. While the company has not increased its dividend since 2019, it has delivered a compound annual dividend growth rate of 7.1% since going public in 2003. Omega Healthcare invests in skilled nursing and assisted living facilities, leasing them back to healthcare companies under long-term agreements. The REIT also invests in real estate loans backed by healthcare properties, generating stable rental and interest income to support its high-yielding dividend. Despite a high dividend payout ratio of 95%, Omega Healthcare’s cash flow per share is on the rise, indicating the potential for future dividend increases.
Both MPLX and Omega Healthcare Investors present enticing options for income-seeking investors. With their high dividend yields and growth potential, these stocks could provide investors with the opportunity to generate more passive income compared to similar investments. While MPLX offers a higher yield and robust growth prospects, Omega Healthcare Investors provide stability and consistent dividend growth over the long term.
In conclusion, for investors looking to build a portfolio focused on passive income, MPLX and Omega Healthcare Investors are two dividend stocks worth considering. By diversifying their investment portfolio with these high-yielding options, investors can potentially enhance their income generation and build a more resilient investment strategy for the future.
