Passive income is a dream for many investors, but with the right strategy and investment choices, it can become a reality. Two dividend stocks that stand out as solid options for generating consistent cash payments are Waste Management and AT&T. Let’s take a closer look at why these companies are worth considering for building a stream of passive income.
Waste Management is a leading provider of waste management services in North America, making it a reliable dividend stock for investors seeking stability. The company’s core business of trash collection and recycling services is essential and recession-resistant, ensuring a steady flow of revenue even during economic downturns. With a strong network of landfills and transfer stations, Waste Management has a competitive advantage that protects its profits and reduces risks for shareholders.
In addition to its core operations, Waste Management pursues growth through strategic acquisitions. The recent acquisition of Stericycle, a leading provider of medical waste disposal services, is expected to boost the company’s cash flow generation in the coming years. This growth strategy, combined with the company’s 22-year streak of dividend increases, makes Waste Management a solid choice for passive income investors. Currently, the stock offers a dividend yield of 1.5%.
Moving on to AT&T, the telecommunications giant is a favorite among dividend-focused investors for its generous yield of 4.5%. AT&T’s bundled wireless and broadband internet services give it a competitive edge in the market, attracting customers who value simplicity and cost-savings. The company’s strong performance in gaining postpaid phone and fiber internet subscribers indicates its ability to drive growth and cash generation.
AT&T’s management is focused on rewarding investors with a significant amount of dividends and share repurchases over the next three years, supported by the company’s projected increase in free cash flow. Additionally, AT&T’s debt-reduction efforts are expected to strengthen its balance sheet and lower financing costs, ultimately boosting profits in the long run. With the stock trading at a reasonable valuation of less than 11 times projected free cash flow in 2025, AT&T presents an attractive opportunity for investors looking to build a stream of passive income.
In conclusion, Waste Management and AT&T are two dividend stocks that offer the potential for consistent cash payments and long-term growth. By investing in these companies, investors can build a portfolio of passive income streams that could provide financial security for years to come. Consider adding these rock-solid dividend stocks to your investment account and start reaping the rewards of passive income.
