When it comes to securing a stream of passive income to support your retirement dreams, there are various options to consider. While buying rental properties is a popular choice, it comes with day-to-day responsibilities that may not be appealing to most retirees. If you’re looking for a truly passive income stream, investing in dividend-paying stocks could be a more attractive alternative. Companies like Pfizer, PennantPark Floating Rate Capital, and Ares Capital offer high yields that can provide you with a steady source of income over the long term.
1. Pfizer:
Pfizer is a leading pharmaceutical company that has been in the business for many years. With a track record of consistently raising its dividend payout for 15 consecutive years, Pfizer offers a 6.7% yield at recent prices. While the company faced challenges in 2023 due to declining COVID-19 product sales, it has been investing in new revenue streams to drive growth. With the approval of nine new drugs in 2023 and a strong development pipeline, Pfizer is well-positioned to continue increasing its dividend payout in the coming years.
2. PennantPark Floating Rate Capital:
PennantPark Floating Rate Capital is a business development company that lends to mid-sized businesses. With an average yield on debt investments of 11.5% at the end of September, this BDC offers an 11.1% yield at recent prices. The company has a strong track record of maintaining its dividend payout since it started paying dividends in 2011. With a low percentage of non-accrual status in its portfolio, PennantPark Floating Rate Capital is a reliable option for investors seeking a high-yield income stream.
3. Ares Capital:
Ares Capital is the largest publicly traded BDC with a portfolio more than 13 times larger than PennantPark’s. Offering an 8.7% yield at recent prices, Ares Capital has an experienced underwriting team that has delivered consistent results over the years. With just 1.3% of its portfolio on non-accrual status at the end of September, Ares Capital is a safe investment option for those concerned about the U.S. economy. The company has a cumulative net realized loss rate of 0% on investments over the past two decades, making it a reliable choice for long-term investors.
In conclusion, investing in dividend-paying stocks like Pfizer, PennantPark Floating Rate Capital, and Ares Capital can provide you with a passive income stream to support your retirement goals. With high yields and strong track records of dividend growth, these companies offer a stable source of income that can help you achieve financial security in your retirement years. Consider adding these stocks to your portfolio for a diversified investment strategy that can generate consistent returns over time.
