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Thousands of dividend stocks are trading on the market, and choosing specific stocks can be extremely overwhelming for beginner investors looking to generate a stable income. One way to know what’s working is to read success stories of dividend investors who started small and achieved success with patience and hard work.
About three years ago, a Redditor shared his success story in r/Dividends (now a community of 593,000 members) about how he “threw probably most of my savings” into dividend growth stocks and eventually reached a portfolio earning $13,470 per year.
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The Redditor said that before taking dividend investing seriously, he used to invest in growth stocks like Apple and wait for a few months, only to lose patience and sell them at a lower price.
“Because of this, I convinced myself that the only people that made money in the stock market were day traders,” the investor said.
However, once he decided to invest in dividend stocks for long-term gains, he kept putting small sums of money into these stocks, even during difficult times. The journey was far from smooth (remember, this experience was shared back in June 2021, when the market was still reeling from the pandemic effect).
“In 2020, March through May was obviously a hard set of months. My income went way down, but every penny I could get a hold of I used to buy the dip. Summer of 2020 when my income started going back up, I used some of that money to buy growth stocks. It was a distraction from my overall strategy of dividend stocks, but it certainly helped me grow my money quickly. This last year has been unlike any other, so I don’t really recommend buying growth/tech stocks the same way I did last year. I’ve since sold those things to put back into my dividend portfolio,” he added.
The investor said that he was generating $13,470 per year on about $350,000 invested, meaning the net yield of his portfolio (with 69 stocks in total) was about 3.84%.
He shared his entire stock portfolio with fellow Redditors. Here are the top 12 biggest holdings in his portfolio.
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AvalonBay Communities
Virginia-based REIT AvalonBay Communities Inc (NYSE:AVB) was among the Redditor’s biggest holdings, earning about $13,000 per year in dividends. The stock is up about 18% so far this year.
Realty Income
It’s rare to find an impressive dividend income portfolio success story on Reddit without Realty Income Corp (NYSE:O) in it. The monthly dividend REIT yields about 5% and has an impressive track record of raising its payout for 30 straight years. Analysts believe Realty Income Corp (NYSE:O) is positioned well to benefit from interest rate cuts as its tenants, mostly retailers, are expected to see higher foot traffic in the coming weeks and months.
Exxon Mobil
Oil giant ExxonMobil Corp (NYSE:XOM) has raised its dividends for about four decades without a break. The stock has a dividend yield of over 3.1%. XOM gained about 17% this year.
Enterprise Products Partners
Midstream energy company Enterprise Products Partners LP (NYSE:EPD) has a dividend yield of about 7% and 26 consecutive years of dividend increases. The stock has gained about 10% so far this year.
Chevron
Chevron Corp (NYSE:CVX) is one of the top high-yield dividend growth stocks in the Redditor’s portfolio. Chevron yields about 4.3%, and the company has raised its payouts for about 36 consecutive years. Chevron recently partnered with Honeywell to use AI-assisted technologies to improve oil refining.
Pembina Pipeline
Pembina Pipeline Corp (NYSE:PBA) is a Canadian midstream energy company. The stock has a dividend yield of about 5%. In August, the company declared a quarterly dividend of CAD 0.69 per share, payable on September 27.
Altria Group
Despite concerns about the declining use of traditional tobacco products, Altria Group Inc (NYSE:MO) has been among the top favorite high-yield dividend stock picks of income investors on Reddit. The company has raised its dividends for over five decades, and the stock yields a whopping 8%.
Franklin Resources
Financial services company Franklin Resources Inc (NYSE:BEN) was among the highest-yielding dividend stocks in the $13,000 income portfolio. The stock yields about 6%, and the company has raised its payouts without a break for over four decades.
Main Street Capital
Main Street Capital Corp (NYSE:MAIN) is a business development company that has never reduced its dividends since 2007. It’s a monthly dividend stock that yields over 2%.
Verizon Communications
Telecom giant Verizon Communications Inc (NYSE:VZ) has a dividend yield of about 5.9%, and the company has raised its payouts for 18 years in a row. Goldman Sachs recently said it expects Verizon to deliver strong results in the upcoming quarterly report amid wireless execution. However, the firm said lower-than-expected phone net additions could create a headwind for the stock through the end of the year.
Genuine Parts
Auto parts company Genuine Parts Co (NYSE:GPC) has a dividend yield of about 2.9% and a track record of 67 consecutive years of dividend hikes. Genuine Parts was among the Redditor’s biggest holdings, contributing to his $13,000 in annual dividends.
Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
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This article Investor Who Spent All His Savings to Buy Dividend Stocks and Makes $13,000 Per Year Shares His Portfolio: Top 11 Stocks originally appeared on Benzinga.com
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