Inflation has been on everyone’s mind for months now — and for a good reason. The most recent measure of inflation, the consumer price index, came in at 8.5% for March, marking the 10th consecutive month that inflation is above 5%.
One good source of investment returns during inflationary periods is dividend stocks. According to Fidelity, dividend stocks have accounted for 30% of the S&P 500‘s returns since 1930. During the inflationary decades of the 1940s and 1970s, dividend stocks accounted for an even higher share of the market’s total returns — 65% and 71%, respectively.
Four dividend stocks you can buy today are Owl Rock Capital Corp. ( ORCC 0.53% ), B. Riley Financial ( RILY -0.75% ), Prudential Financial ( PRU 0.81% ), and ExxonMobil ( XOM 1.18% ). If you were to invest $63,000 split between these four stocks, or $15,750 per stock, you could net over $10,000 in dividend income over the next three years.
1. Owl Rock Capital Corporation: $3,865 in passive income after three years
Owl Rock Capital has a high dividend yield, delivering investors 8.18% annually. Its yield is so high because it is a Business Development Corporation (BDC). A BDC is a company that lends to or buys equity in private businesses in the United States. BDCs have similar tax rules as real estate investment trusts (REITs), which require the company to payout at least 90% of its taxable income in the form of dividends. As a result, these types of stocks tend to produce high dividend yields.
Owl Rock Capital provides loans to middle-market companies — a market that it sees as an underserved market. It lends to companies with earnings before interest, taxes, depreciation, and amortization (EBITDA) of $10 million to $250 million and annual revenues of $50 million to $2.5 billion.
Owl Rock Capital sees how institutional investors primarily make loans to the biggest companies in the U.S. because of liquidity requirements that can constrain who they invest in. As a…
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