Legendary investor Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.”
His words seem more pertinent now when even high-income Americans are losing sleep over the state of the economy and the rising cost of living.
Up to 87% of Americans claim to have lost sleep because of economic anxiety, according to a survey commissioned by the American Academy of Sleep Medicine. Nearly 20% of respondents said they “almost or almost always” lose sleep over concerns about money.
Read more: High-yield savings account vs. CD: Which is right for you?
The pressure is ramping up. Building a stream of reliable passive income could be one of the few ways to escape the rat race. Here are three income-generating stocks – call them “forever assets” – that offer a dividend yield of up to 7.4%.
Telecommunications giant AT&T (NYSE:T) is on this list because the need for broadband and wireless data is rock-solid. The company has significant market share in America, which gives it clear economies of scale. And given its investments in 5G and fiber optics, the company stands to benefit from the Biden Administration’s new $42 billion plan to make internet access universal in every U.S. state and territory by 2030 under the Broadband Equity Access and Deployment Program.
AT&T expects to generate over $16 billion in free cash flow this year, which would help underwrite the firm’s hefty 7.4% dividend yield, which is far higher than that of most blue chip stocks at the moment.
Read more: Worried about the economy? Here are the best shock-proof assets for your portfolio. (They’re all outside of the stock market.)
North America’s energy infrastructure is another timeless asset. Canadian firm Enbridge (NYSE:ENB) operates the largest network of oil and natural gas pipelines across the continent. In recent months the company has announced plans to expand its network as demand for energy rebounds and North American energy producers ramp up exports to Europe.
The fact that Enrbidge derives its value from hard assets and infrastructure makes it a more reliable stock than energy producers and refiners. Enbridge has ramped up its dividend every year for 28 consecutive years.
The stock currently trades at a price-to-earnings ratio of 42 with a 7.2% dividend yield.
Pharmaceutical giant Pfizer (NYSE:PFE) saw sales jump as the world tackled the COVID-19 pandemic. But pandemic sales are now receding and investors have retreated from Pfizer’s stock, which is down around 30% year to date.
Meanwhile, the firm’s revenue was down 29% year over year in the first quarter of 2023.
But the underlying business is still robust. Pfizer has a vast portfolio of lucrative drugs and many more in the pipeline. The stock may be undervalued at the moment, trading at just seven times earnings and the dividend yield is 4.4%.
Investors seeking a contrarian bet should consider adding Pfizer to their watch list.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.