The S&P 500 may no longer be in correction territory, but there are still some attractive opportunities for long-term investors, especially when it comes to dividend stocks. Thanks to persistently high interest rates and low expectations for continued rate cuts in the near term, some excellent high-dividend stocks are trading for attractive valuations right now.
With that in mind, here are three stocks, all of which have dividend yields over 4%, that could be worth a closer look right now.
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I've called Realty Income (NYSE: O) the best overall dividend stock in the market, and it is one of the largest stock investments in my own portfolio.
Realty Income is one of the largest real estate investment trusts, or REITs, in the market. It owns about 15,600 properties in the U.S. and Europe, most of which are occupied by retail tenants that operate recession-resistant businesses.
Dollar stores, warehouse clubs, grocery stores, and shipping businesses are among the top tenant types, just to name a few examples. Tenants sign long-term leases that require them to pay taxes, insurance, and most maintenance expenses.
Since going public in 1994, Realty Income has generated a 13.4% annualized total return, handily outpacing the S&P 500. It has also raised its dividend for 110 consecutive quarters, illustrating the power of its steady and predictably growing rental income stream.
Realty Income is down by about 15% from its 52-week high and about 33% from its all-time high, but this is mainly because of how rate-sensitive this steady compounder is, not because of anything wrong with the business itself.
Conversely, it could also be a big winner as rates (hopefully) fall over the next few years. And with a 5.8% dividend yield, now could be a great time to buy shares.
Vici Properties (NYSE: VICI) is also a REIT, but it is more specialized. Often known as the "gaming REIT," Vici (pronounced vee-chee) is the largest owner of casino real estate in the United States.
It owns some of the most iconic properties on the Las Vegas Strip, including Caesars Palace, The Venetian, and MGM Grand, as well as an excellent portfolio of regional gaming assets.
With a stock price that is just 8% below its all-time high, Vici isn't nearly as beaten down as the other two stocks discussed here. But there are good reasons for this.
For one thing, the company has only been public since 2018 and has already established a solid record of value-adding dealmaking. It acquired its largest rival, MGM Growth Properties, in 2021, as well as the Venetian, and FFO per share (funds from operations, the real estate equivalent of earnings) went up significantly both times.
Its average lease has more than 40 years remaining, and more than 90% of its rent roll is inflation-protected. Because of its size and balance sheet strength, Vici has been taking advantage of the high-interest environment by making construction loan investments, thereby finding ways to grow revenue even in a tough climate.
At the current price, this excellent REIT trades for less than 14 times its 2025 FFO guidance and has a 5.5% dividend yield that is well covered by the company's cash flow.
SiriusXM Holdings (NASDAQ: SIRI) hasn't exactly been a strong performer recently, with shares down by nearly 60% in 2024. And to be fair, there are some good reasons. Revenue has essentially been flat for the past few years, and the subscriber base reached an all-time high in 2019 and is significantly smaller now than it was then.
However, management is making smart moves to boost profitability and return the company to growth. It has signed deals with major podcasters and has taken other steps to build out its exclusive content.
And it is using new initiatives, such as a dealer-sold three-year subscription available with new vehicles, as well as a free ad-supported version of SiriusXM in some new cars. Management is targeting 10 million net new subscribers over the next few years and $1.5 billion in annual free cash flow by 2027, about 30% more than it expects in 2025.
It's fair to say that the market isn't sold on Sirius' turnaround potential. The stock trades for less than eight times forward earnings. But this highly profitable business, which has a 4.5% dividend yield, could be a home run for patient investors if its management is successful.
If you're looking for a great combination of growth and income, and you measure your investment returns in years, not weeks or months, these three stocks could be excellent additions to your portfolio.
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Matt Frankel has positions in Realty Income, Sirius XM, and Vici Properties. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.