Millionaire investors looking for income stocks to buy have a different problem than other market participants. They must strike a balance between preserving the capital of their portfolio and generating income on capital. 2022 is an exceptional year to meet these two requirements. Bonds and stocks have fallen this year. Since all picks have a good value score, those with high growth offer a bonus to investors. Chances are that companies that increase their free cash flow will steadily increase the payout of dividends in the years to come.
|BMO||Bank of Montreal||$97.37|
|CM||Canadian Imperial Bank||$43.13|
|O||Real estate income||$62.26|
Income stocks to buy: Altria Group (MO)
In her third trimester, Altria Group (NYSE:MO) posted non-GAAP earnings per share of $1.28. Its turnover fell slightly by 2.2% to 5.41 billion dollars. Altria also cut its growth forecast to a range of 4.5% to 6% compared to last year. The conservative advice appealed to investors. It gives management the flexibility to react to adverse market conditions ahead.
More importantly, the company has healthy growth to support a steady increase in its dividend. MO stock pays a dividend of $3.76, which yields nearly 8%. Altria brings new products to the e-steam market. Adult smokers can switch to a healthier alternative. They can fulfill their wants and needs as government regulators add new restrictions to the tobacco industry. Investor concerns over Altria’s ownership of Juul are dissipating. Shareholders are comfortable with the company navigating regulatory bodies in the heated tobacco space.
Income stocks to buy: Bank of Montreal (BMO)
Bank of Montreal (NYSE:BMO) rebounded to around $100, even after posting lower earnings. The Canadian bank also raised its dividend by 3% to 1.43 CAD. BMO’s business customers are holding up well in the lending segment. They have a solid financial base. Chief executive Dave Casper said the bank would see demand fall slightly as the economy weakens. This could last until the new year. As the economy enters a period of recession, BMO is in a strong position. It has seen strong loan growth in 2022.
The bank acquired more customers and enjoyed a strong increase in business. Investors should expect BMO’s asset-based lending in the auto dealer market to remain strong. The company manages its risks well. For example, he closely monitors his client’s risk exposure. He is also selective with the clients he accepts.
Income Stocks to Buy: Best Buy (BBY)
Opponents who thought that best buy (NYSE:BBY) offered consumers a showroom to Amazon.co.uk (NASDAQ:AMZN) missed BBY’s stock gains. Year-to-date, AMZN stock is down nearly 45%, while BBY stock is down about 15%. Still, Best Buy pays a dividend that yields around 4%.
In the third quarter, the distributor recorded comparable sales down 10.4%. Despite the slowdown, he expects non-GAAP operating profit for the full year to top 4%. Best Buy has healthy cash flow, enough to resume its billion-dollar stock buyback. Best Buy expects this holiday season to be different from last year. CFO Matt Bilunas said consumers are buying less at the start of the year.
Fortunately, November sales are similar to historic levels. Shareholders should expect healthy demand for televisions. Additionally, virtual reality is a potentially popular element this year. Gambling is an exciting form of entertainment for people. Best Buy offers these customers the opportunity to explore these products.
Income stocks to buy: Blackstone (BX)
black stone (NYSE:Bx) recently liquidated its stake in MGM Grand and Mandalay Bay Resort. VICI properties (NYSE:VICI) will purchase the 49.9% stake. Blackstone will pocket more than 700 million dollars, earned in less than three years. The sale strengthens the liquidity of the Blackstone Real Estate Investment Trust. On December 2, investors became increasingly concerned about Blackstone’s restriction on takeovers.
The firm limits redemptions to just 0.3% in December. Investors in BREIT requested redemptions of $1.8 billion in October, or 2.7% of net asset value. Investors can only speculate that Asian holders are withdrawing their holdings. Investors in Asia face a credit and housing bubble. Blackstone has enough cash to control asset buybacks. The value of his real estate portfolio should not change much. This will attract income investors to BX shares, whose dividend yields 5.8%.
Canadian Imperial Bank (CM)
Canadian Imperial Bank (NYSE:CM) shares fell about 7% after reporting fourth-quarter results. Revenue grew 6.5% year-over-year to C$5.39 billion. However, the provision for credit losses amounted to CAD 436 million. That’s a 459% increase over last year. CIBC said that although PCL is higher, its balance sheet remains strong. It will strengthen its activity by focusing on a disciplined deployment of resources. With a CET1 ratio of 11.7%, CIBC can generate internal capital through its exposure to growth in risk-weighted assets.
The bank’s expenses are growing in the mid-single digit percentage. From 2023 to 2025, CIBC is confident it can grow its bottom line and provide positive operating leverage. For example, he has the opportunity to strengthen his income by increasing the fees. In the mortgage sector, the bank deepened its relationships with 92% of its customers. In the commercial lending market, CIBC expects growth in its US segment.
Devon Energy (DVN)
Devon Energy (NYSE:NDV) is one of the best energy companies to own. The company reported revenue growth of 56.5% year-over-year to $5.43 billion in the third quarter. This creates strong momentum for the fourth quarter, exceeding market expectations. CEO Rick Muncrief is targeting cautious growth in the range of 0% to 5% in the fourth quarter. There is a good chance that the company will exceed this goal. It is a multi-basin operator which is testing new areas. This will result in higher operating income over the next few years. DVN stock pays a dividend of $5.17, which yields 7.55%.
Devon could increase its dividend after entering into opportunistic transactions that strengthen its cash position. It is unlikely to overpay for assets, which protects investors from excessive risk. In 2023, Devon will benefit from an increase in the number of well spuds. In addition, its acquisition activities will add significantly to the results. High oil prices will increase Devon’s free cash flow. To offset the tax hike, it has a net operating loss carryforward of about $1 billion.
Property income (O)
Real estate income (NYSE:O) currently has a dividend yield of 4.73%. With its premium assets, the grocery segment moved the most. Conversely, in Realty Income’s higher yielding assets, the cap rate moved less. Fortunately, the company has a good relationship with its customers. This results in reactive management of the cost of capital.
On the industrial side, capitalization rates are changing significantly. For example, Amazon is canceling plans to take industrial assets. Fortunately, Realty Income has a diversified portfolio of assets to minimize shareholder risk. In order to broaden its sector exposure, the company finalized the acquisition of Encore Boston Harbor. This marks Realty’s first property in the gaming industry. Investors should expect management’s historically strong performance to sustain its dividend growth.
As of the date of publication, Chris Lau had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.