Stocks to buy

Income Oasis: 3 Dividend Stocks to Quench Your Cash Thirst

Are you looking for extra cash flow? While you can use rental properties to make extra money, these investments require more time and capital. Investors seeking an easier path to high yields and growth may want to focus on dividend stocks instead.

These corporations regularly give out dividends to their shareholders. You can use these payments to assist with living expenses while the underlying investment grows. It’s also possible to reinvest the dividend to increase your cash flow in the future. Dividend reinvestments are a great idea when you are still far from retirement.

However, you have to pick the right stocks to accumulate cash flow. These are some of the dividend stocks that can give you extra cash and upside.

Stag Industrial (STAG)

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You don’t have to own real estate to profit from it. Stag Industrial (NYSE:STAG) is a real estate investment trust that acquires warehouses and storage facilities. The company generates steady cash flow from its tenants and has a vast footprint of 112.3 million square feet in 41 states.

Stag Industrial isn’t the type of stock to outperform the market. However, it’s a stable pick, with price targets ranging from $34-$45 per share. Stag Industrial also doesn’t raise its dividends much but makes monthly payouts. Those consistent payouts can make it easier to cover living expenses without selling shares during your retirement years. The current dividend per share is $0.1233 per month.

Stag Industrial closed the fourth quarter with increases in net income per share and funds from operations per share. Revenue increased by 7.6% year-over-year to reach $183.3 million. Stag Industrial is a pick for investors who don’t want as much drama within their portfolios.

Badger Meter (BMI)

A magnifying glass zooms in on the website for Badger Meter Inc (BMI).

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Badger Meter (NYSE:BMI) is a water technology and solutions company that helps companies measure water flow, quality, and other system parameters. The company assists with the sustainable use and protection of the world’s most valuable resource. This distinction has helped Badger Meter silently outperform many stocks while generating cash flow.

Shares in this under-the-radar $4.5 billion company have gained 32% over the past year and are up by 157% over the past five years. Although the company only has a 0.70% dividend yield, growth is happening quickly.

The firm has been raising its dividend by 10% or more over the past several years. Last year, Badger Meter hiked its quarterly dividend from $0.225 per share to $0.27 per share, marking a 20% year-over-year increase. A 40% year-over-year increase in diluted EPS in Q4 2023 supports this dividend bump. Revenue increased by 24% year-over-year, fueled by software sales that increased by 27% year-over-year.

Main Street Capital (MAIN)

A concept image for venture capital private investing with a man walking up blocks.

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Main Street Capital (NYSE:MAIN) offers a high yield and monthly payouts. You can get a 6.35% dividend yield at the current price. Shares trade at a 9 P/E ratio and are up by 14% over the past year.

The business development company lends money to small and medium-sized businesses. Main Street Capital prioritizes clients with revenues between $10 million and $150 million and EBITDA ranging from $3 million to $20 million.

Main Street Capital has its capital spread across dozens of industries. The “Internet Software & Services” is the largest segment and consists of 8% of Main Street Capital’s portfolio. “Machinery” is the second largest segment, making up 7% of the firm’s total portfolio.

The stock has presented the winning formula for investors who want high yields and monthly payouts. However, don’t expect this stock to outperform the stock market. That’s not the purpose of a stock like Main Street Capital.

On the date of publication, Marc Guberti did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

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