Investing $100 into a stock won't likely lead to significant wealth in the future. But if you routinely make purchases of $100, then over time, you can build up a sizable position in a company and start to see your portfolio balance expand significantly. The key is finding good, safe stocks where you can make the most of any kind of investment.
Three stocks that are currently priced below $100 and also pay high dividends are Comcast (NASDAQ: CMCSA), Enbridge (NYSE: ENB), and Realty Income (NYSE: O). These are all examples of fairly safe investments to hold in your portfolio that can provide you with a steady stream of recurring income.
1. Comcast
Telecom company Comcast is trading at around $41 per share, as its valuation has declined by 7% this year. Investors haven't been all that excited about telecom stocks due to rising interest rates and the nature of their capital-intensive operations.
But Comcast has a robust and diverse business that dividend investors can safely invest in for the long term. The company has been growing its Peacock streaming service, which gives the business a new way to generate and grow revenue. The company says the opening ceremony for the Paris Olympics was "the No. 1 entertainment event in Peacock history," with more than 2.5 million viewers.
Comcast's business isn't exactly firing on all cylinders, however. In its most recent earnings report, which ended in June, total revenue of $29.7 billion was down by 2.7% year over year, and earnings per share of $1.00 declined by 1.3%. Although business isn't exactly booming, it isn't tanking, either. And with growth opportunities in streaming and the launch of a new theme park next year with Universal Epic Universe, there are reasons this can make for an underrated growth stock to own despite its seemingly underwhelming results.
One of the more compelling reasons to invest in Comcast, however, is for its high-yielding dividend of just over 3%. That can give you some excellent recurring revenue. With the dividend, you can pad your overall returns from owning the stock.
2. Enbridge
For approximately $37, you can buy a share of the Enbridge pipeline company. The stock is known for its stability and its impressive dividend. The nature of Enbridge's dividend makes it a fairly stable long-term investment. Its pipelines help transport oil throughout North America. The company recently made a key move in acquiring assets from Dominion Energy for $14 billion, which will strengthen its position even further by creating "North America's largest natural gas utility platform."
Investors haven't been thrilled with the size of the deal and the debt Enbridge took on to finance it. However, the company has been selling interests in other companies to help free up cash, and it remains confident in its ability to generate strong cash flow to reduce its debt and continue paying and growing its dividend.
Enbridge hit its financial guidance for the 18th consecutive year in 2023, and its distributable cash flow, which is key in determining how much it can afford to pay in dividends, totaled 11.3 billion Canadian dollars, up from CA$11 billion in the previous year. CEO Greg Ebel says that the company's strong financials and low-risk business puts it in a good position to grow its earnings and dividend over time.
The company has increased its dividend for 29 straight years, and with a yield of 7.3%, that growing payout is already more than five times the S&P 500 average of 1.4%. If you love dividends, Enbridge can be a no-brainer stock to buy right now.
3. Realty Income
If you want more frequent cash flow, then you'll want to consider Realty Income. It's a real estate investment trust (REIT) that collects rent from a wide range of tenants. Not only is it diverse in terms of all the different industries it has exposure to, but it's also geographically diverse with its more than 1,500 clients spread across the U.S. and Europe.
What makes Realty Income special is that it pays dividends on a monthly basis as opposed to most dividend stocks, which pay every quarter. That means cash flow is going to be rolling into your portfolio on a much more frequent basis. In August, it's likely to declare dividends for the 650th consecutive month, highlighting an impressive streak of consistency, which dividend investors will be sure to love. Another thing they'll love is that the REIT's yield is fairly high at 5.4%, and it has been increasing over the years.
Last year, the REIT reported funds from operations per share of $4.07, which was slightly higher than the $4.04 it reported in 2022. With a high occupancy rate of nearly 99%, Realty Income is one of the safer REITs you can invest in today. And with a stock price of around $58, you can easily buy a full share of the business for less than $100.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Enbridge and Realty Income. The Motley Fool recommends Comcast and Dominion Energy. The Motley Fool has a disclosure policy.
