Passive income doesn’t necessarily mean pacifying income. In other words, some investments that offer the potential to generate income are the kinds that will keep you up at night worrying.
The good news is that’s not always the case. Here are three top dividend stocks for passive income that’ll let you sleep peacefully.
1. Medical Properties Trust
Even with improvements in healthcare, it’s a safe bet that people will continue to get sick and have to go to the hospital. We’re not going to see hospitals go extinct in our lifetimes or even in our great-grandchildren’s lifetimes. As one of the world’s largest owners of hospitals, that makes Medical Properties Trust (MPW -1.07%) the kind of stock that you don’t have to worry about.
Medical Properties Trust currently owns around 440 hospitals in 10 countries. The company doesn’t actually operate those facilities, though. Instead, it’s a real estate investment trust (REIT) that leases facilities to 53 hospital operators.
As a REIT, Medical Properties Trust must distribute at least 90% of its taxable income to shareholders in the form of dividends. The company has increased its dividend payout for 10 consecutive years. Its yield tops 6.1%.
You won’t have to give up growth opportunities in exchange for Medical Properties Trust’s solid income, either. Over the past 10 years, the stock’s total return has outperformed that of the S&P 500.
2. Brookfield Renewable
We don’t have to be Nostradamus to predict that the demand for renewable energy will increase significantly in the coming years. Countries and major corporations across the world have committed to slashing their carbon emissions. Wind and solar sources are now cheaper alternatives for bulk energy production than fossil fuels. I think all of this makes Brookfield Renewable (BEP 0.00%) (BEPC -0.80%) a fantastic stock to buy for generating passive income.
Brookfield Renewable owns hydroelectric, wind, solar, and storage facilities on four continents. The company’s current capacity totals more than 21 gigawatts. Brookfield Renewable’s development pipeline holds the potential to nearly quadruple its capacity.
The company’s distribution has increased by a compound annual growth rate of 6% since 2011. Its distribution yield currently stands at close to 3.6%.
Brookfield Renewable has delivered a total return of more than 360% over the past 10 years, trouncing the S&P 500. With the company projecting average annual total returns in the ballpark of 15%, this is a safe dividend stock that could realistically double your money in less than five years.
3. Verizon Communications
The demand for high-speed internet access anywhere and anytime isn’t going away. On the contrary, with the rise of the Internet of Things, demand is much more likely to skyrocket. Verizon Communications (VZ 0.90%) is poised to reap the rewards.
Verizon ranks as one of the largest wireless carriers in the world. Mobile analytics researcher RootMetrics named the company’s 5G network as the most reliable in the U.S. Verizon expects to cover more than 175 million people with its 5G Ultra Wideband network, its fastest offering, by the end of 2022.
Income investors have been attracted to Verizon for a long time. The company has increased its dividend for 15 consecutive years. Its dividend yield currently tops 5.4%.
Granted, Verizon hasn’t exactly been a growth machine in recent years. Its total return has lagged well behind the overall market. However, Verizon’s strong dividend combined with its opportunities in 5G make it one of the best telecom stocks around.