Waiting is difficult in long-term investing. Cheap equities may attract investors hoping for big long-term gains. Stagnation or decline can make that payout take years. Nvidia and Super Micro, which have risen since 2024, are examples of investments that pay off faster. These stocks may have run their course, but three others will likely close the year higher.
Real Estate Income REIT Realty Income (NYSE: O) holds 15,500 single-tenant commercial buildings. Many of the nation's largest retailers lease space from it, which often buys and leases it back. Agreements are net leases. Maintenance, taxes, and insurance are covered by the tenant. Despite that gain, increasing interest rates raise borrowing expenses and new deal costs, hurting the stock.
It pays investors roughly $3.08 per share annually, yielding 5.7%. Dividend increases are anticipated to continue given the payout has increased year since 1994.Realty Income may also benefit from lower interest rates. After years of enormous rises, the Fed expects three interest rate cuts this year. Lower borrowing costs should attract more investors to Realty Income's stock.
Though its profit multiple has topped 50 for much of the last five years, its price-to-earnings (P/E) ratio of 43 is modest by historical standards. With that appealing entry price, Realty Income should be a growth and income investment that yields bigger returns in 2024 and beyond.
Innovative Industrial Assets Innovative Industrial Properties (NYSE: IIPR) is another REIT rebounding. Cannabis farmers rent IIP land and facilities. It held 108 buildings in 19 states with 8.9 million leasable square feet as of 2023.
A property is bought and leased back to the owner, like Realty Income. Since marijuana companies cannot use banks, IIP has a revenue stream and they have a cash flow. IIP has also overcome obstacles. Non-paying tenants increased during the latest cannabis industry downturn. However, it was able to pivot, renegotiating leases, finding new tenants, or selling properties when it had no other option.
This strength was verified late last year when it raised its dividend for the first time in five quarters. It pays 7% dividends at $7.28 per share. Since its April low, IIP's stock has steadily risen, and its P/E ratio of 18 is near record lows. As cannabis sales rise and interest rates fall, optimistic trends may lift IIP now and in the future.
IBM Other high-income stocks include IBM (NYSE: IBM). The corporation and its shares stalled for years as its tech companies failed to thrive amid increased competition. In 2019, IBM acquired Red Hat, changing the paradigm. The purchase's architect, Arvind Krishna, became CEO soon after. He split off Kyndryl's managed infrastructure after acquiring dozens of cloud-based firms.
IBM is now the sixth-largest cloud infrastructure supplier. According to Grand View Research, the cloud computing sector will increase 14% year through 2030, despite not having the greatest market share. Watsonx, its generative AI platform, supports artificial intelligence-driven customer applications, making its cloud business likely to grow.
Its $6.64-per-share annual dividend yields 3.5%, making IBM one of the highest-yielding cloud companies. If it raises the dividend again in April, it will have done so for 29 years. IBM's value proposition has attracted investors. Over the past year, the stock has risen over 50% to near record highs. Its P/E ratio of 24 is high by IBM's standards, but it compares well to other cloud and AI firms, raising the probability that the shares will achieve new record highs in 2024 and beyond.
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