Realty Income is a reliable and boring dividend payer with a yield of 5.5%.
Bank of Nova Scotia is a recovery story with a yield of 4.4% and a dividend history spanning nearly 200 years.
The Schwab US Dividend Equity ETF isn’t a stock, but its 3.8% yield could be a staple of a diversified portfolio.
10 Stocks We Like More Than the Schwab US Dividend Equity ETF ›
I like dividend stocks, but I’m pretty picky about what I buy. My preference is for companies that have a proven dividend history and relatively attractive yields. I think this combination suggests a promising company that is currently out of favor.
Two stocks coming through my dividend screens today are Real estate income(NYSE:O) and Bank of Nova Scotia(NYSE: BNS). Here’s a look at each and a quick dive Schwab US Dividend Equity ETF(NYSEMKT: SCHD)which could be a great addition to your dividend portfolio or even the only dividend investment you ever own.
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Realty Income is a real estate investment trust (REIT) that invests in single-tenant, net-leased properties. A net lease requires the tenant to pay most of the operating costs at the property level. While any property is high risk, the risk is very low when you spread it across the 15,000+ properties that Realty Income owns. It is the largest player in its net rental group by a wide margin.
The company’s portfolio is focused on the retail sector, where assets are easily bought, sold and released as needed. However, it adds industrial assets and some unique property types (such as vineyards and casinos) to increase diversification. In addition, the company’s portfolio spans the US and European markets, offering geographic diversification as well. An investment-grade balance sheet rounds out the foundation and positions Realty Income as a fairly safe dividend stock for even the most conservative investors.
In particular, the dividend was increased annually for 30 years. The yield is close to a 10-year high of 5.5%. The only problem with Realty Income is that it’s about as exciting as watching paint dry, with management preferring to run the business in a slow and steady fashion to ensure steady dividend growth. However, if you’re a conservative investor, this probably won’t bother you at all.
Next is the Bank of Nova Scotia, which is more commonly referred to by its nickname Scotiabank. The stock has a dividend yield of 4.4%, backed by a dividend that has been paid every year since 1833. This is the kind of dividend stock you could buy and comfortably hold for the long term, as it’s pretty obvious that the board places great value on rewarding investors with dividends. That said, Scotiabank is going through some significant changes.
While the bank’s Canadian peers have largely chosen to invest in the US market for growth, Scotiabank has skipped the country to focus on Central and South America. The hope was that emerging markets in the region would offer more growth potential. However, economic and political uncertainty proved to be a problem, and Scotiabank ultimately lagged behind its peers. It is now exiting the less desirable regions and refocusing on Mexico, the United States and Canada. Things are moving pretty quickly, noting that the dividend was held constant in 2024 to accommodate the business transition, but started to rise again in 2025.
To be fair, Scotiabank shares have rallied in recent months and their dividend yield is at a 10-year low. But the average yield of a large bank is only 2.4%. If you are looking for a bank document, Scotiabank is an attractive choice. Assuming results continue to improve, there’s still plenty of room to close the rating gap here.
The Schwab US Dividend Equity ETF is clearly not a stock. It is an exchange traded fund (ETF). But it does something very interesting. First, it only looks at stocks with at least 10 consecutive annual dividend increases (eliminating REITs). It then creates a composite score that examines a company’s cash flow to total debt, return on equity, dividend yield and five-year dividend growth rate. The 100 highest-rated stocks go into the ETF with a market capitalization weighting.
Without getting into the nitty-gritty, the Schwab US Dividend Equity ETF essentially looks for financially strong companies that are well managed and have attractive yields supported by growing dividends. This is essentially what most long-term dividend investors want to do when they buy individual stocks. You can have this ETF do it for you and it will only cost you a small expense ratio of 0.06%. Meanwhile, you’ll get a pretty attractive 3.8% return without having to do all the work required to manage your own portfolio.
The Schwab US Dividend Equity ETF may be the only dividend investment you need. Alternatively, it could be a core investment on which to layer high-conviction ideas like Realty Income and Scotiabank. If anything, it should be at the top of the dividend list right now.
There is no one way to invest in dividend stocks. If you like boring, reliable investments, Realty Income will probably be right for you. If you like turnaround stories, Scotiabank’s business reorganization is gaining ground. And if you simply want to keep your life simple, consider outsourcing to the Schwab US Dividend Equity ETF.
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Reuben Gregg Brewer has positions in Bank Of Nova Scotia, Realty Income and Schwab US Dividend Equity ETF. The Motley Fool has positions and recommends Realty Income. The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy.
Here are the 3 best high-yield stocks to buy right now was originally published by The Motley Fool
