A Few Pennies for Your Thoughts (and Dividends)

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Now, listen closely, because I’m only going to say this once. Are your pockets feeling a bit… lacking? Does the thought of a little extra jingle in your purse fill you with a delightful, greedy sort of hope? Good. Because there are ways to conjure up some extra income, and none, frankly, are quite as simple—or satisfying—as letting your money work for you with dividend stocks.

We’ve sniffed around, poked about, and found three particularly interesting specimens: Altria Group (MO), Healthpeak Properties (DOC), and Ares Capital (ARCC). At recent prices, these chaps are yielding an average of 7.3%. So, if you were to gather up a rather respectable $6,900 and divide it equally amongst them (a good plan, I think), you could find yourself receiving over $500 a year in dividends. Enough, perhaps, for a rather splendid collection of licorice allsorts.

Let’s have a closer look, shall we, and see if these companies are worthy additions to your own little treasure chest.

1. Altria Group

Altria, the people responsible for those rather addictive Marlboro cigarettes, have seen their shares puff themselves up by about 15% over the last year. Quite a feat, considering fewer and fewer folks are lighting up these days. But they’ve been clever, you see. They’ve been dabbling in other, newer ways to deliver nicotine – little vaporizing gadgets and things. Though, truth be told, those disposable vaporizers – the ones that taste of bubblegum and regret – have been causing a bit of a kerfuffle.

Marlboro shipments tumbled by 11.4% last quarter. Eleven point four percent! It’s as if a giant hand reached in and swiped a sizable chunk. And it’s all down to these sneaky little e-vapor devices that seem to bypass all the sensible rules. Still, despite this, Altria’s revenue (after the tax man has taken his greedy cut) only dipped by 0.4%. They’re squeezing profits from what’s left, like a particularly determined lemon.

The market believes Altria’s other nicotine contraptions can compensate for the dwindling Marlboro sales. Sales of oral tobacco, for instance, have risen by 6%. And the FDA is beginning to crack down on those rogue vaporizers, sending out warning letters like angry bees. This could give Altria a bit of a boost.

Altria currently yields 6.7%, and another dividend increase seems quite likely. They’ve been raising their payout 59 times in the last 55 years – a rather impressive record of generosity, wouldn’t you say?

2. Healthpeak Properties

Now, here’s a sensible one. People will always get sick. It’s a rather unpleasant truth, but a very reliable one. Healthpeak Properties owns buildings where doctors tinker with patients, laboratories where scientists brew potions, and retirement communities where folks go to… well, to wait. It’s a clever business, really, building places for the inevitable.

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These shares currently offer a dividend yield of 6.9%. Not bad at all.

After the rather unpleasantness of the COVID-19 pandemic, investment in biotechnology companies dried up faster than a puddle in the Sahara. Healthpeak rents space to everyone from established pharmaceutical giants to tiny, hopeful start-ups. The lack of interest from these start-ups caused a bit of a wobble, which Healthpeak smoothed out by merging with Physician’s Realty, owners of medical office buildings.

This merger meant they had to trim the dividend, which is never a popular move. But give it time, and you can expect the payouts to swell again. In the last quarter, their ‘adjusted funds from operations’ (a rather fancy way of saying ‘earnings’) rose to $0.44 per share. More than enough to cover those monthly dividend payments, which currently sit at a modest $0.305 per share per quarter.

3. Ares Capital

Ares Capital is a bit of a peculiar beast. It’s what they call a ‘business development company’ (BDC). These companies step in where the big banks are too frightened to tread – lending money directly to businesses. The banks, you see, have become rather fussy and prefer simpler, less adventurous things.

So, businesses, often with millions in revenue, are desperate for capital, and willing to pay surprisingly high interest rates to get it. Ares Capital reported a 10.9% average yield on its loans last quarter. That’s a rather substantial return, I think you’ll agree.

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Ares Capital yields 8.4% at present. They’ve been known to occasionally fling out a little extra dividend, which can make things look a bit erratic. But the quarterly payout has been steadily rising (or at least staying put) since 2009, which is as reliable as a good grandfather clock.

Lending to mid-sized businesses isn’t a walk in the park, but Ares Capital has certain advantages. It’s managed by a bit of a giant – Ares Management – who have a staggering $546 billion under their control. They have a team of clever underwriters, and only 1.2% of their loans are currently causing them headaches. Adding a few shares to a well-balanced portfolio seems, to me, a very sensible idea indeed. 🧐

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2025-07-31 13:56