Now, I’ve always been a bit suspicious of schemes promising effortless riches. Usually, they involve a Nigerian prince and a large quantity of postage stamps. But the idea of earning a little something simply for owning a bit of a company? That, I confess, has a certain appeal. It’s not about getting rich quick, you understand. It’s about building a modest, reliable income stream. A trickle, if you will, that might just pay for a decent cup of coffee each day. Or, if you’re particularly frugal, a small island. Okay, probably just the coffee.
The notion is surprisingly straightforward: invest in companies that regularly share their profits with shareholders in the form of dividends. And not just any dividends, mind you. We’re after a respectable yield, a decent return on your investment. After a bit of poking around, three companies struck me as particularly interesting. They’re not glamorous, not exactly the sort to set the world alight, but they seem to reliably churn out cash. And that, my friends, is precisely what we’re after. We’re looking at United Parcel Service (UPS 0.35%), Enbridge (ENB 0.97%), and General Mills (GIS 0.11%). Invest $6,000 in each, and you might find yourself with around $1,000 a year in dividends. Not enough to retire on, certainly, but a pleasant little bonus nonetheless.
United Parcel Service
UPS, or United Parcel Service, is, as you probably know, in the business of delivering things. A truly staggering amount of things, actually. If you were to lay end-to-end all the packages UPS delivers in a single day, it would likely circle the Earth several times. Or at least, it would if anyone had bothered to measure. The company has had a bit of a rough patch lately – tariffs, a sluggish global economy, the usual suspects. Its stock price has dipped, which, while unfortunate, presents an opportunity. A chance to buy a solid company at a slightly reduced price. They’ve even announced 48,000 job cuts, which is never a cheerful thing, but suggests they’re serious about tightening their belts. The important thing is they’re still generating a healthy amount of free cash flow – over $1.4 billion in recent quarters – which comfortably covers their dividend payments.
At a current yield of around 6.1%, UPS offers a particularly attractive income stream – more than five times the average yield of the S&P 500. Investing $6,000 today could generate roughly $370 in dividend income over the next year. Not bad for essentially being paid to own a piece of a company that delivers, well, everything.
Enbridge
Enbridge, based in Canada, is in the pipeline business. Not the sort of pipelines you might associate with espionage novels, but the kind that transport oil and gas. It’s a remarkably stable business, actually. People will always need energy, regardless of economic conditions. Enbridge has a long track record of paying dividends, and they’ve been consistently raising them for over three decades – 31 consecutive years, to be precise. That’s a level of consistency that’s rather comforting in a world that seems determined to be unpredictable.
What’s particularly appealing about Enbridge is that its earnings aren’t overly reliant on fluctuating commodity prices. They charge fees for transporting oil and gas, regardless of how much it costs. It’s a bit like a toll road – people pay to use it, regardless of the price of gasoline. They’re on track to meet their guidance for a 20th consecutive year, which speaks volumes about their stability. Their distributable cash flow – the money they use to pay dividends – has increased to 9.2 billion Canadian dollars. Investing $6,000 in Enbridge could add around $350 to your dividend income over a year.
General Mills
General Mills. Now, there’s a company that knows its way around a breakfast table. Cheerios, Betty Crocker, Wheaties… these are brands that have been part of the American landscape for generations. The stock has taken a bit of a beating lately, as investors worry that a growing focus on healthy eating will hurt their business. But I suspect those concerns are a bit overblown. People will always have a fondness for a comforting bowl of cereal, even if they occasionally feel a twinge of guilt.
Their organic net sales were down just 1% in their most recent quarter, and their payout ratio – the percentage of earnings they pay out as dividends – is a healthy 52%. The stock trades at less than 10 times its trailing earnings, which seems rather reasonable. Investing $6,000 in General Mills could generate around $330 in annual dividends. Adding it all up, these three investments could bring in approximately $1,050 a year. Not enough for that island, perhaps, but certainly enough for a very good coffee machine.
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2026-01-21 14:12