While Coca-Cola (KO 0.43%) has been one of the most dependable dividend stocks you can have in your portfolio, its yield is not the highest out there. If you're looking to maximize your dividend payouts, there are better names on the market.
Three names I like are Medical Properties Trust (MPW +1.08%) with a 4.8% dividend yield, National Health Investors Inc (NHI 0.65%) with 5%, and JPMorgan Chase & Co. (JPM +1.34%) with 3.11%. These might not be the most exciting sectors, but with the rising fears of the coronavirus and the rising fears of a more socialistic Democratic candidate for the White House, as well as concerns over global growth, I like the safety of these areas.
Look to healthcare-based real estate
Medical Properties Trust invests in healthcare-related real estate domestically, as well as high-quality markets in Europe and Australia. Historically trailing the S&P 500 by 35%, Medical Properties has changed the story in recent years, as its portfolio and revenue have increased significantly. Total revenue doubled between 2015 and 2019 to $854 million, with income of just under $375 million in fiscal 2019.
The company continually delivers strong earnings per share, and investors have enjoyed the stock run because of it. Coupled with the fact that Medical Properties Trust pays a 4.86% dividend yield thanks to the distribution rules for Real Estate Investment Trusts, you have a nice source of income, here. The growth story seems primed to continue, as the REIT had $4.5 billion in acquisitions in 2019.
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Whereas Medical Properties Trust is primarily focused in hospitals and acute care facilities, National Health Investors Inc. has a large focus on assisted-living facilities, senior housing, and nursing facilities. The stock offers a 5% dividend, and the company had a very nice operating margin of 51.7% in 2019. As a percentage of revenue, net income of $164.46 million was only slightly lower at 50.57%.
We've seen a bit of stagnation on the earnings front, as an expanding share count has diluted the gains. Despite this, the company continues to grow. Revenue increased 11.5% year over year in the fourth quarter of 2019, and 2020 guidance is calling for net income of $4.33 to $4.47 per diluted share. Conservatively, that would mark a strong 18% gain. Normalized earnings after adjustments from fund operations are expected in the range of $5.31 to $5.35.
Part of the reason I like these two names is simply the exposure to healthcare. Whereas many forms of real estate might be subject to economic cycles, healthcare remains an essential part of life. While no business is entirely recession-proof, people still get sick even when the economy is bad. To that end, it's harder for consumers to cut back on healthcare. Factor in the vast pool that is Medicare as well as senior-based trusts such as National Health Investors, and the strong hospital portfolio of Medical Properties Trust makes them enticing plays.
A strong bank
Financials may not be the hottest sector these days, but JPMorgan remains a solid long-term asset for any portfolio. Factor in the 3.11% dividend, and there's real appeal, here. Over a 10-year period, shares have beat the S&P 500 by 56%. The annual interest income growth has been strong, bringing in $84 billion last year despite a low interest rate environment.
Annual net income growth has been even better, with a 12.3% increase in 2019 to $36.23 billion. The year prior saw earnings growth of 33.14%. The value of these earnings has been amplified for shareholders, as the bank has worked to decrease its overall share count. Outstanding shares decreased 13.4% between 2015 to 2019.
In terms of large-cap financials, I still like JPMorgan. Banks are cheap relative to much of the broader market. JPM shares carry a P/E of 10.78. Coronavirus fears have put an 11.8% dent in the stock, perhaps providing a nice buying opportunity if one is looking at the long term. Buffett has been a fan of the stock for a while, praising its returns on equity. My general view is if it's good enough for Buffett, it's good enough for me.