I've been rather aggressive when it comes to adding to my stock portfolio during the recent market turbulence, as there is no shortage of opportunities for patient, long-term investors. But some are more attractive than others.
With that in mind, here are two dividend stocks in particular that I've bought several times in 2023 and plan to continue building my position in over time.
Lots of demand for alternative assets
Brookfield Asset Management (BAM -1.32%) invests money on behalf of its clients in alternative investments in real estate, alternative energy, and much more. To be sure, if you want to invest in some of Brookfield's actual investments, there are several publicly traded vehicles run by the company that can allow you to do so. For example, Brookfield Renewable Partners (NYSE: BEP) can give you exposure to the company's renewable energy assets.
On the other hand, Brookfield Asset Management simply invests its clients' money to generate capital-light fee income. Demand has been very strong for alternative investments in recent years (given the volatility of the stock market, it isn't a big surprise that investors want other options). The company has $432 billion in fee-bearing capital under management which generates about $4 billion in annual fee revenue, and it has more than $110 billion in capital ready to deploy. Over the past 12 months alone, Brookfield raised an all-time high $98 billion of capital.
Brookfield's management team believes it can grow the company's fee income at a 15% annualized rate for the foreseeable future, and it has a five-year target of growing fee-bearing capital by nearly 150% to $1 trillion. Plus, ever since the asset management business was recently spun off from the rest of Brookfield Corporation (BN -1.16%), management has made it clear that dividends are a priority, targeting a payout ratio of more than 90% of earnings. Brookfield Asset Management pays a 4% dividend yield, and the stock could be a fantastic total return generator for patient investors.
A major headache could be gone soon for this high-yield stock
EPR Properties (EPR -0.57%) is a real estate investment trust, or REIT, that specializes in experiential properties. It owns a portfolio of waterparks, ski resorts, eat-and-play businesses (TopGolf is one of its largest tenants), and more. But the company's largest property type -- movie theaters -- has been the biggest question mark. And that's especially true since Regal Entertainment, which is one of the company's top tenants, is in the middle of bankruptcy proceedings.
In May, it was announced that Cineworld (Regal's parent company) expects to exit Chapter 11 in July. And to be sure, we don't know exactly what it will mean for EPR. Regal's leases will likely be renegotiated, but there's no indications that any EPR-owned Regal locations are on the chopping block. The stock has already increased significantly on the news that there is light at the end of the tunnel, and once the situation finally comes to an end, it could be a big catalyst, especially since EPR's business is performing very well overall and trades for less than nine times annualized funds from operations (FFO), the REIT version of earnings.
EPR sees tremendous potential for growth in the years ahead, with a $100 billion investable market of non-theater properties it could pursue. To be fair, growth will likely be slow for the next year or two given the current interest rate environment, but this is a very profitable REIT with excellent financial flexibility. Once the movie theater uncertainty settles, EPR could have a very bright future. In the meantime, EPR is generating enough income to cover its 7.4% dividend yield and still generate extra cash to invest without having to raise capital through equity or debt.
These aren't the lowest risk dividend stocks
To be perfectly clear, if you're looking for low-risk dividend stocks, there are better choices. Just to name a few that I own as well, I'd place Realty Income (NYSE: O), Public Storage (NYSE: PSA), and MetLife (NYSE: MET) on the lower end of the risk spectrum compared with these two stocks.
However, when it comes to Brookfield and EPR, the risk-reward dynamics make a lot of sense right now for patient, long-term investors. I expect a bit of a bumpy ride with both but am confident I'll be glad I added shares at these prices when looking back years from now.
