The 3 Best Dividend Stocks to Buy for Passive Income and Cash Flow

Updated: Aug 17







When it comes to generating a passive income and cash flow, there are few things better than dividend stocks. These stocks offer investors a steady stream of income, regardless of how the broader market is performing. In fact, over the long term, dividend stocks have tended to outperform their non-dividend paying counterparts.


That said, not all dividend stocks are created equal. To find the best dividend stocks to buy, you need to look for companies with a strong track record of growing their dividends year after year. This is important because it ensures that you'll be able to continue to count on that income stream, no matter what the market throws at you.


With that in mind, here are three of the best dividend stocks in 2022 to buy for passive income and cash flow.


1. Global X NASDAQ 100 Covered Call ETF (QYLD)


One of the best ways to generate passive income and cash flow is to invest in an exchange-traded fund (ETF) that focuses on dividend-paying stocks. And one of the best ETFs for this purpose is the Global X NASDAQ 100 Covered Call ETF (NASDAQ: QYLD).


As its name suggests, QYLD is an ETF that tracks the NASDAQ 100 index. This index is made up of some of the largest and most successful companies in the world, including Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Google parent Alphabet (NASDAQ: GOOGL).


What makes QYLD especially attractive for dividend investors is that it sells covered call options on the stocks in its portfolio. This generates additional income, which is then used to pay out a quarterly dividend.


Not only does this strategy help to boost QYLD's dividend yield (which currently stands at 14.99%), but it also reduces the fund's overall volatility. That makes it an ideal investment for those who are looking for a relatively safe and stable way to generate passive income.


QYLD is a relatively safe investment, thanks to its low volatility and the fact that it focuses on dividend-paying stocks.


In addition, the covered call options that it sells provide additional income and help to reduce the fund's overall risk. This makes QYLD an ideal investment for those who are looking for a safe and stable way to generate passive income.


2. Medical Properties Trust Inc (MPW)


If you're looking for a high-yield dividend stock in the healthcare sector, Medical Properties Trust Inc (MPW) is a great option to consider. With a current yield of 6.69%, it's one of the higher-yielding stocks on this list.


Medical Properties Trust is a real estate investment trust (REIT) that focuses on owning and leasing hospitals and other healthcare facilities. The company's portfolio includes over 200 properties in the United States, Germany, Spain, Italy, and the United Kingdom.


One of the things that make MPW an attractive dividend stock is its diversified portfolio of healthcare properties. This diversification helps to insulate the company from the volatility that can sometimes be seen in the healthcare sector.

Another thing to like about MPW is its strong track record of dividend growth. The company has increased its dividend for 12 consecutive years, which is an impressive feat.


MPW is a reliable dividend stock with a 12-year streak of increasing its payout. Additionally, the company has a strong track record of safety and reliability, thanks to its diversified portfolio of healthcare properties. This makes MPW a great option for investors looking for high-yield dividends.


MPW's stock price has appreciated over the past 5 years, despite the recent stock market downturn. The company's stock price has increased from a low of $7.1057 in February 2016 to a high of $23.50 in January 2022, which is a compound annual growth rate (CAGR) of 7.5%.


Despite the recent stock market downturn, Medical Properties Trust Inc's stock price has increased 30.56% annually over the past 5 years. This makes it a great option for long-term investors looking for capital appreciation.





3. Realty Income (O)


Realty Income (O) is a real estate investment trust that has increased its dividend for 21 consecutive years. It owns nearly 5,000 properties across 49 states and Puerto Rico, and it has a portfolio of net lease assets that are leased to high-quality tenants. The company has a strong track record of growth with its dividend per share increasing from $0.21 in 2003 to $1.01 in 2020.


The company also has a strong track record of safety, with its leases being triple net leases. This means that the tenants are responsible for all property-related expenses, such as taxes, insurance, and maintenance. This provides stability for Realty Income's cash flow and dividend payments.


The company's portfolio is diversified across several different sectors, including retail, office, industrial, and self-storage. Realty Income has a long, safe history of paying dividends and also has increased its dividend for 98 consecutive quarters.


The company's dividend yield is currently 4.40%. Realty Income's stock has a beta of 0.85, meaning it is less volatile than the overall market. The stock is also fairly affordable, with a price-to-earnings ratio of 18.16.


Investors looking for safe and best high dividend stocks should consider Realty Income. The company has a strong history of both dividend growth and safety, making it an ideal choice for income-focused investors.


The Bottom Line


Dividend stocks can be a great way to generate passive income and cash flow. However, it's important to do your research before investing in any stock. The three best dividend-paying stocks mentioned above are just a few of the many options available to investors.


When choosing the best dividend stocks to buy now, it's important to consider factors such as the company's dividend history, dividend yield, payout ratio, and valuation. Additionally, it's important to diversify your portfolio across several different companies and sectors to reduce risk.


Investors looking for the best long-term dividend stocks should consider Medical Properties Trust (MPW), Realty Income (O), and Global X NASDAQ 100 Covered Call ETF (QYLD). These companies have strong track records of both dividend growth and safety.

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