Counterattack the bear market with these 3 high-yielding dividend stocks

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The bear market has taken a bite out of most investors’ portfolios. Stock prices fell by more than 20% on average as investors worried about the impact that high inflation and rising interest rates will have on the economy.

However, this plunge also offers opportunities, because dividend yields generally move in the opposite direction to stock prices. As a result, now that stock prices are falling, investors can lock in much larger income streams, providing them with higher tangible returns and stable income streams. Three high-quality companies currently offering much higher dividend yields than before this bear market are Alexandria Real Estate Stocks (ARE -2.30%), Enbridge (IN B -3.10%)and Intel (INTC -1.93%).

A healthy payment

Shares of Alexandria Real Estate Equities have fallen about 40% from their recent high. This sale prompted the real estate investment trust (REITs) dividend yield up to 3.5%. It’s double S&P500the current dividend yield of 1.7%, and the payout is on a sustainable basis.

While Alexandria is a REIT office, it doesn’t face the same pandemic-related work-from-home headwinds as others in its niche, as it primarily owns lab space that’s leased to life science tenants. Demand for these properties has increased since the pandemic as healthcare companies invest more money in research and development. Rental rates for leases signed this year are on average 25% higher than previous rental rates for the same spaces.

Alexandria complements its rock-solid real estate portfolio with a top-notch balance sheet. Its credit rating is in the top 10% of all publicly traded US REITs. It also has a conservative dividend payout ratio of 55% of its projected operating funds for 2022 (FFO) after taking into account a recent 5% increase in its already attractive dividend. This leaves Alexandria with enormous financial flexibility to expand its portfolio, which should allow it to continue to increase its dividend.

The fuel to keep growing

Enbridge’s stock price has fallen more than 20% from its peak. This pushed the energy infrastructure company’s dividend yield to 7.3%. And that payment is also on rock-solid ground.

Enbridge Low Risk pipelineutility business model generates stable cash flows supported by long-term contracts and government-regulated rate structures. Meanwhile, Enbridge only pays around 65% of its regular cash flow through the dividend. This gives it a solid cushion and allows it to retain funds for expansion. It also has a strong quality balance sheet, which gives it additional financial flexibility.

Enbridge has the financial capacity and a secure project backlog to grow its cash flow per share at a rate of 5% to 7% per year until at least 2024. In the meantime, she has a growing list of longer-term projects underway and in development. This should give Enbridge the fuel it needs to continue increasing its dividend, which it has done for an impressive 27 consecutive years.

Down but not out

Intel stock has fallen more than 50% in the past year. That pushed the tech company’s dividend yield up to 5.5%.

On the one hand, Intel faces many headwinds. Slowing demand for its technology due to macroeconomic conditions put pressure on sales and earnings. During this time, the company is investing heavily to revive its growth and get ahead of its competitors. That has led some to worry that Intel doesn’t have the funds to keep its dividend at its current level while it expands manufacturing capacity.

However, the company has a cash-rich balance sheet and has recently brought in a financial partner to help finance two of its new factories. Factor in the passage of the flea lawwhich will provide tens of billions of dollars in incentives to promote chip manufacturing in the United States, and Intel should be able to continue to grow its dividend during this heavy investment phase.

A Great Opportunity to Obtain Higher Yields

The bear market has caused the shares of some high-quality dividend-paying stocks to fall much further. For this reason, investors can now get quite attractive returns from companies like Alexandria Real Estate Equities, Enbridge, and Intel. Buying these stocks will get you well paid while you wait out the bear market – and for years after. Meanwhile, these payouts could help you retaliate against the bear market, as you could potentially use them to capitalize on other new investment opportunities.

Matthew DiLallo has positions in Enbridge and Intel and has the following options: $30 long calls on Intel in January 2025, $30 short calls on Intel in January 2025 and $55 short calls on Intel in November 2022. The Motley Fool holds positions and recommends Alexandria Real Estate Equities, Enbridge and Intel. The Motley Fool recommends the following options: January 2023 long calls at $57.50 on Intel, January 2025 long calls at $45 on Intel, January 2023 short calls at $57.50 on Intel and short calls from January 2025 sale at $45 on Intel. The Motley Fool has a disclosure policy.

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