Hate Checking Your Portfolio? Try These 3 Stocks
Many investors feel the need to check their portfolio on a daily basis. Some just want to see if they're wealthier today than they were yesterday. But others may have made some risky bets that they're monitoring closely.
For investors who'd prefer a more hands-off approach, there are plenty of lower-risk stocks out there, which wouldn't require much monitoring. Three excellent options for those who hate checking their portfolio are General Electric (NYSE: GE), W.P. Carey (NYSE: WPC), and ONEOK (NYSE: OKE).
The industrial giant
General Electric has been a quintessential buy-and-hold stock over the years because of its strong financial position and diversification across several industries, including energy, transportation, and healthcare. While some of its business units are currently under pressure because of challenging industry conditions, the company continues to generate gobs of cash flow that help fuel returns for investors. One of the primary ways it sends back money to investors is through an attractive dividend, which currently yields 3.9%.
Aside from that compelling payout, one thing that stands out about GE right now is its valuation. The stock is down a surprising 20% this year because of some market challenges, especially in energy, where it recently boosted its exposure by creating Baker Hughes, a GE Company (NYSE: BHGE). Oil and gas market conditions are better than they were and should continue to improve in the coming years, as the oil market returns to normal, which should bolster results at Baker Hughes and GE. In the meantime, the sell-off provides investors the opportunity to buy GE for a lower price and lock in a high yield that should continue to grow in the years ahead.
A lazy way to be a landlord
W.P. Carey is a real estate investment trust (REIT) that invests in net lease properties, which are those leased to a single tenant that pays virtually all the expenses. The company owns 895 properties that it has leased to 214 tenants across the U.S. and Europe. Occupancy across its portfolio is 99.3%, while the weighted average remaining lease term is 9.6%. Those contracts provide the company with predictable cash flow that supports a compelling dividend, which yields 5.8% at the moment.
That high yield from W.P. Carey is on solid ground, since the company currently pays out about 76% of its cash flow to support the payout, down from 80% in 2013 and well below the rate of many other REITs. Further, it has a top-notch balance sheet with low leverage metrics and minimal exposure to rising interest rates.
The oil and gas tollbooth
ONEOK is a pipeline and processing company that primarily focuses on natural gas and natural gas liquids. However, unlike many energy-focused companies, ONEOK has minimal direct exposure to commodity prices, since fee-based contracts underpin 90% of its earnings. As a result, the company's 5.3% dividend is on solid ground, especially when factoring in a coverage ratio of more than 1.2 and a strengthening balance sheet.
As good as ONEOK's yield is right now, it could be a goldmine for income investors over the coming years, as the company plans to increase its payout by 9% to 11% annually through 2021. Supporting that forecast is a growing inventory of high-return, fee-based organic growth projects it has under development. As the company completes these projects, they'll provide incremental cash flow to support future dividend growth, as well as further strengthen its financial position by bolstering scale and reducing the leverage ratio.
These boring companies mean you can take a hands-off approach
These companies all share one thing in common, which is that they generate relatively predictable cash flow thanks to diversified operations or contractual obligations. The only reason an investor might want to check his or her portfolio with these stocks is to see if the companies raised their dividends, which is likely to happen once a year. Otherwise, investors can spend their time on other pursuits, like deciding how to spend that growing stream of dividend income.
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Matthew DiLallo owns shares of W. P. Carey. The Motley Fool owns shares of and recommends ONEOK. The Motley Fool has a disclosure policy.