You don’t need much money to generate passive income from the stock market. Many high-quality dividend stocks sell for less than $50 a share. That allows you to put even a little bit of money to work generating income.
Three great dividend stocks with low share prices are Medical Properties Trust (NYSE: MPW), Kinder Morgan (NYSE: KMI), and STORE Capital (NYSE: STOR). With stock prices currently in the $16 to $26 range, and above-average dividend yields, they can help investors maximize their ability to earn dividend income.
A healthy dividend
Medical Properties Trust is a real estate investment trust (REIT) that focuses on owning hospitals. It leases these facilities to healthcare companies, supplying it with steady rental income to pay its dividend. The healthcare REIT currently offers a 7.3% dividend yield on its $16 stock price.
One of the great things about this dividend is that Medical Properties Trust has steadily increased it each year; the REIT delivered its ninth straight year of dividend increases in 2022. The company has been able to steadily increase its dividend by continuing to acquire income-producing hospital real estate.
The REIT expects to acquire another $1 billion to $3 billion of properties this year. Those deals should enable it to continue growing its dividend. Meanwhile, it has lots of growth ahead, given its estimates that there’s $500 billion to $750 billion of owner-occupied hospital real estate in the U.S. alone. That provides the REIT with a vast opportunity set to drive future dividend growth.
Plenty of fuel to keep growing the dividend
Kinder Morgan is a leading natural gas pipeline company. It gets paid steady fees as natural gas and other commodities travel through its pipelines and related infrastructure. That gives Kinder Morgan stable cash flow to support its dividend, which yields 5.8% at the current $19 stock price.
Kinder Morgan has increased its dividend payment in each of the last five years, and it should have plenty of fuel to grow the dividend in the future. The natural gas pipeline giant currently produces enough cash to cover its high-yielding dividend and its expansion program, with room to spare. With those expansion projects growing its cash flow, Kinder Morgan will have more money to increase the dividend.
The company expects to be able to continue growing its natural gas infrastructure footprint. Russia’s invasion of Ukraine is forcing counties to prioritize energy security, leading them to secure more liquefied natural gas (LNG) supplies from the U.S. That should give Kinder Morgan more opportunities to expand its natural gas infrastructure in the coming years, supporting its ability to keep increasing the dividend.
STORE Capital is another REIT that pays an attractive dividend. It currently offers a 5.9% yield on its $26 stock price.
The REIT has steadily increased its dividend since its initial public offering in 2014. It has given investors a raise every year, growing the payout at a 6.1% compound annual rate during that time frame.
One of the keys to STORE Capital’s success is its focus on acquiring properties crucial to the profits of the tenants operating them. These include manufacturing sites, service-oriented retail properties (like furniture stores and automotive dealers), and service-related real estate (such as restaurants, medical offices, education buildings, and health clubs). STORE Capital’s focus on profit-center real estate means its tenants are more likely to continue to pay rent so they don’t lose access to a profitable location.
Great ways to start putting your money to work
The stock market makes it easy to start earning passive income. Thanks to their low share prices, it would cost just over $60 to buy one share each of Medical Properties Trust, Kinder Morgan, and STORE Capital. That would allow investors to put their money to work making more money, since these companies pay attractive dividends that they’ve steadily increased over the years.