For stock price appreciation and dividend payouts, this is the sector to watch…
The AT&T Inc. dividend, matched with stock price appreciation, placed it on many “Stocks to Buy” lists for 2021. After all, AT&T has a current dividend yield of 6.46%, and by most metrics, it has the reigning title of the largest telecommunications company in the world.
For example, AT&T generated $161.5 billion in revenue in 2020, while Verizon was the next closest to matching that total while still being significantly behind at $117.5 billion.
Now, with the announcement of a new megadeal, that’s changed everything for AT&T shareholders and dividend seekers.
AT&T will merge its content business with Discovery, a move that reduces $43 billion in debt for AT&T and allow it to compete more directly with Walt Disney, NBCUniversal, and Netflix.
The deal still has to pass through regulators, and it won’t be expected to close until the middle of 2022.
Right now, the debt reduction and the merging of the media assets is a win for AT&T.
But it’s not a win for the AT&T dividend.
The dividend payout is expected to be slashed from $15 billion to $8 billion or $9 billion, leaving many investors to wonder where should they put their money to receive a dividend payout with a 6% yield or higher from a company that could also have its stock price go higher.
Because as a dividend investor, you know that’s not easy to achieve.
You’re generally sacrificing something when investing in dividend stocks. You either get a great yield but the stock price never grows or drops, or the stock price can appreciate but the dividend yield is so low that it doesn’t fit your goals of the extra income you are trying to bring in each quarter.
That’s why today, I want to share with you a stock that’s been on my watchlist for some time.
It currently pays out a dividend yield of 6.7%, and it’s a part of an industry that’s expected to climb from $20 billion in sales in 2020 to $45 billion by 2025.
Here are all the details…
Cannabis is still illegal under federal law, but states are currently not being interfered with if they legalize cannabis on their own.
And cannabis sales are expected to skyrocket from $20 billion in 2020 to $45 billion by 2025 as more states legalize recreational marijuana.
Now, from this, a handful of companies have found a unique niche – they can cash in on the cannabis boom, but they don’t have to touch the plant.
They don’t grow it.
They don’t transport it.
They don’t sell it.
They keep their hands completely clean.
What these companies do is act as a cannabis landlord. They lease out a property to a cannabis company, sit back, and collect rent.
So as more cannabis companies look for spaces to rent as they expand to meet the massive demand for cannabis products, AFC Gamma is in a perfect position to cash in on the boom.
That’s why, after the AT&T dividend payout was cut, I wanted to make sure you knew about AFC Gamma Inc. (Nasdaq: AFCG).
It went public earlier in March and became only the second pure-play cannabis REIT to list on a major exchange.
AFC Gamma operates by providing cannabis operators access to loans and cash-flow-generating real estate assets. It originates and structures its loans, screens deals, and continuously reviews company performance, and ensures the loan covenants are met. The company targets lending with rates between 12% and 20%.
AFC Gamma has made 16 deals that went through to funding or commitment. These 16 deals were made with both privately and publicly held companies – including Nature’s Medicine, Curaleaf Holdings Inc. (OTC: CURLF), and Bluma Wellness.
An additional 29 deals are researched for possible funding.
As of this writing, AFC Gamma pays a dividend of $1.52, which is a yield of 6.7%.
It’s still a young company, but as we’ve seen with Innovative Industrial Properties Inc. (NYSE: IIPR), investors are hungry for pick-and-shovel plays on cannabis.
Innovative Industrial is another cannabis landlord, and its stock price opened at $20.25 on December 1, 2016.
As of today (May 18), IIPR is trading for $172.43, an increase of 751%.
Now, this isn’t an official recommendation to buy AFC Gamma. It’s only fair to share official recommendations with the paid-up members of my Cannabis Inner Circle.
But because you’re not going to hear too much about AFC Gamma from the mainstream finance world, I wanted to make sure it made it onto your radar.
To your investing success,
Partner, RADD Capital
2 responses to “Forget the AT&T Dividend: Here’s a Stock That Provides Yield (6.7%) and Price Appreciation”
May 19 2021