Investor Earning $118,000 A Year In Dividends Reveals Top 6 Stock Picks – 'Compounding Is an Amazing Thing'

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Dividend stocks are gaining attention as investors look to diversify their portfolios amid market volatility and concerns over a potential AI bubble. A Hartford Funds study showed that companies paying dividends have historically outperformed non-dividend stocks during market downturns.

Last month, someone asked a Reddit community of dividend investors about their income, investing strategies and portfolio details. The question received over 180 comments, with many Redditors sharing their dividend income details and insights.

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A Redditor said that he was earning about $118,000 per year in dividends on a portfolio worth about $1 million. He mostly invests in business development companies, master limited partnerships, real estate investment trusts and closed-end funds.

"Compounding is an amazing thing," he said. "I'm seeing it work its magic now as I near retirement. The returns I get from my investments are now higher than my income from my businesses."

Let's take a look at some of the top holdings in the portfolio based on the details shared by the investor on the social media platform.

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Alternative Access First Priority CLO Bond ETF

Alternative Access First Priority CLO Bond ETF (NYSE:AAA) is one of the top holdings of the investor. The fund invests in AAA-rated securities, representing the highest credit quality. It has a divided yield of about 5%.

Energy Transfer LP

Energy Transfer (NYSE:ET) is a midstream energy company with a dividend yield of about 7.8%. The stock is down 15% so far this year. In September, Scotiabank started covering the stock with a Sector Outperform rating and $23 price target.

Putnam BDC Income ETF

The Putnam BDC Income ETF (NYSE:PBDC) provides investors with exposure to business development companies. It yields about 9%.

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Eagle Point Income

Eagle Point Income (NYSE:EICC) invests in junior debt tranches of collateralized loan obligations. It has a dividend yield of about 8% and pays monthly.

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Reaves Utility Income Fund

Reaves Utility Income Fund (NYSE:UTG) is a dividend ETF investing in utilities and essential infrastructure-related companies. Some of the top holdings of the fund include Talen Energy (NASDAQ:TLN), Vistra Corp (NYSE:VST), CenterPoint Energy (NYSE:CNP), and Mp Materials (NYSE:MP), among others.

Cohen & Steers Real Estate Opportunities & Income Fund

Cohen & Steers Real Estate Opportunities & Income Fund (NYSE:RLTY) primarily invests in real estate securities, including REITs, preferred stocks, and bonds. It has a monthly distribution rate of about 8%.

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This article Investor Earning $118,000 A Year In Dividends Reveals Top 6 Stock Picks – 'Compounding Is an Amazing Thing' originally appeared on Benzinga.com

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