United Parcel Service's management is telling investors that the inflection point in its turnaround effort is at hand.
Clorox's CEO is departing for medical reasons, but the company has revamped its portfolio and bought an attractive business.
Realty Income has built a broad platform, giving it multiple avenues for growth.
The SpaceX (Nasdaq: SPCX) IPO has captured the world's attention, but it isn't the only stock worth knowing about. In fact, with the S&P 500 index (SNPINDEX: ^GSPC) trading near all-time highs, popular stocks like SpaceX may not be as compelling as unloved companies like United Parcel Service (NYSE: UPS), Clorox (NYSE: CLX), and Realty Income (NYSE: O). Here's why you may want to ignore hot stocks and focus on these dividend payers instead.
United Parcel Service is in the middle of a turnaround. It hasn't been easy or pretty, at least financially speaking. Management has been focused on cutting costs, increasing its use of technology, and leaning into its most profitable business lines. From a big-picture perspective, that has meant increased investment and reduced revenues and earnings. Investors don't like that, and the stock has cratered.
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However, at the end of 2025, UPS made a bold call: 2026 would be the inflection point. The first half would continue the downtrend in revenues and margins, but the second half would see an upturn. The full year is expected to be about flat with 2025, but the key is that business results will finally start improving. The industrial company's CEO again backed that outlook when it reported first-quarter earnings.
The stock has a lofty 6% dividend yield, and if the business turns as planned, it is likely to hold. If you buy now, you can lock in that yield and perhaps ride the stock higher as investors reward the company for its turnaround progress.
Clorox was a Wall Street darling during the coronavirus pandemic because of its heavy focus on cleaning products. When the world learned to live with COVID, however, investors dumped the stock. Things got worse as post-pandemic inflation hit margins, and the company's computer systems were hacked. And while all of this was happening, Clorox was also rejiggering its portfolio to weed out underperforming product lines.
With inflation on the rise again and consumers tightening their budgets, Wall Street has continued to punish Clorox's stock. The yield is near historical highs at 5%. As if that weren't enough, the company's well-respected CEO is stepping down for medical reasons. But she has left the company with a catalyst because her last big move was the acquisition of Gojo.
Gojo makes Purell hand sanitizer, which is the leading brand in that space. It aligns well with Clorox's consumer staples portfolio and enables it to expand further into the business-to-business market. While debt will rise for a while, the growth opportunity remains attractive. And for investors who think long-term, this consumer staples maker's high yield could be the perfect addition as it sets itself up to get back on the growth track.
Of the three stocks here, Realty Income is probably going to be the most attractive to conservative investors. It has a lofty 5.2% yield, backed by a large, diversified portfolio of rental properties. Reliably paying dividends is so important to Realty Income that it trademarked the nickname "The Monthly Dividend Company."
With a gigantic portfolio of over 15,500 properties spread across North America and Europe, this is not a growth story. It takes a lot to move the needle here. However, slow and steady is very attractive when it comes along with a 5.2% yield. And Realty Income is laser-focused on ensuring it can continue to pay and grow that dividend. Notably, it has been expanding its business into new areas, including institutional asset management and loans, as well as adding new property types (such as data centers and casinos).
While this real estate investment trust (REIT) is likely to be very boring, that's actually the reason to buy it. It is a perfect fit for conservative income investors, but it could also provide a risk balance for those willing to buy riskier income stocks like UPS.
It increasingly appears like investors are only focused on the biggest and flashiest stocks. That's left solid turnaround stories like UPS and Clorox to languish, despite attractive yields and increasingly attractive businesses. Even boring, reliable, high-yield stocks like Realty Income seem to be unloved. All three are worth getting to know, and perhaps loading up on, while other investors are fawning over Wall Street darlings like SpaceX.
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Reuben Gregg Brewer has positions in Clorox and Realty Income. The Motley Fool has positions in and recommends Realty Income and United Parcel Service. The Motley Fool has a disclosure policy.