Got $1,000? This Dividend Stock Could Fund Your Coffee Habit for Life.
Key Points
At the low end, the average person drinks $11 in coffee each month.
A $1,000 investment in AGNC Investment could generate enough monthly income to offset that expense.
- 10 stocks we like better than AGNC Investment Corp. ›
If you're like me, you can't go a day without coffee. Turning on the coffee maker is usually one of the first things I do in the morning. All that coffee really adds up over the year.
What if I told you that you could potentially fund your coffee habit for life for around $1,000? Here's one high-yielding dividend stock that could generate enough income to buy you a lifetime of coffee in the morning.
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A different kind of drip
The cost of coffee ranges widely. A specialty brew at your local coffee shop can cost more than $6 per cup these days. Have one of those a day, and you're going to spend about $2,200 a year. However, if you brew your coffee at home, the cost is typically $11 to $20 per month, depending on what you buy and how often you have coffee.
It only takes about $1,000 to fund the low end of the average person's annual at-home coffee habit with the right dividend stock. For example, AGNC Investment (NASDAQ: AGNC), a real estate investment trust (REIT) that invests in residential mortgages, currently yields 13.3%. That's a monster yield, as the S&P 500 currently yields only around 1%. At AGNC's rate, a $1,000 investment would generate about $133 in annual dividend income, or a little over $11 per month (AGNC pays a monthly dividend).
AGNC has a solid record of paying dividends. It just notched its 75th straight monthly dividend at its current rate. The REIT believes it's in a solid position to sustain its dividend in the current environment.
Now, to be fair, AGNC Investment is a higher-risk dividend stock (it has cut its dividend before). It also likely won't increase its dividend, meaning this income won't keep pace with inflation. That's a potential problem given that coffee prices have surged 47% over the past five years, according to the Consumer Price Index. However, AGNC's monster dividend could allow you to fund at least some of your coffee habit.
Should you buy stock in AGNC Investment Corp. right now?
Before you buy stock in AGNC Investment Corp., consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AGNC Investment Corp. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
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Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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