The Smartest Dividend Stock to Buy With $1,000 Right Now
Dividend stocks that reliably increase their dividends are the perfect pick for income investors.
Buying reliable dividend stocks when they have historically high yields is ideal.
Universal Health Realty Income Trust's 7.4% dividend yield is near the highest levels of the past decade.
10 stocks we like better than Johnson & Johnson ›
If you are a dividend investor looking to maximize the income your portfolio generates, you will want to do a deep dive on Universal Health Realty Income Trust (NYSE: UHT). It has a historically high 7.4% dividend yield and a great track record of dividend growth to back it up. The dividend stock won't be right for every income investor, but for a select few it could be the smartest dividend stock to buy right now.
What makes a dividend stock attractive?
One of the first things that income investors look for is dividend yield. Universal Health Realty Income Trust has that factor pegged, with a huge 7.4% dividend yield. But some reference points will help.
The S&P 500 (SNPINDEX: ^GSPC) has an itty bitty yield of 1.3%. The average healthcare stock has a yield of 1.8%. And the average real estate investment trust (REIT) has a yield of roughly 4.1%. Very clearly, Universal Health Realty is more attractive on the yield front.
But yield has to be considered along with reliability. For example, one of the most reliable dividend-paying healthcare stocks is Johnson & Johnson (NYSE: JNJ), with 63 years of annual dividend hikes behind it. Next up is Becton, Dickinson (NYSE: BDX), with 53 years of hikes. Those two companies are Dividend Kings, an elite status that Universal Health Realty simply can't claim. That said, Johnson & Johnson's yield is 3.4% and Becton, Dickinson's yield is an even smaller 2.4%.
Universal Health Realty's dividend has been hiked annually for four decades. That's a pretty good streak, even though it isn't yet a Dividend King, when you add in the real estate investment trust's huge yield. A $1,000 investment will get you around 24 shares of the healthcare-focused REIT.
Universal Health Realty Trust is for income right now
So a lofty yield and a strong dividend history make Universal Health Realty Trust attractive. It is extra attractive right now because the yield is near the highest levels of the past decade, suggesting the stock is on the sale rack. But there's just one small problem: Dividend growth has never been a big selling point here.
As the chart above highlights, both JNJ's and Becton, Dickinson's dividend growth has been far superior to that of Universal Health Realty Trust. The goal for Universal Health Realty Trust isn't rapid dividend growth, it is reliable growth. It is a slow and steady tortoise, and that is likely all it will ever be.
And that brings up the second big issue that investors need to know about. Universal Health Realty Trust is externally managed by Universal Health Services (NYSE: UHS), the REIT's largest tenant. There are very clear issues with conflicts of interest that have to be considered. However, the 40-year track record of slow and steady dividend growth is an indication of what Universal Health Services is doing here.
More attractive than it was, not for all, but smart for some
The interesting thing here is that prior to the coronavirus pandemic, Universal Health Realty's dividend yield was a tiny 2.1% or so. At that point, investors were way too optimistic about the REIT given the tortoise-like nature of the dividend. But, today, with the yield at 7.4%, this healthcare stock is a lot more attractive.
It won't be right for every dividend investor, given the management structure and that tortoise-like dividend growth. For dividend growth investors, JNJ or Becton, Dickinson will be more appropriate. However, if you are trying to maximize the income you generate from your portfolio today and you are looking for a healthcare investment, Universal Health Realty Trust could be perfect for your portfolio if you have $1,000 or $10,000 to invest.
Should you invest $1,000 in Johnson & Johnson right now?
Before you buy stock in Johnson & Johnson, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Johnson & Johnson wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!*
Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 15, 2025
Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
The Smartest Dividend Stock to Buy With $1,000 Right Now was originally published by The Motley Fool
Fehler beim Abrufen der Daten
Melden Sie sich an, um Ihr Portfolio aufzurufen.
Fehler beim Abrufen der Daten
Fehler beim Abrufen der Daten
Fehler beim Abrufen der Daten
Fehler beim Abrufen der Daten
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Forbes
2 minutes ago
- Forbes
Credit Cracks Are Now Fractures: The Next Phase Is Here
stack of multicolored credit cards on black background Credit Cracks Are Spreading: Rising Delinquencies And Recession Signals To Look Out For In 2025. In earlier pieces, I focused on what most of Wall Street had been overlooking. Mortgage delinquencies were the first signal. Then came auto loan defaults, reaching a 15-year high where even subprime borrowers began missing payments on the one item that often determines employment: their vehicle. Credit cracks are appearing. These weren't isolated issues. They marked a shift from stretched to strained across consumer credit. Now that strain is expanding steadily and across layers of the market. And still, most investors aren't pricing it in. Credit stress doesn't erupt. It spreads. We've moved from warning signs to a broader spillover. Repricing is the next phase and it's already in motion. Credit Is Weakening From The Middle This is no longer just about subprime risk. A Bankrate report shows credit card balances have jumped over 50% since early 2021. But more telling is who's under pressure now. Prime borrowers with strong credit and stable income are starting to slip. Experian's Q3 2024 data reports that while average FICO scores remain at 715, monthly non-mortgage debt payments have climbed 5.2% year-over-year. That tension is showing up in student loans and other floating-rate debt. Buy Now, Pay Later platforms are adjusting. Klarna, Affirm, and Afterpay are shortening repayment terms and tightening approval standards. They're reacting to real-time data from their own books. Stress is moving up the credit curve, and the signs are visible. Lending Standards Are Tightening Fast Defaults are rising and lenders are pulling back. That much is expected. What stands out now is how early and broadly this retrenchment is happening. Regional banks, still vulnerable after the SVB collapse, are quietly retreating from consumer credit. The Fed's latest Senior Loan Officer Survey shows tightening across personal credit, auto loans, and cards. Fintech lenders dependent on securitization see funding slow as ABS market appetite weakens. In some cases, new loan originations have stalled altogether. Consumer loan growth has gone flat. In certain sectors, it's shrinking. When credit access disappears, risk spikes, not always due to income loss, but from the absence of rollover liquidity. Liquidity is vanishing. And as it dries up, consumer behavior turns fast. Earnings Will Show The Stress The numbers are about to reflect what the data has already been suggesting. Starting in Q3 and continuing through Q4, we'll likely see pressure in three key areas: Retailers will also feel it, especially those exposed to private-label credit. Think Best Buy, Target, or any business with embedded financing models. The Risk Is Micro, Not Macro Despite mounting signals, investor positioning hasn't changed much. Regional banks still trade at 1.2–1.4x tangible book. Consumer lenders remain priced for smooth conditions. Auto ABS spreads remain tight, even as default risk increases. The disconnect lies in the story markets are telling themselves. Wages are stagnant. Pandemic savings are exhausted. Credit growth is stalling. But investor optimism hasn't caught up to this reality. It's about slow erosion through liquidity withdrawal and shifting consumer behavior. By late 2023, we saw early signs: rising balances, spending fatigue, and payment slippage. Now we're in the broader stress phase: credit cards, auto loans, BNPL, and even prime borrowers are under pressure. Next comes institutional reaction: reserve builds, risk repricing, and M&A among overstretched lenders. Where Dislocation Creates Opportunity When data and narrative diverge, opportunity emerges. How To Protect Yourself The popular narrative that the consumer is fine is already outdated. Behavior is shifting. Defaults are spreading. Liquidity is contracting. Markets haven't priced it in yet. But the repricing phase is underway. This is a moment for positioning, not reaction. The advantage belongs to those who act early while others are still watching lagging indicators. The credit cracks are widening. And those who are tracking the underlying behavior already know what's next.
Bloomberg
2 minutes ago
- Bloomberg
China Stops US Commerce Worker From Leaving Country, Media Say
China has stopped a US citizen who works for America's Commerce Department from leaving the nation for several months, according to media reports, an episode that comes as Beijing and Washington try to arrange a leaders' summit so they can address their differences on trade. The Chinese-American individual who works for the Patent and Trademark Office had traveled to the Asian nation to meet relatives, the Washington Post reported, citing four people familiar with the matter. The newspaper said it didn't know the name of the man facing a so-called exit ban, adding that the incident was over a failure to disclose on a visa application that he worked for the US government.
Fox News
22 minutes ago
- Fox News
Chiefs, Defensive End George Karlaftis Agree to 4-Year, $93 Million Contract
The Kansas City Chiefs and defensive end George Karlaftis have agreed to a four-year, $93 million contract that includes $62 million guaranteed, a person familiar with the negotiations told The Associated Press on Sunday. The person spoke on condition of anonymity because the deal, which locks up one of the Chiefs' best young defensive players on the same day that they report to training camp at Missouri Western, is still pending a physical. It is the second high-profile contract that Chiefs general manager Brett Veach has finished off in the past week. He signed Pro Bowl right guard Trey Smith to a four-year, $94 million extension on Tuesday. Karlaftis, a first-round pick in 2022, has started 44 of his 49 regular-season games for the Chiefs. His best season came two years ago, when he had 10.5 sacks while starting every game. He had 8.0 sacks in 16 games last season. Karlaftis has appeared in the Super Bowl every season, winning the first two and losing to Philadelphia in February. Reporting by The Associated Press. Want great stories delivered right to your inbox? Create or log in to your FOX Sports account, follow leagues, teams and players to receive a personalized newsletter daily!
