(0:30) - Lottery Fatigue: Is It Just Too Hard To Win? (10:30) - Can You Create A Lottery Stock Portfolio? (29:45) - Episode Roundup: PFE, XOM, C, EPD, INTC, CSCO Podcast@Zacks.com
Welcome to Episode #347 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is going solo to talk about the highs, and lows, of playing the lottery. Do you have lottery fatigue?
There have been 3 big million, and billion, dollar lottery payouts in the United States in just the last 6 months with the Powerball and Mega Millions posting 3 of the top 10 highest payouts ever.
But the odds are not in your favor. The odds to win the Powerball are one in 292 million but even just matching only the Powerball, which pays out $4, isn’t easy.
Forget the Lottery. Buy Stocks Instead.
However, what if you ditched the lottery and could create a “lottery win” by buying high dividend paying stocks? If you matched one number plus the Powerball number on the recent $747 million jackpot, you would have won $10 in Illinois.
What if you bought a few stocks and were able to get the $10 that way instead?
5 Stocks to Create Your Own Lottery Winning Stock Portfolio 1. Pfizer Inc. ( PFE Quick Quote PFE - Free Report)
Pfizer, the large drug company, is paying an annual dividend of $1.64 per share. In order to get your $10, you’d have to buy 6 shares of Pfizer, which will cost you about $260 at the time of this podcast. But lottery tickets cost money too.
Pfizer is yielding 3.7%.
2. Exxon Mobil Corp. ( XOM Quick Quote XOM - Free Report)
Exxon Mobil, the large integrated energy company, is paying an annual dividend of $3.64 per share. What if you wanted to make one of the larger Powerball payouts? 3 balls plus the Powerball number would have gotten you $125 in Illinois in the latest drawing.
To get the $125, you would need to buy about 35 shares of Exxon Mobil. That’s not going to be cheap. It’s going to cost you about $4000 to buy that many shares as Exxon Mobil is only yielding 3.25%.
Exxon Mobil has paid a dividend every year since 2008.
3. Citigroup ( C Quick Quote C - Free Report)
Citigroup is one of the largest banks in the United States. It has a higher yield than Exxon Mobil at 4%.
Citigroup is paying an annual dividend of $2.04. If you wanted the $125, you would need to buy about 62 shares of Citigroup. It would cost you less than Exxon, because of the higher yield, or $3,180.
Banks, like Citigroup, are finally paying some nice dividend yields. Don’t ignore the industry.
4. Enterprise Products Partners ( EPD Quick Quote EPD - Free Report)
What if you wanted to earn enough income to equal one of the bigger prizes? Matching 5 out of 6 balls, but no Powerball, would have gotten you $1300 in Illinois with the recent drawing. You may need to seek out bigger yields in an MLP like Enterprise Products Partners.
Enterprise Products Partners is paying an annual dividend of $1.96. But shares are trading around $25 so it has a yield of 7.6%.
To make $1300, investors need to buy about 663 shares of Enterprise Products Partners and it’s going to cost them around $17,000.
But imagine if you reinvested the dividend and bought even more shares? The next year, you’d get another 50 shares, or so and the dividend payout would be higher at nearly $1400.
Enterprise Products Partners has raised its dividend 24 consecutive years.
5. Intel Corp. ( INTC Quick Quote INTC - Free Report)
What about buying technology? Intel is currently paying an annual dividend of $1.46 per share which is yielding 4.8%.
But Intel’s earnings are expected to fall 62.5% in 2023. The Zacks Consensus Estimate for 2023 has fallen to $0.69 from $1.84 last year. That’s well under the dividend payout.
Is Intel too risky for those looking for income?
What Else do you Need to Know About Building an Income Portfolio?
Listen to this week’s podcast to find out.