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Generate $300 Annually: Strategy Suggests Investing $2,670 in High-Yield Stocks

  //stocks-investing.news-articles.net/content/202 .. ggests-investing-2-670-in-high-yield-stocks.html
  Published in Stocks and Investing on Tuesday, December 30th 2025 at 17:49 GMT by The Motley Fool

Seeking Safe Income? This Strategy Suggests Investing $2,670 in High-Yield Stocks to Target $300 Annually by 2026

The current economic climate has many investors seeking reliable income streams, particularly with inflation eroding purchasing power and interest rates fluctuating. A recent MSN Money article proposes a strategy for generating approximately $300 in annual dividend income by 2026 through an initial investment of $2,670 spread across three specific "ultra-high-yield" stocks. While the proposition is appealing, it's crucial to understand the underlying assumptions and risks involved before implementing this plan.

The Core Strategy: Targeting a Yield with Specific Stocks

The article’s central premise revolves around identifying companies offering significantly higher dividend yields than traditional savings accounts or bonds. The suggested yield target is approximately 11.3%, which, when applied to an investment of $2,670, would theoretically generate roughly $300 annually by 2026. The article emphasizes that this isn't a guaranteed outcome and relies on the continued payment of dividends at those rates.

The Three Stocks Highlighted (as of the Article’s Publication)

The three stocks specifically mentioned in the MSN Money piece are:

1. Enbridge (ENB): A Canadian multinational energy infrastructure company involved in transporting oil and natural gas. Enbridge's high yield is attributed to its stable cash flows derived from long-term contracts, making it relatively resilient to economic downturns. The article highlights that Enbridge’s dividend has a history of consistent increases, which is a positive indicator for income investors. You can find more information about Enbridge on their investor relations page [ https://www.enbridge.com/investors/ ].
2. Altria Group (MO): A leading tobacco company known for brands like Marlboro. Altria’s high dividend yield is a result of its mature business model and significant cash generation, despite declining cigarette consumption. The article acknowledges the ethical considerations surrounding investing in tobacco companies but frames it purely from an income-generating perspective. Altria's investor relations page can be found here: [ https://www.altria.com/investors/ ].
3. Realty Income (O): A real estate investment trust (REIT) that owns and operates a portfolio of commercial properties leased to various tenants. Realty Income is known for its monthly dividend payments, making it attractive to income-focused investors. The article points out that REITs are required to distribute a significant portion of their taxable income as dividends. You can learn more about Realty Income at [ https://www.realtyincome.com/investors ].

The Proposed Allocation & Timeline

The article suggests dividing the $2,670 investment roughly equally among these three stocks ($890 per stock). The projected timeline assumes that dividend yields remain consistent and that no significant adverse events impact the companies' financial performance. The $300 annual income target is based on current dividend rates; however, the article cautions that these rates can change.

Why High Yields Come with Risks: A Critical Perspective

While the prospect of a high yield is enticing, the MSN Money article touches upon (though perhaps not deeply enough) the inherent risks associated with such investments. High yields are often indicative of higher risk. Here's a breakdown of potential concerns:

• Dividend Sustainability: Companies offering exceptionally high dividend yields may be struggling financially or facing significant headwinds that could jeopardize their ability to maintain those payouts. A company might artificially inflate its yield by borrowing money to pay dividends, which is unsustainable long-term.
• Company-Specific Risks: Each stock carries unique risks. Enbridge faces regulatory and environmental challenges related to energy infrastructure projects. Altria's business model is inherently tied to a declining industry (cigarettes), and it’s facing increasing litigation risk. Realty Income is susceptible to economic downturns that could impact its tenants' ability to pay rent.
• Market Volatility: Stock prices fluctuate, impacting the overall return on investment. Even if dividends remain consistent, a significant drop in stock price can erode capital.
• Interest Rate Sensitivity: REITs like Realty Income are often sensitive to changes in interest rates. Rising rates can increase borrowing costs and potentially depress property values.
• "Value Trap": A high yield might be a "value trap," meaning the market is pricing the stock low because of underlying problems that haven't been fully resolved. The dividend may seem attractive, but the company’s future prospects are bleak.

Important Disclaimers & Considerations

This strategy presented in the MSN Money article should not be considered a guaranteed path to income. It is crucial for potential investors to:

• Conduct Thorough Research: Don't rely solely on one article or recommendation. Research each company’s financials, competitive landscape, and future prospects independently.
• Diversify Beyond Three Stocks: Investing in only three stocks concentrates risk significantly. A more diversified portfolio would include a wider range of asset classes and sectors.
• Consider Your Risk Tolerance: High-yield investments are generally considered higher risk. Ensure you understand your own risk tolerance before investing.
• Consult with a Financial Advisor: A qualified financial advisor can provide personalized advice based on your individual circumstances and goals.
• Dividend Rates Can Change: Companies can reduce or eliminate dividends at any time, impacting the income stream.

In conclusion, while the strategy outlined in the MSN Money article offers an intriguing approach to generating dividend income, it's essential to proceed with caution, conduct thorough due diligence, and understand the inherent risks involved. A high yield is not a substitute for sound financial fundamentals and prudent investment practices.