3 No-Brainer, High-Yield Stocks to Buy Right Now for Less Than $200

Investing in profitable companies when their stock prices offer high yields can be very rewarding over the long term. If you have a few hundred dollars that you don't need for reducing debt or covering other living expenses, there are solid companies offering tempting dividend yields right now. Realty Income(O 1.55%), Target(TGT -2.01%), and Philip Morris International(PM 0.34%) have dividend yields that are well above the S&P 500 average of 1.24%. Here's why three fool.com contributors believe they are smart buys for 2025 and beyond.

A forever stock ready for 2025
Jennifer Saibil (Realty Income): Realty Income is one of the best dividend stocks to own at any time, but 2025 could be an important year for the real estate industry in general, and Realty Income's business could be even stronger than usual. Realty Income is a real estate investment trust (REIT). This is a structure where companies pay out 90% of their earnings as dividends, which is why REITs are great dividend stocks. The typical setup is that they own properties and rent them out, usually to a specific sector. Realty Income is a retail REIT, and it leases properties to retail chains like Walmart and Home Depot.

Since it leases predominantly to high-quality tenants that sell essentials, it has demonstrated resilience throughout the last five years, starting with the pandemic and heading into the recent poor real estate climate. It has an occupancy rate of 98.7%, and it rarely dips below that. It has become one of the largest REITs in the world with more than 15,000 properties, and it grows through a mix of buying new properties and acquiring smaller REITs. It has a comfortable cash position to keep that up and has identified plenty of new targets to expand and fund its dividends.

There are several reasons why Realty Income is one of the best REITs out there. One is the strength of its business. A great dividend stock starts with a well-established business. Other features to add on top of that are a long track record of increases, reliable payments, and a high yield. Realty Income has paid a dividend for 654 consecutive months, and it has raised it for 109 consecutive quarters. It is one of the few companies that pay a monthly dividend, an extra feature that makes it even more attractive. The dividend yields 5.9% at the current price, well above the S&P 500 average, and higher than many REITs.

Often, when a REIT's dividend yield gets very high, it's a red flag and implies risk. Realty Income's stock is down on consumer pessimism about the real estate industry, but it's managing effectively through the turbulence. The yield is usually high, but it's higher than average due to short-term concerns. This is more than an opportunity to buy on the dip, which investors shouldn't miss. It's an opportunity to buy an excellent, all-weather stock that pays a high yield rain or shine, and every month to boot.

Target has paid a dividend for over 50 years
John Ballard (Target): Cautious consumer spending has hit many retailers, including Target, over the last year. A cautious shopper and other cost pressures resulting from port strikes have weighed on Target's business and stock performance. For a long-term investor focusing on dividends, it's a good buying opportunity. Target has paid a dividend since 1967, which speaks volumes about the strength of its retail operation.

The shares currently offer an attractive 3.24% forward dividend yield at a share price of $138, yet the company only pays out 47% of earnings in dividends. This suggests Target can maintain and grow its dividend for years to come. People will be in a spending mood again. To its benefit, Target is still seeing positive traffic to its stores, but a 2% decline in average ticket prices dragged down its comparable-store sales, which grew only 0.3% year over year last quarter. Management cited weakness in apparel and home categories, but this should set up a growth opportunity when the economy improves.

Over the long term, Target should benefit from its focus on exclusive products through partnerships and growing sales through its Target Circle 360 program, which helped drive nearly 20% growth in same-day delivery last quarter. Overall, Target's history of paying dividends, growing earnings, and delivering value to shoppers should provide growing passive income to shareholders for many years.

This dividend stock is smoking hot
Jeremy Bowman (Philip Morris): If you've got less than $200 to invest in the stock market, and you're looking for a dividend stock to buy, I can think of few better options than Philip Morris. The tobacco stock has outperformed top rivals like Altria and British American Tobacco by successfully pivoting to next-generation products like iQOS heat-not-burn tobacco sticks and Zyn nicotine pouches, which it gained in its 2022 acquisition of Swedish Match. In fact, next-gen products now make up nearly 40% of the company's revenue.

Driven by strong growth in those categories and 11% earnings growth in the fourth quarter, Philip Morris stock jumped 11% in a single day in late January. The company's strong performance has been driven by its ability to adapt to changing consumer preferences and regulatory environments. Its next-gen products have been particularly successful in markets like Japan, where iQOS has a 15% share of the tobacco market, and the U.S., where Zyn has a 10% share of the nicotine pouch market.

Philip Morris' dividend yield is not explicitly stated in the provided information, but it is mentioned that the company is a great dividend stock with a strong track record. Its dividend growth has been steady and reliable, and its payout ratio is reasonable, indicating that the dividend is well-supported by the company's earnings. Philip Morris' dividend growth has been driven by its strong earnings growth and its ability to return capital to shareholders through share buybacks and dividends.

In conclusion, Realty Income, Target, and Philip Morris are three no-brainer high-yield stocks to buy right now for less than $200. Each company has a strong track record of dividend growth, a high yield, and a solid business model that supports its dividend. Investors looking for income and growth should consider adding these stocks to their portfolios.