A one-size-fits-all investment strategy doesn't exist, and this is wonderful because it means investing allows for plenty of flexibility. Some investors will win with an aggressive growth portfolio, while others may reach success with a focus on safe stocks that generate passive income. But there is one investment that could find its spot in any portfolio -- and during any market environment.
I'm talking about stocks that bring you both dividends and growth. In a bull market, they may excel and offer your portfolio a boost, and investors appreciate their dividend payments any time. This passive income adds to gains during good times and limits losses during tough markets.
Where do you find these players? Though the technology industry generally isn't known for its dividends, you actually should look here for the valuable combination of passive income and growth. Many growth companies that have developed into market giants today have the financial strength to continue funding their growth -- and reward shareholders through dividend payments. Let's check out two of these top stocks that you won't regret buying.
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1. Apple
Apple's (NASDAQ: AAPL) earnings have climbed over time thanks to its hardware, a selection of popular products -- from the iPhone to the Mac -- that have kept customers coming back for the latest versions year after year. This brand strength offers Apple a solid moat that's proven itself over time. Last year, Apple garnered the top-7 positions in Counterpoint Research's list of the 10 best-selling smartphones. This was a first for Apple, showing this well-established company still is generating growth.
On top of this, two other elements should add to Apple's growth in the coming months and years. The company's services businesses -- including subscriptions such as cloud storage or digital content -- have been generating record revenue levels. And, even better, services are higher margin than hardware, so they can be highly profitable for Apple. The second growth driver ahead should be Apple's new focus on artificial intelligence (AI). The company is set to release a suite of AI tools, known as Apple Intelligence, later this year throughout its devices.
All of this confirms Apple's reputation as a growth company. But what about dividends? Apple pays an annual dividend of $1 per share, which using the July 16 closing price of about $234, results in a dividend yield of 0.4%. Though this is lower than the S&P 500 dividend yield of 1.3%, that's OK. Many higher-yield stocks aren't delivering the growth you'll get with Apple.
Today, you'll pay 35 times forward-earnings estimates for Apple, a reasonable price for this solid, long-term player.
2. Meta Platforms
Meta Platforms (NASDAQ: META) is new to the world of dividends. The social media powerhouse announced its first-ever payment earlier this year, making now a great time to get in on the action.
Of course, like with Apple, you won't be getting a high-yield investment with Meta. The company pays an annual dividend of $2 per share, and using the July 16 closing price of about $489, this gives a dividend yield of 0.4%. But this passive income, along with Meta's growth prospects, makes it an investment that could significantly boost your portfolio over time.
Speaking of growth, Meta is a company that's demonstrated its earnings capabilities year after year. The company generates most of its revenue through advertisers across its range of social media apps -- from Facebook and Messenger to Instagram and WhatsApp. This has resulted in billions of dollars in revenue and net income in recent years.
Also like Apple, Meta has built a solid moat. Users won't easily switch to other social media platforms because they know it will be difficult to maintain all of their contacts if they do so. After all, more than 3.2 billion people worldwide use at least one of Meta's social media apps every day.
Meta isn't standing still and admiring its leadership though. Instead, this company is investing in AI to make its social media platforms even better. If Meta wins this bet, users may spend even more time on its apps -- and that could prompt advertisers to spend even more on Meta to reach their target audiences.
Right now, you can pick up shares of Meta for only 24 times forward-earnings estimates -- a steal considering the company's growth prospects and the passive income you can pick up along the way.
Should you invest $1,000 in Apple right now?
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Meta Platforms. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
