The S&P 500 index (SNPINDEX: ^GSPC) is currently offering a roughly 1.2% yield. That’s pretty miserly. You can get 4.2% from Toronto-Dominion Bank (NYSE: TD). And 5.5% from Realty Income (NYSE: O). Or even 7.2% from Alexandria Real Estate (NYSE: ARE). Each one of these high yielders is trading for less than $100 a share, but are they worth buying right now? Here’s what you need to know.
1. Toronto-Dominion Bank is under an asset cap
TD Bank, which is the more common name for Toronto-Dominion Bank, got in trouble with U.S. regulators when it was discovered that the company’s U.S. business was used to launder money. The lingering negative is that TD Bank’s U.S. bank is under an asset cap. That effectively means that it can’t grow the U.S. business until regulators are happy with its new controls around money laundering. The U.S. business was expected to be TD Bank’s growth engine and Wall Street is not happy.
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That’s reasonable, but TD Bank’s large Canadian business is unaffected. Also unaffected is the bank’s investment arm. So growth will continue, it will just be a bit slower than many investors had expected. That’s why the stock is still down nearly 20% from its 2022 highs (before the regulatory issues). And the stock’s 4.2% yield is still fairly attractive, relative to other banks and historically speaking.
That said, Wall Street is starting to catch on that the situation isn’t nearly as bad as it first seemed, so the stock has been rallying. You can still catch TD Bank while its yield is toward the high end of its historical range. The shares are trading in the $70 range, well below $100.
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2. Realty Income is a slow and steady giant
Realty Income is the largest net lease real estate investment trust (REIT). A net lease requires tenants to pay for most property-level operating costs. Although any single property is high risk, across a large enough portfolio the risk is actually pretty low. With over 15,600 properties in its portfolio, Realty Income’s risks are very well diversified. That’s helped along by the fact that it invests in retail, industrial, and other assets (notably including casinos and data centers). And its portfolio is spread across the United States and Europe.
At this point, Realty Income has increased its dividend annually for 30 consecutive years. It has a well-proven track record as a reliable dividend stock. What it doesn’t have a track record of is rapid growth. Over that 30-year period the dividend has increased at about a 4% compound annual rate. That’s not bad, given that it out distances inflation, but Realty Income is really a slow and steady tortoise. The attractive 5.5% dividend yield is likely to make up a very large portion of your total return. The stock is trading around $58 a share.
3. Alexandria Real Estate is a turnaround story
Alexandria Real Estate is a healthcare REIT, with a tight focus on the medical research space. This is a very specific type of property that mixes offices with scientific labs. Alexandria is an industry leader in the sector, having spearheaded the development of research clusters. That just means that it owns a lot of properties in close proximity to each other and, most importantly, in areas where biomedical research is a key industry. Like any business, however, Alexandria goes through both good and bad times.
Right now Alexandria’s performance has been weak as of late. That’s highlighted by first quarter 2025 occupancy of 91.7%, down from 94.6% at the start of the year. It is highly likely that the REIT works through this period and gets occupancy levels back up again. But the really telling fact is that adjusted funds from operations (FFO) still easily covered the first quarter dividend, with an adjusted FFO payout ratio of 57%. There’s a lot of room for adversity before a dividend cut would be likely here. If you handle investing in a contrarian way, Alexandria’s approximate $72 share price has dipped well below the $100 level, pushing the yield up to a very attractive 7.2%.
There are plenty of high-yield options right now
While $100 may not seem like a lot of money, it can get you in the door with some very attractive high-yield stocks. TD Bank, Realty Income, and Alexandria are all well-run companies. Even though TD Bank and Alexandria are currently dealing with some difficulties, they are both worth a deep dive for conservative investors. And Realty Income is the kind of foundational income investment that dividend investors buy just so they can opportunistically invest in stocks like TD Bank and Alexandria.
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Reuben Gregg Brewer has positions in Realty Income and Toronto-Dominion Bank. The Motley Fool has positions in and recommends Alexandria Real Estate Equities and Realty Income. The Motley Fool has a disclosure policy.
