Do Marijuana Stocks Pay Dividends?

The majority of marijuana stocks are penny stocks that don't pay dividends, as cannabis companies need to use all of their revenue to build their businesses. However, we've found two multibillion-dollar companies that are becoming essential to the marijuana industry without ever selling a plant...

And both companies pay dividends with yields over 2%.

Over the last 12 months, one of these stocks has climbed 16.85%, and the other has climbed 23.96%. In comparison, the Dow Jones Industrial Average is up 18.82%.

marijuana stocksYes, we know that may not sound impressive at first. But these are multibillion-dollar companies flying under the radar in the cannabis industry. That means you get exposure to the marijuana market without the risk associated with penny stocks, plus you get the dividend payouts.

And over the last 20 years, shareholders who reinvested the dividends in these stocks have booked triple-digit returns as large as 886%.

If you missed out on those gains, that's okay. These triple-digit winners are expected to keep growing as they enter the marijuana industry, and shareholders who reinvest their dividends will make even more money...

How Two Marijuana Stocks with Dividends Climbed Over 500%

If you invested $10,000 on Dec. 31, 1997, in the first stock we're about to talk about and didn't reinvest the dividend, your shares would be worth $53,146.11 as of Aug. 9, 2017.

However, with dividend reinvestments, you would have netted a return of $66,718.25. That's an extra $13,572.14 in your account and an overall gain of 567% from your original investment.

And the returns of the second stock have been even more staggering...

The Best Pot Stocks: After months of research, we've found the most lucrative and fastest-growing legal pot stocks in America. And for a limited time, you can get all the details for free. Learn more...

Without reinvesting the dividends, a $10,000 stake invested in this next company on Dec. 31, 1997, would now be worth $79,096.10. Not bad, but with dividend reinvestments, those shares would now be worth $98,673.22.

That's an extra $19,577.12 in your account and an overall gain of 886%.


Here's How DRIPs (Dividend Reinvestment Programs) Work

Each company still pays shareholders a dividend yield of over 2%, and the stock prices for both are expected to climb an average of 16.48% in the next 12 months.

And that growth could be even bigger as the marijuana industry doubles in size. The cannabis industry is expected to grow from $6.7 billion in legal sales in the United States in 2016 to over $20 billion by 2020.

That's why you need to own these two backdoor pot stocks right now in order to maximize your profit potential...

The Top Marijuana Stocks with Dividends to Own for Long-Term Gains

[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

Our first stock pick is Microsoft Corp. (Nasdaq: MSFT). Microsoft is one of the best-known tech companies in the world.

I know what you're thinking: Microsoft is a tech giant. Over 400 million devices run Windows 10, and Microsoft Office has been downloaded 340 million times on iPhones, iPads, and Android devices.

But Microsoft's advanced cloud technology will help investors profit from the cannabis industry without the speculative risk of a penny stock.

Microsoft is a leader in the cloud computing market, with $6.7 billion in revenue from its Azure cloud service in Q3 2017. And cloud computing is going to be essential for the marijuana industry.

In June 2016, cannabis compliance firm KIND Financial partnered with Microsoft to run its software through Microsoft's cloud.

"I think 2017 is going to be the year where things really pull together," Money Morning Director of Technology & Venture Capital Research Michael A. Robinson said on CNBC World on Jan. 4, 2017.

KIND uses technology to track marijuana plants from "seed to sales." Cannabis growers will register each plant they grow with the state government, as well as the sale of each marijuana bud from the plant.

This ensures dispensaries are compliant with local and state laws, and the need for KIND's services - or others like it - is only going to increase as states legalize marijuana. It's a matter of "when" and not "if" the United States completely legalizes medical marijuana, as 29 states and the District of Columbia have some form of legal marijuana laws.

And as local governments turn to KIND to help regulate the cannabis industries in more states, cloud computing services from Microsoft will expand.

There is no information on Microsoft's revenue from KIND or other marijuana companies. But by 2018, MSFT expects to generate $20 billion in commercial cloud revenue alone.

And because of Microsoft's long list of products and services, investment bank Griffin Securities is bullish on the MSFT stock price.

In the next 12 months, Griffin projects the MSFT stock price will climb to $90 per share. From today's opening price of $72.25, that's a potential profit of 24.56%.

On top of that projected price climb, Microsoft stock also pays a dividend of $0.39 per share, which is a yield of 2.16%.

The second pot stock with a dividend on our list is Scotts Miracle-Gro Co. (NYSE: SMG).

Scotts is known for being a leader in lawn care and gardening since 1868, but Scotts is now expanding to the marijuana industry...

When the economy was growing in the early 2000s, retailers like Home Depot Inc. (NYSE: HD) and Wal-Mart Stores Inc. (NYSE: WMT) were expanding their locations. Because each store carries Scotts' products, Scotts' revenue climbed 80% between 2001 and 2009.

But after the financial crisis of 2008 and 2009, Wal-Mart and Home Depot stopped expanding and shut down stores.

That left Scotts' revenue stagnant.

So in order to boost sales, CEO Jim Hagedorn made what some consider a controversial decision: He invested in the marijuana industry.

In 2015, Hagedorn purchased two companies that specialize in soil and fertilizer for cannabis growers. In July 2016, he also invested a 75% stake in Gavita International, a hydroponics equipment company.

And it appears Hagedorn's forward-thinking decision is paying off...

As of December 2016, Scotts' hydroponics business generated roughly $250 million annually, according to Bloomberg. That number will continue to climb as more states legalize medical and recreational marijuana...


Which States Will Legalize Marijuana Next?

According to Money Morning Director of Technology & Venture Capital Research Michael A. Robinson, the value of the hydroponically grown plants market is skyrocketing.

The global crop value of hydroponically grown plants is expected to climb from $17 billion in 2013 to $24 billion by 2018.

That's a 41% increase in just five years.

Over the next 12 months, Great Lakes Review, a division of financial firm Wellington Shields, has a one-year price target of $104 for the SMG stock price. From today's opening price of $95.93, that's a potential profit of 8.41%.

SMG also pays shareholders a dividend of $0.53 per share for a yield of 2.21%.

The Bottom Line: Most marijuana stocks are penny stocks and don't pay shareholders dividends. But Money Morning readers can still profit from the cannabis industry by owning shares of MSFT and SMG. And by reinvesting the dividends paid out by these two companies, Money Morning readers can significantly increase their wealth over time.

Editor's Note: One of the fastest-growing tech investment segments is... cannabis? Yes, you read that right. A high-tech approach to cultivating this ancient plant - that's already legal to use in more than half of 50 states - is generating a multibillion-dollar investment opportunity for early investors. Click here to find out more, including how you can get your copy of Michael Robinson's Roadmap to Marijuana Millions. Packed with more than 30 great companies to buy, it's fast becoming "the weed investor's bible." Check it out...

Follow Money Morning on Facebook, Twitter, and LinkedIn.