Dividend stocks are geared towards traditional long-term investors, looking to boost their stream of income while maintaining a low-risk profile. When it comes to passive income, nothing beats dividend stocks especially at a time when the market is showing signs of trading higher after an impressive 2017.
In an era where there are plenty of companies offering dividends, it can be overwhelming to make a choice on which dividend stock to go with. The best dividend stocks can anchor one’s investment portfolio and offer peace of mind during wild market cycles.
High paying dividend stocks offer high yields in the excess of 4% with some as much as 10% or more. However not all high yield dividend stocks are goodthus important to balance, yield and risk profile for a better outcome.
Contrary to perception, high dividend stocks are not just for retirees looking to generate a safe income. Anyone looking for a reliable stream of income can invest in these stocks.
Jonson & Johnson: 2.4% Dividend Yield
Johnson & Johnson has been able to outperform the overall industry over the years and in the process generated significant returns to investors. A 54-year streak of raising dividends all but affirms its position as a top and reliable dividend paying stock.
The healthcare and consumer conglomerate offers a fair 2.4% dividend yield, which is always guaranteed. In case of any tepid growth, the company is known to engage in mergers and acquisition in a bid to strengthen its market position and thus generate more shareholder value.
The company’s payout ratio stood at 44.74% for the past 12 months and has a dividend growth rate of 6.71%.
Store Capital: 5.3% Dividend Yield
Store Capital is a perfect stock for income-focused investors given that it yields 5.3% on the dividend front. The Real estate investment trust is an attractively-priced income vehicle that counts Warren Buffett as one of its investors.
The company increased its dividend offering from $0.25 as of 2015 to $0.31 last year, a trend expected to continue at the back of a booming property industry.
American Agency Corporation: 20.4% Dividend Yield
American Agency Corporation boasts of a 20.4% dividend yield making it one of the biggest returnees of shareholder value. 31 exchange traded funds currently hold positions in the company. In February, the company announced a cash dividend payment of $0.18 per share, paid on March 8, 2018.
The divided offering marked the 19th quarter that the company has paid the same dividend which represents a yield of 11.46%.
AT&T: 5% Dividend Yield
AT&T’s stable business and strong cash flow allows it to accord investors a dividend yield of 5%. In addition to high yields, the nation second-largest carrier boasts of compelling growth prospects.
The company is in the process of rebuilding after a shaky 2017 and if its earnings report in the recent quarter is anything to go by, then investors can bet on the carrier’s ability to generate long-term value. Completion of Time Warner acquisition is another aspect that makes it an exciting pick as a long-term play.
Verizon: 4.9% Dividend Yield
Verizon is another telecommunication giant, known for its ability to generate shareholder value in terms of dividends. The nation’s largest carrier currently boasts of a 4.9% dividend yield. The company paid out $9.5 billion in dividends to shareholders, last year.
The company’s dividend offering could receive a boost with the addition of an estimated $4 billion in cash flow because of the new corporate tax rate.
The collapse of T-Mobile-Sprint merger is another development that works to the advantage of Verizon. A merger of the two would have resulted in a company that would have posed stiff competition, significantly affecting the company’s ability to generate free cash flow.
Lockheed Martin: 5.4% Dividend Yield
Lockheed Martin has consistently posted earnings that beat Wall Street estimates. In addition to rewarding investors with better than expected earnings, the company also offers a dividend yield of 5.4% and a nice 2.32% annual dividend.
JPMorgan: 2.1% Dividend Payout
While living up to its credentials as the most valuable bank, JPMorgan pays shareholders a dividend of 2.1%. The rate could receive a boost in response to the new corporate tax rate that looks set to result in more cash flow.
Systematic stability and positive outlook of the economy makes it one of the best stocks for investors looking to generate significant passive income. In January, the financial institution paid a cash dividend of $0.56.
A new budget proposal which calls for an increase in defense spending means the company is poised to receive more orders from the U.S military, which can only lead to more revenues and cash flow for dividend payouts.
The company is set to pay an ex-dividend of $2 a share on March 23, 2018, marking the third quarter that the company has paid the same dividend.
Oasis Midstream Partners: 9.5% Dividend Yield
The Bakken-Shale focused company is easily the smallest company but with a high risk-reward when it comes to returning shareholder value. The company offers a generous 9.5% dividend yield distribution, supported by contracts from its oil and gas producing parent company Oasis Petroleum.
The company is planning to increase its payout by at least 20% through to next year as the energy sector continues to bounce back. Investors should expect higher dividends given that the company is planning to grow production by 20% this year and next year.
Altria Group: 3.75% Dividend Yield
Altria Group is a secure dividend-paying investment, in part because it deals with products that people are addicted to. The company owns the Marlboro brand which boasts of 10 big brands that affirm a reliable revenue stream.
In addition, the company has invested in smokeless tobacco technology as it looks to compete against e-cigarettes.
The firm offers a 3.75% dividend yield backed by a long payout history. The dividend payout could receive a boost as the company’s earnings are expected to grow faster this year, due to the tax reform. The firm has already raised its quarterly dividend by 6.7% to $0.70 a share.