Great dividend stocks for income investors.
The best thing about holding stocks, of course, is the fact that you’re gaining wealth and building a nest egg that you’ll need to retire someday. But what if you could get paid to hold those stocks? That’s the beauty of dividend stocks, which offer a payout (usually quarterly) to shareholders. And the best of this group are known as dividend aristocrats, which are companies in the Standard & Poor’s 500 index that have increased their dividend for 20 consecutive years. Companies carry the dividend aristocrat label as a badge of honor, so these companies will fight to continue to increase these yields. All an investor has to do is collect their cash. And smile.
HCP (ticker: HCP)
With a market capitalization of nearly $18 billion, HCP is a leading real estate investment trust that invests in senior housing, skilled nursing facilities, hospitals and medical buildings in the U.S. As REITs are required to pay out at least 90 percent of their taxable income to shareholders, these vehicles are some of the best dividend stocks on the market — and a long history of consistently growing yield is a nice bonus, too.
Sector: Real estate investment trusts
Consecutive years of dividend increases: 30
Dividend yield: 5.8 percent
AT&T (T)
The successor to Ma Bell is a diversified business that provides cellular, voice and data communications plans to individual consumers and to corporations. Telecom stocks are viewed as solid, safe-haven stocks, and generally offer a large dividend payout. So if you’re looking for yield, T stock is the best communications stock of the bunch.
Industry: Major communications
Consecutive years of dividend increases: 31
Dividend yield: 4.7 percent
Chevron Corp. (CVX)
As one of the 30 components of the Dow Jones industrial average, Chevron is one of the biggest oil and gas companies in the market, operating exploration oil and natural gas exploration units, as well as downstream retail fuel products sold under the Chevron, Texaco and Caltex brands. In part because of its size, Chevron was able to withstand the drop in oil prices over the last two years and its stock price has even increased by 12 percent in 2016.
Industry: Integrated oil
Consecutive years of dividend increases: 30
Dividend yield: 4.3 percent
Consolidated Edison (ED)
Founded as the New York Gas and Light Co., Consolidated Edison is one of the largest utility companies in the U.S., serving New York City and nearby portions of New York and New Jersey. Utility stocks are considered safe havens in times of market volatility, but investors here sacrifice the potential for big returns in bull markets. So put some of your portfolio in utilities as a hedge, but don’t invest a lot unless you have a low tolerance for risk.
Industry: Electric utilities
Consecutive years of dividend increases: 41
Dividend yield: 3.4 percent
Emerson Electric Co. (EMR)
Talk about stability — EMR stock has faithfully increased its dividend for 59 years, back to the days where Gen. Dwight D. Eisenhower roamed the Oval Office. That’s about as exciting as this stock gets, though, because its products are important yet decidedly unsexy. Emerson makes process control systems, valves and analytical instruments — think motors, thermostats and other such products that you never consider, but would miss if they’re not around. Emerson is one of the safest stocks out there, moving up a steady 20 percent in the last five years. Throw in a hefty dividend yield and you’ve got a solid income stock.
Industry: Electrical products
Consecutive years of dividend increases: 59
Dividend yield: 3.7 percent
AbbVie (ABBV)
AbbVie is one of the hottest pharma stocks on Wall Street, with its stock price doubling since it was spun off from Abbott Laboratories in early 2013. Its most notable drug is marketed as Humira, and is a treatment for autoimmune diseases that has netted more than $10 billion in sales. AbbVie, as was Abbott before it, is a reliable dividend stock.
Industry: Major pharmaceuticals
Consecutive years of dividend increases: 43
Dividend yield: 3.5 percent
McDonald’s Corp. (MCD)
The home of Ronald McDonald and the Big Mac has enjoyed a resurgence as of late, with the MCD stock price up more than 21 percent in the last year. Investors and customers have been flocking to McDonald’s ever since it expanded its popular breakfast menu to an all-day affair. Throw in that huge dividend payout every year, and McDonald’s is nothing for investors to sneeze at.
Industry: Restaurants
Consecutive years of dividend increases: 39
Dividend yield: 3 percent
Exxon Mobil Corp. (XOM)
It’s hard for anyone to think about CVX — the No. 3 dividend aristocrat on this list — without also thinking about Exxon Mobil. XOM is the other huge energy mineral stock in the space, and it’s the bigger one of the pair, too, with a market capitalization of $367 billion compared to $190 billion for CVX. But its dividend yield is nearly a full percentage point behind its smaller brethren, and that gives Chevron the advantage on this list.
Industry: Integrated oil
Consecutive years of dividend increases: 33
Dividend yield: 3.6 percent
Target Corp. (TGT)
Big-box retailer Target may be battling with Amazon.com (AMZN) for market share, but it’s the clear winner when it comes to guaranteed yield. TGT pays out $2.40 per share every year — a healthy payout ratio of more than 48 percent — and it’s been growing its dividend for nearly a half-century.
Industry: Discount stores
Consecutive years of dividend increases: 48
Dividend yield: 3.5 percent
Coca-Cola Co. (KO)
The dean of the soda stocks, Atlanta-based Coca-Cola has lost a bit of its fizz. Sure, it still offers a healthy dividend greater than 3 percent, and it still increases that payout like clockwork. But KO stock has underperformed the Standard & Poor’s 500 index in the last five years, and its growth has been overshadowed by competitors PepsiCo (PEP) and Dr Pepper Snapple Group (DPS). Still if it’s yield that you want, KO isn’t a bad place to find it at all.
Industry: Beverages/non-alcoholic
Consecutive years of dividend increases: 53
Dividend yield: 3.2 percent
T. Rowe Price Group (TROW)
One of the most important rules for investing is to have a diversified portfolio. So while yield-searching investors are filling their baskets with REITs, consumer stocks and big oil, an out-of-the way stock like T. Rowe Price Group makes perfect sense. The company, which provides investment management services to individual and institutional investors, boasts a strong dividend of 3.2 percent and a three-decade history of raising its payout.
Industry: Investment Managers
Consecutive years of dividend increases: 29
Dividend yield: 3.2 percent
Nucor Corp. (NUE)
Plenty of steel stocks offer a dividend, and a handful of them are even better than the 3.1 percent yield dished out by Nucor. But if you dislike unhappy surprises — and who doesn’t, right? — than NUE stock is for you. A major player in the steel industry, Nucor has been growing its dividend for four decades, and doesn’t appear set to end that streak anytime soon.
Industry: Steel
Consecutive years of dividend increases: 42
Dividend yield: 3.1 percent
Procter & Gamble Co. (PG)
The maker of dozens of household products including Crest toothpaste, Bounty paper towels and Pampers diapers, Procter & Gamble is one of the best-known consumer companies in the U.S. And like competitors Johnson & Johnson and Kimberly Clark Corp. (both which appear elsewhere on this list), PG stock has been a solid dividend stock for decades. “If you’re a long-term, buy-and-hold-type investor, Procter & Gamble stock is a potential must-have in your portfolio,” Lombardi Financial editor Harris Anwar writes for the Income Investors website.
Industry: Household/personal care
Consecutive years of dividend increases: 59
Dividend yield: 3 percent
Kimberly-Clark Corp. (KMB)
This is the second of the household/personal care stocks on the list, and while KMB has lagged somewhat behind Procter & Gamble over the last year (25.6 percent vs. 17 percent returns) KMB stock still offers a healthy dividend and a good growth story. Kimberly-Clark makes lots of well-known household products, including Kleenex, Cottonelle and the Huggies, Pull-Ups, Little Swimmers and Goodnites diaper products for young children.
Industry: Household/personal care
Consecutive years of dividend increases: 43
Dividend yield: 2.9 percent
PepsiCo (PEP)
Here’s one of those places where it gets down to personal preference. PepsiCo has been outperforming KO stock by a healthy margin in the last five years, and both companies are in similar positions as they try to maintain market share while consumers are more inclined to forgo sodas for bottled water. Despite having a better overall stock performance, PEP lags slightly behind KO in the size of its payout as well as consecutive years of dividend growth. But you really can’t go wrong with either stock purely as a dividend play.
Industry: Beverages/non-alcoholic
Consecutive years of dividend increases: 43
Dividend yield: 2.8 percent
Archer Daniels Midland Co. (ADM)
This is the company that makes your food taste a little sweeter. Archer Daniels Midland makes, among other things, high-fructose corn syrup that can be found in many types of foods and drink. So rather than being a play on a specific food company, investors can buy ADM stock knowing that its products are used across grocery store aisles. Its products are found in drinks, snacks, meats, dairy and processed foods.
Industry: Agricultural commodities/milling
Consecutive years of dividend increases: 40
Dividend yield: 2.8 percent
Wal-Mart Stores (WMT)
Talk about a company that incites passion! Wal-Mart was disparaged for years by detractors who said its big-box success forced mom-and-pop stores around the country to close. Investors didn’t care, though, and WMT was a huge Wall Street darling from 2011 to 2015. Then WMT shocked the markets when it announced a $2.7 billion investment program to increase wages of its associates, sending shares down 33 percent in less than a year. WMT is still struggling, with its stock down 25 percent in the last 12 months, although its employees are likely a little happier.
Industry: Discount stores
Consecutive years of dividend increases: 41
Dividend yield: 2.7 percent
Johnson & Johnson (JNJ)
Johnson & Johnson is best known for its line of baby and infant products and its over-the-counter skin care, oral care and bandages. But perhaps more importantly to investors, JNJ stock gets power from the company’s line of pharmaceutical and medical devices, including surgical products that are distributed wholesale to hospitals and clinics.
Industry: Major pharmaceuticals
Consecutive years of dividend increases: 53
Dividend yield: 2.7 percent
Leggett & Platt (LEG)
This may not be the best-known stock on the list, but LEG stock is a good way to diversify a yield-lovers’ portfolio into the home furnishings segment. Leggett & Platt makes many of the components you may find in your bed — springs, coils, powered foundations, frames, as well as bedding accessories and carpeting. Their products help recliners be more comfortable, beds to be softer and carpets to be more resilient. On top of that, LEG stock has managed to beat the S&P 500 over the last year and offer a good solid dividend.
Industry: Home furnishings
Consecutive years of dividend increases: 44
Dividend yield: 2.7 percent
Genuine Parts Co. (GPC)
Genuine Parts Co. is a classic definition of a boring stock that should not be overlooked. It doesn’t deal in making products, but GPC is one of the first companies that most people would turn to when something breaks down. Consumers may know the company best through its Napa automotive repair product stores, but the company also makes electrical products, motors, bearings, tubing and all sorts of materials. A great 12-month return of 22 percent, plus a solid history of dividend growth, makes GPC stock a solid choice for income investors.
Industry: Wholesale distributors
Consecutive years of dividend increases: 59
Dividend yield: 2.6 percent
More from U.S. News
6 Reliable Dividend Stocks Paying Out for 100 Years or More
6 Famous Flameouts of Famed Investors
7 of the Best Socially Responsible Funds
20 Awesome Dividend Stocks for Guaranteed Income originally appeared on usnews.com
