Look beyond the most popular names.
The Standard & Poor’s 500 index of stocks consists of the 500 largest and most influential companies in America. However, not all of these picks are worthy of consideration by dividend investors. After all, a large portion doesn’t even pay dividends. These are stocks like Facebook (Nasdaq: FB) that invest in future growth instead of delivering a share of profits back to shareholders. If you’re looking for yield, then you have to eliminate some of the most popular names. Furthermore, some of the other popular investments like Apple (AAPL) do pay a dividend, but don’t offer much in the way of payouts. Here are some stocks to consider.
Navient Corp. (NAVI)
Formerly known as Sallie Mae, Navient is primarily a student loan servicer. The modest financial company has seen its ups and downs in recent years amid concerns about the weight of student loan debt on younger Americans, but a pro-business regime in Washington has taken some of the pressure off NAVI stock. Dividends paid by Navient come directly from the interest on student loans, and as long as the cash keeps flowing in from indebted Americans then the cash will keep flowing to shareholders.
Sector: Financials
Current yield: 4.8 percent
AT&T (T)
Communications giant AT&T is one of the biggest names on Wall Street, but also one of the biggest dividend payers. Thanks to a sizable network that includes wireless customers and landline data services, AT&T offers a stable business that pays stable dividends. The company just increased its quarterly payout in mid-December, marking the 34th consecutive year that the telecom giant has increased its dividend for investors. With a big current yield and a history of increases like this, AT&T stock should remain one of the most generous in the S&P 500.
Sector: Telecommunications
Current yield: 5.1 percent
Welltower (HCN)
Welltower, formerly known simply as Health Care REIT, is a real estate investment trust that owns and invests in senior housing properties including retirement communities and assisted-living homes across the U.S., U.K. and Canada. Real estate investment trusts offer big-time yield to investors because they are a special class of corporation that passes on 90 percent of taxable profits to shareholders. And given the reliable revenue that can be created by senior housing facilities, this is one of the most solid dividend payers in the S&P index.
Sector: Real estate
Current yield: 5.5 percent
HCP (HCP)
HCP is another health-care focused real estate investment trust. And while its portfolio also includes some senior housing properties, HCP also owns or invests in medical office buildings, life sciences laboratories and even hospitals. Not only is this revenue stream reliable, but long term there is a lot of potential from these health care-related REITs. After all, the aging demographic shift in America means more demand for services from companies like HCP in the coming years.
Sector: Real estate
Current yield: 5.5 percent
Scana Corp. (SCG)
Scana is a regional utility that operates mainly in South Carolina, providing electric and gas service to more than 600,000 customers. Utilities are among the most reliable and high-paying dividend stocks out there, because there is little competition for power companies and the customer base is incredibly reliable. There’s not a lot of growth to be had in the utility business, true. But income-oriented investors often find the big yields well worth the trade-off — and with Scana currently yielding more than twice the typical S&P 500 stock, that makes this company worth a look.
Sector: Utilities
Current yield: 5.7 percent
Oneok (OKE)
Oneok is a “midstream” energy company that primarily operates natural gas infrastructure. Unlike explorers that take the gas out of the ground or wholesalers that bring the energy to market, Oneok is focused on the steps in between like transportation and storage. This is a reliable way to find revenue if you’re an energy company, because you’re not at the whims of the market when it comes to pricing. Think of OKE stock as a toll collector, charging companies to move energy around the economy. While there are modest changes in volume, the overall business is quite reliable — and as such, can support big-time dividends.
Sector: Energy
Current yield: 5.7 percent
Macy’s (M)
One of the more troubled stocks on this list is department store Macy’s. Shares have slumped more than 30 percent this year as the retailer has struggled with declining sales. A dividend yield figure is a two-part calculation; you take the total paid in annual dividends and divide it by the share price. That means that while successful companies can see their dividend yield increase through bigger payouts, struggling companies can also see their yield jump by keeping dividends steady as their share price gets smaller. But for aggressive investors who are willing to risk share price declines, the juicy dividend yield is still noteworthy.
Sector: Retail
Current yield: 5.9 percent
Seagate Technology (STX)
Seagate is one of the world’s largest manufacturers of data storage hardware, including hard disk drives. This includes drives for personal computers, but also for the Xbox video game system and large servers and data centers. Business has been challenging for Seagate in recent years as memory storage has become much cheaper, and virtualized storage on the cloud has reduced the need for consumers and businesses to store as much on their own hardware. However, a juicy dividend and reliable history as one the leading tech hardware firms makes this an intriguing play for the income potential.
Sector: Technology
Current yield: 5.9 percent
Kimco Realty Corp. (KIM)
Like the health care companies previously mentioned, Kimco is a real estate investment trust. But this business is different, as KIM stock is focused mainly on commercial space. These are so-called “open air shopping centers,” more commonly known as strip malls. Kimco likes to have an anchor grocery store or discounter at its properties, but also serves chain restaurants or retailers. As of June, the company operated more than 500 properties that totaled 84 million square feet of gross leasable area across 32 states, as well as Puerto Rico and Canada.
Sector: Real estate
Current yield: 6 percent
Iron Mountain (IRM)
Yet another twist on the REIT sector is Iron Mountain, an information storage firm that specializes in both archiving physical items as well as virtual storage of digital files. Iron Mountain serves a wide array of customers, storing everything from X-rays for medical companies to video surveillance tapes for retailers to sensitive tax documents for financial firms. As information and data are so useful and readily available, the services of a company like Iron Mountain are increasingly in demand. Every business is gathering crucial information about its customers and archiving data, so IRM is a reliable business services stock now and for the future.
Sector: Real estate
Current yield: 6 percent
More from U.S. News
7 of the Best Stocks to Buy for 2018
Why Investors Love Legacy Companies
The Top 10 Investment Portfolio for Millennials
10 of the Best S&P 500 Dividend Stocks originally appeared on usnews.com
