You can take these dividend stocks to the bank.
If you’re a glass-half-empty kind of investor, looking at the latest headlines gives you plenty to worry about. A disappointing August jobs report is bad enough, but when you put that next to continued indicators of high inflation and growing concerns about yet another budget impasse that could result in a government shutdown … well, it’s enough to make some folks want to run for cover. But keep in mind that however rocky the stock market may get in the short term, there are plenty of tried-and-true names that can hang tough in a crisis and continue to grow your cash in the long term. The following dividend stocks offer a guaranteed payday via their distributions and have a low risk profile to protect you if things get rocky later this year.
Amgen Inc. (ticker: AMGN)
While you may have heard more about other health care stocks throughout the pandemic, this dynamic pharmaceutical company has been making plenty of headlines lately outside of the COVID-19 news cycle. Namely, in March, Amgen beat out more than a dozen other bidders to acquire the cancer-focused biotechnology company Five Prime Therapeutics for $1.9 billion in cash. That builds on recent acquisitions including the Otezla anti-inflammatory drug from Celgene for $13 billion and a $2.7 billion stake in a Chinese biotech to continue its growth in Asia. But this isn’t just an M&A stock — consider that 10 years ago, AMGN paid just 28 cents per share in dividends each quarter. Nowadays, that’s up to $1.76 — an increase of almost 530% in one decade. That’s dividend growth that offers big peace of mind.
Forward dividend yield: 3.2%
Evergy Inc. (EVRG)
Utility company Evergy operates in Kansas and Missouri, providing electricity through some 55,000 miles of overhead and underground lines that serve 1.6 million customers. That power comes from coal, hydroelectric, nuclear and natural gas plants, as well as renewable facilities that harness wind and solar power. EVRG is a slow-and-steady stock that isn’t exactly known for breaking out but has a strong history of income potential that many utility stock investors may be drawn to. Specifically, as recently as 2004, the company was paying 19 cents per share, but now distributions are nearly three times that at 53.5 cents. For long-term investors seeking out utility stocks, EVRG may be a sleepy but profitable pick worth a look.
Dividend yield: 3.1%
International Paper Co. (IP)
Lest you think this is a struggling paper company like the fictional Dunder Mifflin, Tennessee-based International Paper is actually seeing a ton of demand in the pandemic era thanks to all those e-commerce transactions that now require cardboard shipping containers to get food, personal products or furniture to doorsteps. As the largest paper products company in the world, with more than $23 billion in annual sales, IP is pretty close to a sure thing even in a digital age, as long as shipping containers are made out of paper products. Another thing that’s pretty close to a sure thing is its dividend. Payouts have surged from just 2.5 cents quarterly in 2009 during the aftermath of the financial crisis to more than 50 cents quarterly in a little over a decade. That’s a track record that proves a bit of short-term stress can’t stop this paper giant.
Dividend yield: 3.5%
3M Co. (MMM)
With an amazing track record of 63 consecutive years of dividend growth, 3M is a case study in how income-oriented investors can benefit by thinking about long-term reliability over short-term opportunities based on the headlines. The diversified chemical company serves all manner of end users, including health care companies, food service companies, automakers, construction firms, electronics companies and everything in between. This adds up to a very broad business that provides reliable revenue that doesn’t depend on a certain segment of the economy. Coupled with a large scale, 3M has had the entrenched operations to support significant income growth over the last few decades — and likely for many more.
Dividend yield: 3.2%
Philip Morris International Inc. (PM)
Sure, smoking is bad for you. But that’s old news — and the death of Philip Morris has been greatly exaggerated as this well-run company continues to serve an admittedly small but loyal customer base. And with dividends that remain about two-thirds of total earnings per share despite a yield that is more than three times that of the typical S&P 500 component, this is a low-risk dividend stock that is worth your notice if you fear a more choppy market environment in the months ahead. PM has increased its dividend for each of the last 11 years.
Dividend yield: 4.6%
Procter & Gamble Co. (PG)
One of the most popular low-risk investments on Wall Street, consumer staples king Procter & Gamble is a stable company that will perform well in any economic environment thanks to its popular brands including Gillette shaving products, Pampers diapers and Crest toothpaste. These items will be on family shopping lists regardless of the news cycle. That stability coupled with dividends that date to 1890 means this is a great foundational stock for any portfolio. And while the PG yield is the lowest on this list, it’s still nearly twice that of the typical S&P 500 component at present and thus worth a look.
Dividend yield: 2.4%
Prudential Financial Inc. (PRU)
The actuaries that make insurance company Prudential profitable have perfected the art of making sure that whatever this company pays out in claims is more than covered by the premiums clients are paying in. And since life, homeowners’ insurance and automobile insurance are pretty much necessities for large groups of people, investors can be sure that PRU stock will hang tough in any market environment. This insurance stock isn’t just standing still, however, with gains of more than 30% year to date on top of its generous dividends — which, by the way, are just about 35% of total earnings and ripe for future increases.
Dividend yield: 4.4%
7 low-risk dividend stocks for a choppy market
— Amgen Inc. (AMGN)
— Evergy Inc. (EVRG)
— International Paper Co. (IP)
— 3M Co. (MMM)
— Philip Morris International Inc. (PM)
— Procter & Gamble Co. (PG)
— Prudential Financial Inc. (PRU)
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