For example, a real estate investment trust (REIT) is required to pay out up to 90% of its earnings as a dividend. As a result, these stocks have some of the highest dividend yields available. You’ll want to make sure you compare companies that are in similar sectors (financials, consumer durables, healthcare, etc.). Dividend stocks are stocks of companies that make regular distributions to their shareholders, usually in the form of cash payments.
- The longtime Dividend Aristocrat has hiked its annual distribution without interruption for close to five decades.
- Once a company establishes or raises a dividend, investors expect it to be maintained, even in tough times.
- This feature is particularly appealing to small investors since commission fees are proportionately larger for smaller purchases of stock.
- The practice can cast doubt on the company’s management and subsequently depress its stock price.
The last increase was announced in March 2023, when GD lifted the quarterly payout by 4.8% to $1.32 a share. With its below-average payout ratio of 34%, General Dynamics should have sufficient room for more dividend growth. Over the long haul, however, this Dividend Aristocrat’s shares have been a proven winner. That’s thanks in no small part to 31 consecutive years of dividend increases. ECL’s most recent hike came in December 2022, with a 4% increase in the quarterly payment to 53 cents per share.
Dividends and REITs
Besides, PepsiCo (PEP) has an ace up its sleeve with its snacks business. The company’s Frito-Lay division is known for Doritos, Tostitos, Rold Gold pretzels, and numerous other brands. Automatic Data Processing (ADP) is the world’s largest payroll processing firm, responsible for paying the 4 balanced scorecard perspectives nearly 40 million employees and serving more than 1 million clients across 140 countries. U.K.-based water-treatment company Pentair (PNR) whose divisions include Flow Technologies, Filtration & Process and Aquatic & Environmental Systems, is always looking to expand its capabilities.
- The dividend yield is the percentage of the share price you bought the stock for, paid in dividends annually.
- A dividend is a portion of a company’s profits that it distributes to shareholders.
- Stocks in certain sectors, like real estate and utilities, may also pay higher dividends on average.
- As noted above, a stock dividend increases the number of shares while also decreasing the share price.
- Many investors, particularly retirees, may try to invest primarily or solely in such dividend-paying stocks.
“The positive outlook on electric vehicle adoption is ALB’s key driver, and we believe there is more upside risk for this trend to accelerate under a Blue Wave in the U.S.,” says CFRA Research. The utility company was added to the elite group of dividend growers in January 2021. © 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions.
Coke rival Pepsi is also a new addition to this month’s list of the best dividend stocks to buy; it, too, is a Dividend Aristocrat. Pepsi notched good results in the most recent quarter thanks to snack and beverage innovations, its flexible channel strategy, and efficiency gains, notes Morningstar analyst Dan Su. Pepsi has raised its dividend for 51 consecutive years, and we expect dividend payments to grow at 8% annually over the next decade, says Su.
This is a great stock to buy during broad market downturns and a solid hold for a bull market recovery. Starbucks has increased the dividend every year since 2010 while increasing earnings per share by 721% over the same period. Its yield of 2% at recent prices is on the higher end of its historical range, representing an attractive price to buy shares of the company.
Dividend yield
BRO’s most recent hike was announced in October 2023 – a 13% increase in the quarterly distribution to 13 cents per share. Perhaps less well known is that SJM is an equity income machine, having increased its dividend annually for 26 years, per S&P. Thanks to that track record, the stock was added to the Dividend Aristocrats on Feb. 1, 2023. CHRW stock has a mixed record when compared to the broader market over the longer term. Shares have outperformed the S&P 500 on an annualized total return basis over the past one- and three-year periods, but are laggards over the past five, 10 and 15 years. Going back 20 years, CHRW’s annualized total return beats the S&P 500 by a bit more than 2 percentage points.
Dividend stocks: What they are and how to invest in them
Some stocks pay much higher dividends, and if you own enough dividend stocks, the total combined payment can be significant. This kind of compounding is why dividends accounted for 42% of the total return of the S&P 500 from 1930 to 2019, according to an analysis by Hartford Funds. These traits make REIT stocks attractive choices for investors who want reliable dividend income and high yields.
How to Invest in Dividend Stocks
Praxair raised its dividend for 25 consecutive years before its merger, and the combined company continues to be a steady dividend payer. Prior to the merger, Linde, now headquartered in Dublin, raised its dividend every year since 2014. Expeditors International of Washington (EXPD) was added to the Aristocrats in January 2020. The logistics company last raised its semiannual dividend in May 2023, to 69 cents a share from 67 cents a share.
What are the best dividend stocks?
It was named to the list of payout-hiking dividend stocks at the start of 2020 after its June acquisition of Bemis. Bemis, which fell out of the S&P 500 Index and thus the Aristocrats in 2014, rejoined by merit of its merger with Amcor. That payout has been on the rise for 39 consecutive years and has been delivered without interruption for 79.
While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service. In general, if you own common or preferred stock of a dividend-paying company on its ex-dividend date, you will receive a dividend. For the company, a stock dividend is a pain-free way to issue dividends without depleting its cash reserves. This means that adding shares with no corresponding increase in capital works to reduce the values of all of the firm’s shares. Markets last week performed like a long-bedridden flu patient who finally broke their fever and started feeling fine enough to dance.
In August 2023, Illinois Tool Works raised its quarterly dividend by 6.9% to $1.40 cents a share, bringing its streak of annual increases to 52 years. However, the company notes that excluding a period of government controls in 1971, that streak would stretch to 58 years. In order to tighten up its finances, in early February 2023, the company cut its quarterly dividend by 41% to 30 cents per share. In October 2023, the company slashed the payout yet again, by 70% to 9 cents per share per quarter. Like most utilities, Consolidated Edison is highly regulated but enjoys a fairly stable stream of revenues thanks to limited direct competition – but not a lot of growth.
With dividend growth at 50 years and counting, and shares trading for a steep discount to their all-time highs, dividend investors should put Target on their shopping list. Schedule monthly income from dividend stocks with a monthly payment frequency. Morningstar, Inc. licenses indexes to financial institutions as the tracking indexes for investable products, such as exchange-traded funds, sponsored by the financial institution. The license fee for such use is paid by the sponsoring financial institution based mainly on the total assets of the investable product. Please click here for a list of investable products that track or have tracked a Morningstar index. Morningstar, Inc. does not market, sell, or make any representations regarding the advisability of investing in any investable product that tracks a Morningstar index.
W.P. Carey also provided investors with its preliminary view for 2024. The REIT anticipates producing between $4.60 and $4.80 per share of adjusted FFO. It plans to reset the dividend to better align it with its lower adjusted FFO. It’s targeting a dividend payout ratio of 70% to 75%, down from a current payout ratio of over 80% on its higher adjusted FFO. Lower oil and gas prices have resulted in lower monthly dividend payouts.
JNJ’s diversification across mutiple segments adds fortitude to this defensive dividend stock, and that helps income investors sleep better at night. The healthcare giant has increased its payout for three decades and counting. The most recent hike came in April 2022 when JNJ increased the quarterly dividend by 6.6% to $1.13 per share.