If you’re looking to invest money, you may want to consider high-dividend stocks. Dividends are regular distributions that companies dole out to their shareholders. High dividends simply mean that whatever money is returned to shareholders, generally each quarter tends to be substantial. What will follow momentarily are 10 high-dividend stocks to consider. While their annual dividend yield may change by the time you read this, all of these companies are currently rock-solid brands. A financial advisor can help you find the right asset allocation mix to potentially achieve your long-term financial goals.
What Is Meant By a High-Dividend Stock?
Generally, companies with stocks that have an annual dividend yield of 2% to 6% are considered a good rate for high-dividend stocks. You actually don’t necessarily want the money to be too substantial. If a dividend yield is too high, for instance, over 10%, that may mean that investors are selling the stock, which can increase the payouts – but ultimately lower the share price. Dividends can be a part of many investment strategies, from aggressive wealth growth to long-term retirement planning.
10 Stocks With High Dividends
The following are mature companies that are considered to be high-dividend stocks and that many professionals recommend as being on the safer side of the investment spectrum, though all investments are risky. We’ll take a closer look at each one and analyze what teach dividend yield is – as of the end of November 2022 – so that you can understand how dividends work and what your options might be.
1. AT&T (T)
Annual dividend yield: 5.8%
AT&T is a telecommunications giant and has been since its roots in 1885. It has constantly reinvented itself over the decades and just recently sold off some of its media operations assets and is considered a leaner company than it has been in the past. It should be an attractive investment for many, with subscribers up and subscriber additions driving revenue growth. For instance, wireless revenues were up 5.6% in the third quarter of 2022, the best growth in more than a decade.
2. Lowe’s Companies Inc. (LOW)
Annual dividend yield: 2.2%
It’s a home improvement giant that was incorporated in 1952 and first went public in 1961. It’s the type of company that has appeal to generations of all ages. If you’re buying your first home, you probably have a lot of home projects; if you’ve owned a home for years, you likely have numerous home improvement projects. Revenue has been on the rise lately, up 3% in the third quarter of 2022, against the same time a year earlier. In general, analysts’ enthusiasm for Lowe’s has been high.
3. McDonald’s Corp. (MCD)
Annual dividend yield: 2.2%
Never bet against McDonald’s. After a slight dip in sales in 2020 when the pandemic was at its worst, the global fast-food giant has seen its profits climb in recent years. McDonald’s, which opened in 1955 and had its initial public offering 10 years later, is constantly rebranding itself with every new generation.
In recent years, it has been modernizing and upgrading its stores to manage a surge of interest from customers who want to utilize more of its drive-thru and delivery services. Billions of burgers served; billions of dollars made (in 2022 at least $5.6 billion expected).
4. Best Buy Co. Inc. (BBY)
Annual dividend yield: 5.13%
The consumer electronics retailer has seen somewhat of a slump in the fall of 2022, but it has had a lot of growth in the last couple of years, especially during the pandemic when families were in lockdown and looking to improve their computer and home entertainment situation.
For instance, in 2021, Best Buy’s revenue climbed 8%, hitting $47.3 billion; by the fiscal year 2022, it was at $51.8 billion in total revenue. Meanwhile, it has been reported that numerous insiders have substantial amounts of Best Buy stock, which tends to suggest confidence within the company.
5. Target (TGT)
Annual dividend yield: 2.69%
The department store could have gone the way of many shopping malls, as e-commerce evolved. But Target has evolved as well, going from strictly a brick-and-mortar retailer to one that is competing successfully with online businesses and supermarkets. Analysts have predicted that it should remain a growth stock for at least the next several years.
6. Walgreens Boots Allliance Inc. (WBA)
Annual dividend yield: 4.78%
You’re familiar with Walgreens and perhaps less familiar with its holding company, Walgreens Boots Alliance, Inc., an American-British-Swiss firm headquartered in Deerfield, Illinois. Walgreens is part of the company as well as the pharmacy chain Boots and some pharmaceutical manufacturing and distribution companies. In recent months, analysts have been excited about the drugstore chain and healthcare services company. In short, Walgreens’ financial picture is in good health.
7. Procter & Gamble Co. (PG)
Annual dividend yield: 2.59%
Procter & Gamble has been an attractive stock for years, manufacturing products such as Crest, Pampers and Bounty paper towels – and is still performing handsomely for investors. It has a high dividend payout ratio, which measures the dividends paid out to shareholders relative to the company’s net income. Analysts believe the company will see almost 5% in annual earnings growth over the next five years.
8. United Parcel Service, Inc.
Annual dividend yield: 3.42%
The economy may be looking shaky at times, but UPS, one of the world’s largest companies, had a better-than-expected profit in its third quarter of 2022. It doesn’t seem to matter what is thrown at the logistics solutions company – a pandemic, supply chain issues, inflation, a possible recession – UPS has been thriving over the years with customers in over 220 countries and territories. Its revenue in 2021 was $97.3 billion and its projections for 2022 are $102 billion.
9. Cisco Systems Inc.
Annual dividend yield: 3.18%
Cisco Systems, an information technology brand, was founded in 1984 and went public in 1990. As technology has become more prevalent in everyone’s lives, so has Cisco, offering software and hardware products and specializing in markets such as domain security and videoconferencing. Cisco recently announced plans to cut its workforce by 5% and spend $600 million on a restructuring plan and upon hearing that news, excited investors caused the stock to go up.
10. Coca-Cola Co. (KO)
Annual dividend yield: 2.88%
Coca-Cola makes more than Coke products; it is also a juice company and it has been expanding into energy drinks and alcohol, among other beverages. In the third quarter of 2022, revenues went up by 10% and profits climbed by 14%, compared to the same period the previous year.
In a recent company statement, Coca-Cola stated, “In an environment where consumer preferences are rapidly evolving, the company is focused on expanding its offerings to fit all consumers’ budgets.” In other words, the beverage company seems poised to try to convince consumers of all social classes to part with some of their money. That’s all an investor could ask for.
The Bottom Line
Investing in dividend stocks can be an excellent way to earn money. Still, any investment is a risk. Before you purchase any stock, it is important to analyze how well it fits into your overall portfolio. You can invest in a dividend stock the same way you would any other stock in your investment account or through a financial advisor.
Tips for Investing
- Determining the right mix of assets can be difficult. Enlisting the help of a financial advisor can be crucial to building the long-term wealth you seek. If you don’t have a financial advisor finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you’re trying to determine how a specific investment might impact your overall portfolio, consider using SmartAsset’s free investment return calculator.
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