S&P Global has paid a dividend each year since 1937 and has increased its disbursement annually for nearly half a century. Most recently, in January 2023, SPGI raised its quarterly payout by a healthy 5.9% to 90 cents a share. The company generated levered free cash flow of $3.9 billion for the 12 months ended Sept. 30, 2022. Although Exxon struggled to pay its dividend in 2020, Good says that the firm’s recent actions to reduce costs and capital spending should allow the company to meet its dividend payments. To help you find reliable dividend investments, Forbes Advisor has identified 10 of the best dividend stocks available in the U.S. stock market today. These companies have boosted annual dividend payouts for at least 10 years with attractive yields, have delivered long-term price stability and have grown their earnings year after year.
- Various mutual funds and exchange-traded funds (ETFs) also pay dividends.
- If a company announces a higher-than-normal dividend, public sentiment tends to soar.
- Depending on the company, dividends will be paid on a monthly, quarterly or annual basis.
- Tax is another important consideration when investing in dividend gains.
For investors, dividends represent an asset, but for the company, they are shown as a liability. Though profits can be kept within the company as retained earnings to be used for the company’s ongoing and future business activities, a remainder can be allocated to the shareholders as a dividend. A stock dividend is a payment to shareholders made in additional shares instead of cash. The stock dividend rewards shareholders without reducing the company’s cash balance.
Recent monthly dividend Headlines
Chevron (CVX) is an integrated oil giant that also has operations in natural gas and geothermal energy. It also happens to be the lone energy-sector name among the 30 stocks in the Dow Jones Industrial Average. West Pharmaceutical Services (WST) was added to the Dividend Aristocrats in January 2021 in recognition of its long history of annual increases. J.M. Smucker (SJM) is a well-known consumer staples stock thanks to the company’s wide range of popular brands. Folgers and Dunkin’ coffee, Jif peanut butter and Smucker’s eponymous jams and jellies represent just a few of its offerings.
- Consolidated Edison (ED) is the largest utility company in New York State by number of customers.
- The company has steadily raised its dividend amount, averaging 11.0% yearly increases over the last five years.
- A combination of acquisitions, organic growth and stronger margins have helped Roper juice its dividend without stretching its profits.
- As such, critics sometimes call stock dividends something of an accounting gimmick, since it represents something that could be viewed as paper shuffling than a real return of capital.
Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. Companies may still make dividend payments even when they don’t make suitable profits to maintain their established track record of distributions.
Shares in 3M (MMM), which makes everything from adhesives to electric circuits to N95 respirators, have been a long-time market laggard. But as much as this Dow stock has been a disappointment in terms of price appreciation, there’s no questioning wave payroll reviews and pricing its value as a compounding source of income. EPS growth, however, is forecast to increase at a double-digit percent rate. Kimberly-Clark’s (KMB) well-known brands include Huggies diapers, Scott paper towels and Kleenex tissues.
high-dividend stocks
Ample free cash flow and a reasonable payout ratio should help ensure that the annual dividend increases keep on coming. Below is a list of 9 of the highest-dividend stocks headquartered in the U.S., ordered by annual dividend yield. This list also takes into account the 5-year average dividend growth rate, includes companies from either the S&P 500 or Russell 2000, and is updated weekly.
Fund Dividends
This allows a company to build loyalty with its shareholders by giving them something every year without having to fork over cash that create near-term tax consequences. One key decision investors will have to make is whether they’d like to purchase dividend stocks or dividend funds. A dividend stock is just a publicly traded company that pays a dividend, while a dividend-focused mutual fund or ETF is a basket of many dividend-paying stocks. If you’re looking for a more diversified approach, funds and ETFs with high dividend yields can be an attractive option. These funds will tend to hold companies with higher dividend yields than average and can be a way to generate higher income than a typical portfolio. The Vanguard High Dividend Yield ETF (VYM) holds consistent dividend payers like JPMorgan Chase, Johnson & Johnson and Home Depot and comes with annual expenses of just 0.06 percent.
Which Stocks Pay Dividends?
To invest in dividend stocks, it’s imperative to avoid making any decisions based on short-term market movements. Dividends are a payout to shareholders in the form of either cash or additional shares on every share they hold. A shareholder must have purchased a stock by a certain date to be eligible to receive the next dividend.
Both private and public companies pay dividends, but not all companies offer them and no laws require them to pay their shareholders dividends. If a company chooses to pay dividends, they may be distributed monthly, quarterly or annually. Economists Merton Miller and Franco Modigliani argued that a company’s dividend policy is irrelevant and has no effect on the price of a firm’s stock or its cost of capital. A shareholder may remain indifferent to a company’s dividend policy as in the case of high dividend payments where an investor can just use the cash received to buy more shares. Indeed, 68 consecutive years of annual dividend increases is proof positive of the company’s commitment to returning cash to shareholders.
Not too long ago, investors fretted over a long-term slide in sales of carbonated beverages, but that turned out not to be a secular trend after all. Indeed, Grand View Research forecasts the global market for fizzy drinks to produce a compound annual growth rate of 4.7% through 2028. However, in January 2024, Walgreens slashed its quarterly dividend by almost half, to 25 cents per share from 48 cents. The move puts the pharmacy chain at risk of being removed from the Dividend Aristocrats. Most recently, in July 2023, CTAS raised its quarterly dividend by 17.4% to $1.35 per share. Generous military spending has helped fuel this dividend stock’s steady stream of cash returned to shareholders.
Another measure of good dividend stocks is the dividend payout ratio, which removes volatile stock prices from the equation by comparing a company’s earnings to its dividend payment per share. If a company earns $2 per share in a given quarter and pays a dividend of $1 per share, its payout ratio is said to be 50%. One place to find reliable dividend stocks is to look at stocks in the dividend aristocrats, a group of stocks that historically has increased dividend payments over time.
A company with a long history of dividend payments that declares a reduction of the dividend amount, or its elimination, may signal to investors that the company is in trouble. AT&T Inc. cut its annual dividend in half to $1.11 on Feb. 1, 2022, and its shares fell 4% that day. Although cash dividends are common, dividends can also be issued as shares of stock. Various mutual funds and exchange-traded funds (ETFs) also pay dividends.