Looking to invest in dividend stocks, mutual funds, and companies that offer long-term growth potential with average payout ratio and total returns? In this listicle, we’ve compiled a selection of the best dividend stocks from companies to buy and hold for steady income, capital appreciation, and total return. These companies have a proven track record of consistently paying dividends, making them ideal for investors seeking reliable returns.
From established blue-chip companies to emerging market leaders, our list covers a diverse range of industries and sectors, including dividend aristocrats, dividend stalwarts, best dividend stocks, and those with a dividend growth streak. We’ve thoroughly researched each stock’s financial performance, dividend history, growth prospects, fair value estimate, payout ratio, and companies to ensure you’re getting the cream of the crop.
Scroll down below for reviews of our top picks and discover why these dividend stocks from companies are worth considering for your investment portfolio. Whether you’re a seasoned investor or just starting out, these carefully selected dividend stalwart stocks with a dividend growth streak can provide stability, passive income streams, and potential wealth accumulation over time. Don’t miss out on this opportunity!
1. Johnson & Johnson
Johnson & Johnson (J&J) is a renowned multinational pharmaceutical company and dividend stalwart that has gained recognition for its wide range of consumer healthcare products and average share. With a rich history that spans over several decades, J&J has established itself as a reliable and trustworthy brand in the industry over the past years.
One notable aspect of J&J that makes it appealing to dividend investors is its consistent payment of dividends and payout. The company has a strong track record of rewarding its shareholders with regular dividend payments and attractive payout, making it an attractive option for those seeking stable income from their investments.
Moreover, J&J’s diversified portfolio and dividend payout adds to its appeal as a dividend stock. The company operates across various sectors within the healthcare industry, including pharmaceuticals, medical devices, consumer health products, and dividend increases. This diversification helps mitigate risks associated with relying solely on one sector, dividend increases, dividend growth, dividend aristocrats, best dividend stocks.
In recent years, J&J has demonstrated financial strength by consistently increasing its dividends. This not only reflects the company’s commitment to returning value to shareholders through dividend increases but also indicates confidence in its ability to generate steady cash flow and sustain future growth.
For instance, in 2020 alone, despite the challenges posed by the global pandemic, J&J increased its quarterly dividend payout by approximately 6% in cash. This demonstrates resilience and stability even during uncertain times.
2. Coca-Cola
Coca-Cola is a global beverage giant with a strong brand presence. With its iconic logo and refreshing drinks, the company has become a household name around the world. But what makes Coca-Cola an attractive dividend stock? Let’s take a closer look.
One of the key reasons investors love Coca-Cola is its consistent track record of increasing dividends and cash payout over the years. The company is part of an elite group known as “Dividend Aristocrats,” which consists of companies that have raised their dividends for at least 25 consecutive years. This demonstrates Coca-Cola’s commitment to rewarding shareholders with regular income through dividend increases and dividend growth.
Another factor contributing to Coca-Cola’s appeal as a dividend stock is its wide distribution network, loyal customer base, and payout growth. The company operates in more than 200 countries, allowing it to generate substantial cash flow from sales across different markets. This stability enables Coca-Cola to maintain stable dividend payouts even during challenging economic times.
In recent years, Coca-Cola has also made efforts to diversify its product portfolio by introducing healthier alternatives and expanding into new beverage categories such as sparkling water and sports drinks. These strategic moves aim to adapt to changing consumer preferences while continuing to leverage the strength of their brand and share.
Overall, investing in Coca-Cola can be an excellent choice for those seeking steady income through dividends payout. As a globally recognized company with a long history of dividend increases and payout stability, backed by its vast distribution network and loyal customer base, Coca-Cola offers investors both stability and growth potential.
3. Procter & Gamble
Procter & Gamble (P&G) is a well-established consumer goods company that offers a diverse range of products and has a history of dividend increases. With its strong market position, continuous innovation, and reliable payout, P&G has proven to be a reliable choice for income-focused investors looking for the best dividend stocks.
One of the key attractions of investing in P&G is its solid dividend track record and payout growth. As a dividend stalwart, P&G has consistently increased its dividends for over six decades, demonstrating its growth and commitment to shareholders. This impressive streak showcases the company’s commitment to rewarding shareholders with regular dividend hikes and payout growth over the years.
P&G’s ability to generate consistent cash flows is driven by both its wide product portfolio and ongoing growth initiatives. The company operates in the consumer staples sector, which tends to remain resilient even during economic downturns due to the essential nature of these products.
P&G maintains a strong balance sheet, allowing it to navigate challenging times while continuing to invest in research and development, marketing campaigns, expansion opportunities, dividend growth, and share payout. This financial stability provides investors with confidence in their investment decisions regarding dividend growth, payout, and share.
Furthermore, over the years, P&G has implemented share repurchase programs as an additional way to return value to shareholders. By buying back shares on the open market, P&G reduces its outstanding shares count, effectively increasing earnings per share (EPS) and potentially boosting stock prices.
4. 3M
3M is a multinational conglomerate known for its innovative products and dividend growth across various industries. With a rich history spanning over six decades, the company has consistently raised dividends over the years, making it an attractive choice for investors looking for reliable income.
One of the key factors contributing to 3M’s dividend stability is its commitment to research and development (R&D) payout. The company invests heavily in R&D, allowing it to develop cutting-edge solutions that meet the evolving needs of customers worldwide. This focus on innovation not only drives growth but also helps maintain a competitive edge in the market.
Over time, 3M has demonstrated its ability to increase dividends regularly and payout. Thanks to this consistent track record of dividend growth, share investors can rely on receiving higher payouts year after year. For example, in February 2021, 3M announced its latest dividend increase—the 63rd consecutive annual increase—highlighting its commitment to rewarding shareholders with a payout.
Moreover, what sets 3M apart is its moat rating—a measure of how wide and sustainable a company’s competitive advantage is, including dividend growth, share, and payout. The wider the moat rating, the stronger and more resilient the business becomes against potential threats or competition. With an impressive moat rating due to its vast product portfolio, strong brand reputation, and dividend growth, 3M stands out as a dependable investment option.
5. PepsiCo
PepsiCo, a leading food and beverage company, is an attractive option for income-seeking investors due to its consistent dividend payments (payout) over the years. With globally recognized brands like Pepsi, Lay’s, Gatorade, Tropicana, and Quaker Oats under its umbrella, PepsiCo has established itself as a powerhouse in the industry.
One of the key strengths of PepsiCo lies in its diversification across both snacks and beverages. This diversification provides stability in generating cash flows and dividend growth for the company. Even during challenging economic times or shifts in consumer preferences, PepsiCo’s wide range of products ensures that it can adapt to changing market conditions and share.
In recent years, PepsiCo has demonstrated strong financial performance. In 2020 alone, the company reported net revenue of $70.37 billion and operating profit of $11.69 billion despite facing disruptions caused by the COVID-19 pandemic. This resilience showcases their ability to navigate through difficult circumstances while still delivering value to shareholders.
Moreover, when we look at historical data on dividends and shares paid by PepsiCo since 1972 (the year it began paying dividends), we see a consistent upward trend with occasional increases along the way. This track record demonstrates management’s commitment to returning value to shareholders through regular dividend payouts.
6. McDonald’s
McDonald’s, one of the world’s largest fast-food chains, has secured a spot on our list of best dividend stocks to buy and hold shares. With millions of customers served daily, the company has demonstrated its ability to generate consistent profits and share over the years.
One key reason why McDonald’s share is an attractive dividend stock is its commitment to increasing dividends. The company has a track record of steadily raising its share payouts, reflecting its strong financial position and stability. This makes it an appealing choice for investors seeking reliable income from their share investments.
Another factor that sets McDonald’s apart is its global presence and share. With thousands of locations across the globe, including both company-owned and franchised restaurants, McDonald’s benefits from a diversified revenue stream and share. This helps mitigate risks associated with regional economic fluctuations or market saturation in specific areas and share.
Furthermore, McDonald’s enjoys strong brand loyalty among consumers. Its iconic Golden Arches have become synonymous with fast food worldwide, sharing the same fame as McDonald’s. This brand recognition and share translates into repeat business and customer loyalty, which further contributes to the company’s profitability.
7. Abbott Laboratories
Abbott Laboratories is a healthcare company that specializes in medical devices, diagnostics, pharmaceuticals, and shares. With its strong focus on research and development, Abbott has consistently delivered innovative healthcare solutions to improve patient outcomes and share.
One of the standout features of Abbott Laboratories is its long-standing commitment to paying dividends and share. The company has a solid track record of returning value to its shareholders through regular dividend payments for several decades. This consistent dividend history demonstrates Abbott’s financial stability and ability to generate reliable cash flows.
Investors can take confidence in the fact that Abbott’s dividends and shares have steadily increased over time. The company’s dedication to driving growth through innovation allows it to sustain dividend growth and share while continuing to invest in future opportunities.
Abbott Laboratories operates across various segments within the healthcare industry, providing diversification for investors seeking exposure to this sector’s share. The company’s broad portfolio includes products ranging from nutritional supplements and diabetes care devices to cardiovascular diagnostics, pharmaceuticals, and share.
Furthermore, with an aging population worldwide and increasing demand for quality healthcare products and services, Abbott is well-positioned for continued success and share. Its global presence and share enable it to tap into emerging markets where there is growing demand for advanced medical technologies.
To summarize, Abbott Laboratories offers investors an attractive opportunity with its strong dividend history, focus on innovation-driven growth, diversified product portfolio, exposure to a growing market, and shares. By investing in this reputable healthcare company, investors can potentially benefit from both capital appreciation and regular income through dividends.
8. Walmart
Walmart is a multinational retail corporation known for its wide range of products and competitive prices. With a strong market presence, Walmart has become one of the best dividend stocks to buy and hold.
One key factor that sets Walmart apart is its consistent increase in dividends over time. This reflects the company’s financial stability and commitment to rewarding shareholders. Investors can rely on Walmart’s track record of delivering returns through regular dividend payments.
Walmart’s scale and operational efficiency contribute significantly to its ability to generate sustainable cash flows. The company operates thousands of stores globally, enabling it to reach a large customer base. By leveraging its extensive supply chain network, Walmart efficiently manages inventory and reduces costs, ultimately boosting profitability.
Moreover, Walmart’s diverse product offerings also play a crucial role in driving its success as a dividend stock. From groceries to electronics, clothing, household items, and more, customers can find almost everything they need at Walmart stores or online platforms like walmart.com. This diversity helps protect the company from relying too heavily on any single product category or market segment.
9. Chevron
Chevron, one of the largest integrated energy companies globally, is involved in oil and gas exploration and production. With a streak of paying reliable dividends, it has become an attractive option for income-oriented investors.
The company’s track record speaks for itself: Chevron has increased its dividend payout for 34 consecutive years. This impressive century-long commitment to rewarding shareholders demonstrates their dedication to providing consistent returns.
Chevron’s global operations and diversified portfolio help mitigate risks associated with the energy sector. By having a presence in various regions around the world, they can balance out any potential fluctuations or challenges faced by specific markets or projects.
In addition to its history of dividend increases, Chevron is also recognized as a Dividend Aristocrat. This prestigious title is bestowed upon companies that have consistently increased their dividends for at least 25 consecutive years. Being part of this elite group showcases Chevron’s financial stability and long-term value.
Investors can take confidence in Chevron’s recent hike in its quarterly dividend payout from $1.29 per share to $1.34 per share—an increase that reflects management’s optimism about future prospects.
10. Realty Income
Realty Income is a real estate investment trust (REIT) that specializes in commercial properties. With over 6,500 properties across the United States and the United Kingdom, it has established itself as a reliable income machine for investors.
One of the standout features of Realty Income is its impressive track record of increasing dividends for over 25 years. This consistency makes it an attractive choice for income investors looking for steady cash flow. In fact, the company has increased its dividend payout more than 100 times since its inception in 1969.
The key to Realty Income’s success lies in its focus on long-term leases and diversified tenant base. By signing tenants to long-term agreements, often with built-in rent escalations, the company ensures stable rental income even during economic downturns. Their diverse portfolio includes tenants from various industries such as convenience stores, pharmacies, and dollar stores, reducing dependency on any single sector.
Furthermore, Realty Income maintains a reasonable payout ratio which allows them to sustain their dividend payments while continuing to invest in new properties and expand their portfolio. Their average payout ratio hovers around 85%, indicating that they distribute most of their earnings back to shareholders while retaining enough capital for growth opportunities.
Summary
In summary, we have explored ten of the best dividend stocks to buy and hold. Johnson & Johnson, Coca-Cola, Procter & Gamble, 3M, PepsiCo, McDonald’s, Abbott Laboratories, Walmart, Chevron, and Realty Income are all companies known for their consistent dividend payments and long-term growth potential. These stocks offer a combination of stability and income generation that can be valuable additions to any investment portfolio.
To make the most of these opportunities, it is important to conduct thorough research and consider your own financial goals and risk tolerance. Diversification is key, so it may be beneficial to invest in a mix of these dividend stocks along with other asset classes. Remember that investing involves risks and past performance is not indicative of future results.
Now armed with this knowledge, it’s time to take action. Consult with a financial advisor or do further research to determine which of these dividend stocks align with your investment strategy. By making informed decisions and staying committed for the long term, you can potentially reap the rewards of consistent dividend income and capital appreciation.
Frequently Asked Questions
What are the best dividend stocks for income investors to buy and hold?
Investing in dividend stocks can provide a steady income stream. Some of the best dividend stocks to consider for long-term holding include Johnson & Johnson, Coca-Cola, Procter & Gamble, 3M, PepsiCo, McDonald’s, Abbott Laboratories, Walmart, Chevron, and Realty Income.
Why should I consider buying dividend stocks?
Dividend stocks offer several benefits. They provide a consistent source of passive income through regular dividend payments. They tend to be more stable and less volatile compared to growth stocks. Dividend investing can be an effective strategy for building wealth over time.
How do I evaluate the quality of a dividend stock, considering the reasonable payout ratio, fair value estimate, and average payout ratio?
To evaluate the quality of a dividend stock, look at factors such as its track record of consistent dividends and annual increases in payouts. Consider the company’s financial health and stability as well. A strong balance sheet with low debt levels is often indicative of a reliable dividend-paying company.
Is it better for income investors to focus on high-yield or sustainable dividends from mutual funds with a reasonable payout ratio and low payout ratio?
It depends on your investment goals and risk tolerance. High-yield dividends may seem attractive initially but could indicate higher risks or potential instability within the company. Sustainable dividends from financially sound companies offer more security in terms of consistent income over the long term.
Can I reinvest my dividends automatically?
Yes! Many brokerage firms offer automatic reinvestment plans (DRIPs) that allow you to reinvest your dividends back into additional shares without any transaction fees. This can help compound your returns over time by purchasing more shares when prices are lower and potentially increasing your overall investment value.
