Top 10 US dividend stocks
Creating passive income in US dollars by investing in dividend stocks is a great idea for capital preservation and appreciation. The Fed's rate hike is approaching, which means a good US market correction is imminent and an opportunity to buy US stocks at a discount will open up. We have selected the top 10 US stocks that pay high dividends in dollars and therefore promise high returns.
I'll make a caveat right away that the expected dividend yield from the stocks listed below will be around 3.5% per annum (in dollars), but could rise to 4.5% if the circumstances are favorable. I leave the quality and reliability of the selected securities out of the brackets, because it is presumed.
Philip Morris International Inc (PM)
Shares of the world's largest tobacco company have shown good volatility in 2021, but are still recommended to buy as they offer a high dividend yield of 4.9%. You may have heard that Philip Morris is facing some problems due to declining cigarette sales. You should not be alarmed by that fact, because at the same time sales of heated, non-flammable products are increasing, which more than offset the decline in sales of classic cigarettes. As a result, Philip Morris' total revenue is growing year on year.
The plan for 2023 is to increase the share of sales of high-margin products from 30% to 50%, which is why analysts expect Philip Morris' stock to rise 10-12% over the next few years.
Exxon Mobil Corp (XOM)
Exxon Mobil shares are highly dependent on the price of oil, which systematically goes through a cycle of rising and falling prices. Consequently, Exxon Mobil's yield and dividend size will both be determined by the oil price cycle.
The company's management is building a long-term policy to attract investors and encourage them to hold securities for the long term. In view of this, measures have been taken to raise the dividend for 38 consecutive years.
Exxon Mobil spares no money on bold oilfield investment projects that pay for themselves within 3-4 years.
Exxon Mobil stock had a dividend yield of 3.5% in 2021, and this year's figure is likely to be even higher.
It can be concluded that Exxon Mobil Corp (XOM) is deservedly one of the top 10 dividend stocks in the US for 2023.
Verizon Communications Inc (VZ)
The communications segment is considered a real cash cow for a reason and Verizon Communications is no exception to the rule. The dividend yield of 4.7% will not leave any investor who chooses to build a dividend portfolio of U.S. stocks as a strategy.
Verizon is pouring impressive amounts of money into capital expenditures and expanding its footprint in the 5G, satellite and transport communications sectors. In short, the company is very well managed, reliable, stable and when buying its shares there is not the slightest doubt about the correctness of the choice made.
The only disadvantage of the company Verizon can be recognized the lack of growth of shares and relatively high volatility. Thus, your dividend yield may be somewhat lower than expected if you fail to guess the entry point. I can recommend using an averaging strategy to reduce risk.
Don't forget about the prospects of 5G network, which differs from the previous generation networks not only in terms of speed but also in terms of reliability. The use of 5G in the future could usher in a new era in telecommunications (artificial intelligence, unmanned driving, internet of things, industrial robots), which will significantly increase Verizon's revenue and then the amount of its dividend.
AbbVie Inc (ABBV)
The stock has a high dividend yield of 4.7% and a low forward P/E price target below 10. I think you are unlikely to find a better offer in the US equity market today, especially when it comes to the medical sector.
On the plus side, AbbVie has an expected growth rate of 5-9% over the next few years, as well as a high degree of adoption by the company in the development and marketing of cutting-edge medicines. This can be considered a kind of capital expenditure.
Prudential Financial Inc (PRU).
The company is in the life insurance business. By 2023, Prudential Financial's stock rose 38%, making it one of the most interesting companies in the U.S. insurance market. Since 2021, the company has been looking to develop a broader range of financial products, moving away from a single-point life insurance line, which has resulted in a significant increase in revenues and the company's own appeal to investors.
Prudential Financial recently sold its businesses in Korea and Taiwan, generating $6 billion in revenue that has been reinvested in faster-growing products. The move will allow the company to grow even faster. On a separate note, Prudential Financial has $400 billion in bonds and cachet on its balance sheet, allowing the company to almost completely deleverage its operations.
I consider this company fairly safe with a good balance sheet and dividend yield. I can recommend it for your portfolio, but the choice, as always, is up to you.
Lockheed Martin Corporation (LMT)
A classic American defense-industrial company that pays a dividend of 3%, which is much higher than that of other companies from the same sector.
According to Bloomberg, Lockheed Martin received contracts worth approximately $75.8 billion. The implementation of said contracts allowed Lockheed Martin to make revenue that was still higher than the next three largest weapons contractors. So you have to understand that investing in Lockheed Martin is an investment in the real rock of the American war machine. The company is very reliable and of high quality.
The company's dividend policy is encouraging, as Lockheed Martin has shown a steady growth in payouts and the stock itself has shown a 700% increase over the last 20 years.
General Mills Inc (GIS)
This is a company that operates in the food sector. Its rapid growth over the past few years has been driven by a pandemic-driven restructuring. Having gained an advantage in the market, General Mills has not been confused and has begun to develop in new directions. Today the company not only deals with human food, but also produces and markets pet food.
On the downside, the company has had problems due to high inflation rates. General Mills' management made a strategic decision to pass on inflationary costs to consumers and did not make a mistake. As a result, revenues increased and the company continued to show strong growth in real terms.
Broadcom Inc (AVGO)
A stock with an incredible performance that has been rising since the start of the pandemic to this day, meaning that in the long run it can be seen not only as a dividend US security, but also as a growth stock.
For the fourth quarter of 2021 Broadcom reported very good revenues which were up 15 percent, exceeding the consensus forecast by 0.1 percent. The company reaffirms its dividend policy in the form of a large return to shareholders. At the same time, Broadcom manages to find money for buybacks.
Broadcom executives have said that the company's growth will continue by strengthening its leadership in franchises. The company has very strong potential in the semiconductor business and is well deserving of being in my top 10 dividend stocks in the US for 2023.
Coca-Cola Co (KO).
I'm sure this company doesn't need much introduction. Coca-Cola has been building dividends for 59 years uninterruptedly. There is a reason why Coca-Cola is crowned as the dividend king.
Today, the company not only sells its own branded classic sparkling water, but also trades in tea, drinking water and juices. Diversification reduces the company's margins, but by no means makes it bad, which means Coca-Cola is safe to buy.
Procter & Gamble Company (PG)
Procter & Gamble recently released another report and gave shareholders reason to rejoice, because the report came out better than expected - revenue growth was 6%, instead of the expected 3%.
Procter & Gamble's profitability is improving due to higher prices and cash flow is growing rapidly. The company's business picture is improving with each quarter, even though inflation-related costs are rising, as Procter & Gamble has managed to strike a balance between higher prices and higher profits from sales.
In 2023, the company aims to increase sales by 4-5 percent and profits should grow by 3.6 percent. The cash flow forecast has also been raised - Procter & Gamble management expects to return $17 to $18 billion to shareholders in 2023 (versus $15 to $16 billion in 2021), which means good dividends and a possible buyback that will support the stock price.
9 US stocks whose dividends have been growing for decades
People who invest for the long term appreciate the possibility of regular dividend increases, although they remain heavily influenced by earnings figures. History shows that it is more profitable to rely on stocks that do not pay out large sums in one year all at once, but gradually increase the percentage of dividends.
A rising dividend is a sure sign that the company's results and potential will become brighter. It is a direct hint that you are holding good assets. In this review, we covered US dividend stocks that have been steadily increasing their payouts for 20 years.
1. Clorox Co. [NYSE: CLX].
- Share price: $147.21
- Dividend yield: 2.52%
The main products of this giant company are the eponymous bleach, Kingsford charcoal and Glad rubbish bags. Clorox's dividend has grown over the last half century, as has the company itself. CLX shareholders have heard about the increase every year since 1977. Manufacturers of cleaning products and household cleaners rarely experience a dramatic rise in sales. But steady, small increases are a sign of competent management and a profitable business strategy. It's what you need for a long-term dividend investment.
2. AT&T [NYSE: T].
- Share price: $33.92
- Dividend yield: 5.90%
AT&T is one of the largest telecommunications companies in the world. Its stock has shown exemplary dividend stability for more than 30 years. The conglomerate operates a gigantic network of wireless telecommunications stations and $39 million in cash flows, and the company is valued at more than $230 billion.
This scale means AT&T can share profits generously with shareholders. It increased its quarterly dividend slightly at the end of 2017 and continued its 34-year tradition of increases. It is a safe asset for an investor with long-term plans.
3. McCormick & Co. [NYSE: MKC].
- Share price: $134.02
- Dividend yield: 1.56%
The McCormick food company has been paying dividends to shareholders for about 100 years and has been increasing it for 30 years. The products of the industry giant are sauces, spices and ethnic foods. There is always a place for the brand in the shopping trolley of the American consumer.
4: Hormel Foods Corp. [NYSE: HRL].
- Share price: $39.68
- Dividend yield: 1.90%
This corporation knows the tastes of American consumers well. Hormel makes signature lunches, Skippy peanut butter and Muscle Milk dairy products. HRL stock is a rare case of consistency in terms of increasing additional payouts - for 52 consecutive years, the corporation has added to its dividend payout. Hormel doesn't have crazy growth figures in its share price, but the necessary foundation for long-term investing is more than solid.
5. Exxon Mobil Corp. [NYSE: XOM].
- Share price: $86.15
- Dividend yield: 3.79%
Despite the development of alternative energy, fossil fuels remain as basic to humanity in 2018 as supermarket food. Exxon Corporation decided 10 years ago to get out of its oil dependency and diversify its business. So a deal was struck to buy XTO Energy for $41 billion, and the company began developing natural gas as well.
Exxon's diversified energy portfolio and annual revenues of up to $300 million guarantee stability and suggest that investors will continue to generate additional returns.
6. PepsiCo [NASDAQ: PEP]
- Share price: $107.52
- Dividend yield: 3.41%
Influenced by a popular culture that motivates people to give up sodas and junk food, one might think that Pepsi has an unenviable outlook. But this is not the case. Strong corporations know how to adapt to market demands.
Soft drinks and Doritos chips remain the corporation's main sources of income, but it has prepared "healthy" alternatives - Stacy's chips and Pure Leaf teas. PepsiCo knows how to sell, meet customer demands and manage intelligently. That's why it has increased shareholder dividends for 45 consecutive years.
7. Target Corp. [NYSE: TGT].
- Share price: $85.97
- Dividend yield: 2.96%
Retailer Target originated in Minneapolis in 1962 and went public in 1967. When it entered the stock market, the corporation was initially focused on paying dividends - shareholders received them as early as the first year. Target managed to increase these distributions annually for 47 consecutive years. Despite the serious challenges of the e-commerce era, its strong brand and dedication to principles make TGT a good choice for long-term investment.
8. Abbott Laboratories [NYSE: ABT]
- Share price: $72.04
- Dividend yield: 1.52%
Another stable sector to look out for when looking to earn dividends is healthcare. People get sick in both bad and good times, so demand for companies' services and products is not much affected by crises. Abbott is one of the oldest pharmaceutical brands, with a history that dates back to the late 19th century.
The list about US dividend stocks cannot do without ABT. This company is a long-time dividend payer on Wall Street. Shareholders have been receiving them for almost a century, with annual increases over the past 46 years.
Abbott Laboratories has a diversified product line that includes medicines, health food and baby food. The company has everything it needs to succeed, maintain its image and further encourage investors.
9. Consolidated Edison [NYSE: ED]
- Share price: $76.11
- Dividend yield: 3.71%
US dividend stocks are also in the utilities sector. Electricity is as important as food or sleep to 21st century man. The demand for utilities does not fluctuate, which is why investing in this sector is considered safe.
True, one can't expect much growth from utility companies either, as there are geographical monopolies, the industry is heavily regulated and there is limited opportunity for competition. Consolidated Edison serves New York City and the surrounding areas. Earlier this year, the company announced that its dividend percentage would be slightly increased. This marks the 44th consecutive year of annual payout increases.