If you’re interested in adding more dividend-paying stocks to your portfolio, that’s a fine idea. For one thing, dividend payers tend to be more established and reliable growers, since they have reached a point where management is confident it can commit to a regular payout to shareholders. Better still, dividend-paying stocks tend to outperform non-payers!
For example, a study by Hartford Funds and Ned Davis Research found that from 1973 to 2022, companies that grew or initiated dividend payments delivered annualized returns of 10.3%, while those that didn’t have payouts delivered a 3.95% annualized return and an equal-weight S&P 500 fund returned 7.7% annually. Oh, and the dividend payers were less volatile than their counterparts, too.
Here are four well-known companies that recently had hefty dividend yields. You might want to consider some for your portfolio or your watch list.
1. Verizon Communications
Verizon Communications (NYSE: VZ), with a recent market value near $180 billion, recently had a fat dividend yield of 6.6%. That payout hasn’t been growing briskly lately, but it’s quite generous as is.
Verizon bulls like its strong wireless network and its chances of making it stronger still. Also promising is that Verizon recently announced it’s buying Frontier Communications Parent for $20 billion to expand fiber services in the U.S.
Bears worry about the safety of the dividend, though, given Verizon’s substantial debt load. That’s worth keeping an eye on, but for now the company’s significant cash flow is enough to cover dividend obligations. In a show of confidence, management just increased the payout by 1.9%.
2. Citigroup
Citigroup (NYSE: C) operates one of the largest banks in the country and had a recent market value near $109 billion — and that’s after a recent drop of 16% from its 52-week high. It’s worth understanding that when a stock’s price drops, its dividend yield will increase.
That’s part of the reason the stock’s dividend yield was recently a satisfying 3.6%. Better still, that payout has been rising over time, jumping by 6% in its last…
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