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Dividend stocks are a favorite among investors for good reason. They provide a steady stream of passive income and offer a promising avenue for total return. Total return , a comprehensive measure of investment performance, encompasses interest, capital gains, dividends, and distributions realized over time.
I n simpler terms, it's the sum of income and stock appreciation. This means dividend stocks can boost investment success by delivering regular income and capital appreciation.
Friday's jobs report showed what many across Wall Street already knew. The economy is slowing fast, and many feel that the Federal Reserve has waited too long to lower interest rates. Given the weak report and the fact that most of the jobs that were created were government and healthcare, some now see as many as three 25 basis point rate cuts in 2024, with the first in September. Others predict the first rate cut could be 50 basis points or one-half of 1%.
With yields plunging on government bonds, the 10-year closed below the 4% level for the first time since February. Where will investors turn for dependable passive income streams? The best bet is high-yield dividend stocks, many of which have paid shareholders dependable quarterly dividends for 50 years and more.
We screened our 24/7 Wall St. high-yield dividend stock research database looking for blue chip companies offering solid upside potential and yielding at least 5%. Five top companies hit our screens, and all make sense for growth and income investors looking to take advantage of what could be a fast and furious rate-cut cycle. Investors should snag this report today.
Altria
Altria is one of the world's largest producers and marketers of cigarettes and other tobacco-related products.
This tobacco company offers value investors a great entry point now and a rich 7.84% dividend. Altria Group Inc. ( NYSE: MO ) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.
The company provides cigarettes primarily under the Marlboro brand, as well as:
- Cigars and pipe tobacco, principally under the Black & Mild brand
- Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
- on! Oral nicotine pouches
It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.
Altria used to own over 10% of Anheuser-Busch InBev S.A. ( NYSE: BUD ), the world's largest brewer. The company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves a hefty 8% of the outstanding shares in its back pocket. It also announced a $2.4 billion stock repurchase plan partially funded by the sale.
Energy Transfer
Energy Transfer is one of North America's largest and most diversified midstream energy companies.
This top master limited partnership is a safe way for investors looking for energy exposure and income, as the company pays a massive 7.91% distribution. Energy Transfer L.P. ( NYSE: ET ) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins.
The company is a publicly traded limited partnership with core operations that include:
- Complementary natural gas midstream
- Intrastate and interstate transportation and storage assets
- Crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets
- NGL fractionation and various acquisition and marketing assets
Energy Transfer owns and operates more than 114,000 miles of pipelines and related assets in all significant U.S.-producing regions and markets across 41 states, further solidifying its leadership position in the midstream sector.
Through its ownership of Energy Transfer Operating, the company also owns Lake Charles LNG Company, the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco L.P. ( NYSE: SUN ), and the public partner interests and 39.7 million standard units of USA Compression Partners L.P. ( NYSE: USAC ).
Franklin Resources
Franklin Resources, one of the world's largest investment managers, is better known as Franklin Templeton.
This company is a mutual fund powerhouse that pays a safe and secure 5.58% dividend. Franklin Resources Inc. ( NYSE: BEN ) is among the most prominent global money managers.
The firm markets mutual funds and institutional separate accounts under the Franklin, Templeton, and Mutual Series brands. At times, 50% of its sales are from outside the US, an advantage given the maturing US market.
Franklin Resources offers its products and services under the brands of:
- Franklin
- Templeton
- Franklin Mutual Series
- Franklin Bissett
- Fiduciary Trust
- Darby
- Balanced Equity Management
- K2
- LibertyShares
- Edinburgh Partners
The 2023-2024 bull market has proven to be a solid tailwind for the company. While withdrawals from baby boomers may be a concern, the path forward looks solid.
Pfizer
Pfizer is an American multinational pharmaceutical and biotechnology corporation headquartered at The Spiral in Manhattan.
This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been crushed as many are not getting boosters. Pfizer Inc. ( NYSE: PFE ) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide and pays a hefty 5.48% dividend, which has risen yearly for the past 14 years.
The company offers medicines and vaccines in various therapeutic areas, including:
- Cardiovascular metabolic and women's health under the Premarin family and Eliquis brands
- Biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi brands
- Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga, and Paxlovid brand
Pfizer also provides medicines and vaccines in various therapeutic areas, such as:
- Pneumococcal disease, meningococcal disease, tick-borne encephalitis
COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba, and the Prevnar family brands - Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis, and Cibinqo brands
Amyloidosis, hemophilia, and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX, and Genotropin brands
Trading not far above its lowest split-adjusted level in thirteen years, the stock is an incredible bargain at current levels and pays a massive dividend. Second quarter results saw revenues come in above estimates while earnings-per-share lagged by a stunning 97%. The company did raise guidance by $1 billion for 2024.
Patient investors will get paid one of the highest blue-chip dividends going, and shares trade at a reasonable 10.83 times estimated 2025 earnings.
Verizon Communications
Verizon is the world's second-largest telecommunications company by revenue and its mobile network is the largest wireless carrier in the United States, with 114.8 million subscribers.
This top telecommunications company offers tremendous value, trading at just 8.7 times estimated 2025 earnings and paying investors a hefty 6.51% dividend. Verizon Communications Inc. ( NYSE: VZ ), through its subsidiaries, provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide.
It operates in two segments:
- Verizon Consumer Group
- Verizon Business Group
The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements.
It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as smartphones, tablets, smartwatches, and other wireless-enabled connected devices.
The segment also offers wireline services in Mid-Atlantic, Northeastern United States, and Washington D.C. through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network.
The Business segment provides wireless and wireline communications services and products, including:
- FWA broadband
- Data
- Video and conferencing
- Corporate networking
- Security and managed network
- Local and long-distance voice
- Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally
Six Dividend Kings Every Passive Income Investor Should Own
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