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Investors love dividend stocks because they provide dependable income and a great opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or portfolio consists of income and stock appreciation.
Let's explore the concept of total return. Consider a stock you purchase at $20 that offers a 3% dividend. If the stock price rises to $22 within a year, your total return is 13%. This is calculated by adding the 10% increase in stock price to the 3% dividend.
Buying and holding quality companies that pay dependable, rising dividends is an investment strategy that never goes out of style. We screened our 24/7 Wall St. blue-chip dividend stock universe, looking for the best companies that pay at least a 5% dividend.
Five top stocks look like outstanding portfolio additions now. In addition to the five, investors may want to check out some additional dividend legends .
Why do we cover dividend stocks?
Where to find reliable passive income.
Dividend stocks provide investors with reliable streams of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner's continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
AT&T
This American multinational telecommunications holding company is headquartered in downtown Dallas, Texas.
The legacy telecommunications company has been undergoing a lengthy restructuring, which has lowered the dividend, which still stands at 5.92%. AT&T Inc. ( NYSE: T ) provides worldwide telecommunications, media, and technology services. Its Communications segment offers wireless voice and data communications services.
AT&T sells through its company-owned stores, agents, and third-party retail stores:
- Handsets
- Wireless data cards
- Wireless computing devices
- Carrying cases
- Hands-free devices
AT&T also provides:
- Data
- Voice
- Security
- Cloud solutions
- Outsourcing
- Managed and professional services
- Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers.
In addition, this segment offers residential customers broadband fiber and legacy telephony voice communication services.
It markets its communications services and products under:
- AT&T
- Cricket
- AT&T PREPAID
- AT&T Fiber
The company's Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.
BP
BP is a British multinational oil and gas company headquartered in London, England.
This company is a premier European integrated oil giant, paying shareholders a hefty 5% dividend. BP PLC ( NYSE: BP ) engages in the energy business worldwide.
It operates through four segments:
- Gas & Low Carbon Energy
- Oil Production & Operations
- Customers & Products
- Rosneft segments
BP produces and trades natural gas, offers biofuels, operates onshore and offshore wind and solar power generating facilities, and provides de-carbonization solutions and services, such as hydrogen and carbon capture, usage, and storage.
The company is also involved in the convenience and mobility business, which manages the sale of fuels to:
- Wholesale and retail customers
- Convenience products
- Aviation fuels
- Castrol lubricants
- Refining,
- Supply and trading of oil products
- Operation of electric vehicle charging facilities
In addition, it produces and refines oil and gas and invests in upstream, downstream, and alternative energy companies, advanced mobility, bio and low-carbon products, carbon management, digital transformation, and power and storage areas.
Bristol-Myers Squibb
This is one of the world's largest pharmaceutical companies, and it consistently ranks on the Fortune 500 list of the largest U.S. corporations.
This top company remains a solid pharmaceutical stock to own long-term, offering an outstanding entry point and a massive 5.84% dividend. Bristol-Myers Squibb Co. ( NYSE: BMY ) discovers, develops, licenses, manufactures, and markets pharmaceutical products worldwide.
The company offers products in these therapeutic classes:
- Hematology
- Oncology
- Cardiovascular
- Immunology
The company’s products include:
- Revlimid, an oral immunomodulatory drug for the treatment of multiple myeloma
- Opdivo for anti-cancer indications
- Eliquis, an oral inhibitor indicated for the reduction in risk of stroke/systemic embolism in NVAF and for the treatment of DVT/PE
- Orencia for adult patients with active RA and psoriatic arthritis, as well as reducing signs and symptoms in pediatric patients with active polyarticular juvenile idiopathic arthritis
Bristol-Myers Squibb also provides:
- Sprycel for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia
- Yervoy for the treatment of patients with unresectable or metastatic melanoma
- Abraxane, a protein-bound chemotherapy product
- Implicit for the treatment of multiple myeloma
- Reblozyl for the treatment of anemia in adult patients with beta-thalassemia
Comerica
Comerica is known for its unique niche in the banking industry, which combines big bank products and services with a more personalized touch.
Based in Dallas, this fast-growing banking center giant pays a substantial 5.41% dividend. Comerica Inc. ( NYSE: CMA ) provides various financial products and services.
The company operates through these segments:
- Commercial banking
- Retail banking
- Wealth management
- Finance
The Commercial Bank segment offers:
- Commercial loans and lines of credit
- Deposits
- Cash management
- Capital market products
- International trade finance
- Letters of credit
- Foreign exchange management services
- Loan syndication services
- Payment and card services for small and middle-market businesses, multinational corporations, and governmental entities
The Retail Bank segment provides:
- Personal financial services, such as consumer lending
- Consumer deposit gathering
- Mortgage loan origination and various
- Consumer products that include deposit accounts, installment loans, credit cards, student loans, home equity lines of credit
- Residential mortgage loans and commercial products and services to micro-businesses.
The Wealth Management segment offers products and services comprising:
- Fiduciary
- Private banking
- Retirement
- Investment management and advisory
- Investment banking and brokerage services
- Annuity products and life, disability, and long-term care insurance products
The Finance segment engages in the securities portfolio and asset and liability management activities.
Comerica operates in:
- Texas
- California
- Michigan
- Arizona
- Florida
- Canada
- Mexico
Dominion Energy
This is one of the largest producers and transporters of energy in the United States.
Many of the Wall Street firms we cover are still very positive on utilities despite the sharp move higher this year, and this company pays a strong 5.37% dividend.
Dominion Energy Inc. ( NYSE: D ) operates through four segments:
- Dominion Energy Virginia
- Gas Distribution
- Dominion Energy South Carolina
- Contracted Assets
The Dominion Energy Virginia segment generates, transmits, and distributes regulated electricity to residential, commercial, industrial, and governmental customers in Virginia and North Carolina.
The Gas Distribution segment engages in:
- Regulated natural gas gathering
- Transportation
- Distribution and sales activities
- Distributes nonregulated renewable natural gas
- This segment serves residential, commercial, and industrial customers.
The Dominion Energy South Carolina segment generates, transmits, and distributes electricity and natural gas to residential, commercial, and industrial customers in South Carolina.
The company's portfolio of assets included approximately:
- 30.2 gigawatts of electric generating capacity
- 10,500 miles of electric transmission lines
- 85,600 miles of electric distribution lines
- 94,200 miles of gas distribution lines
Dominion serves approximately 7 million customers.
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