Dividend Stocks Worth Holding
When it comes to building long-term wealth, there are few investments that can match dividend stocks. Because they pay out a dividend each year (and sometimes more frequently) these stocks offer a very safe way to generate extra income from your assets.
What makes dividend stocks even more attractive is that they are generally offered by the largest, most stable companies in a given market. In the US, this means companies like Coca Cola, IBM, and Pfizer.
These are all companies which are valued at more than $100 billion, offer substantial current yields of more than 2%, and have a history of long-term stability.
For investors, this makes the best way to work with these stocks a very simple one – buy them, and then hold them forever.
In this article, we’ll take you through seven of our favorite dividend stocks. These are all stocks that offer high dividends, long-term stability, and reliable returns.
JP Morgan Chase
Current yield: 2.5%
Market capitalization: $482 billion
JPM is one of the biggest banks in America, and offers a huge range of financial services to a huge range of customers.
Though the company is known primarily for its investment products, its consumer and small-business banking services that generate the most reliable profits here.
The dominant position of JPM has also been sustained through some of the most tumultuous markets ever known.
The bank managed to navigate through the 2008 recession much more effectively than some of its rivals, suggesting that it has the leadership expertise to rise to the biggest challenges.
Johnson & Johnson
Current yield: 2.7%
Market capitalization: $422 billion
J&J is another company with a long and illustrious history, and one that includes delivering reliable returns for investors.
Today, the company has a wide range of holdings and expertise, owning the brand names for many common medicines as well as investing in research.
This has led to it becoming one of the most trusted companies in the US when it comes to generating returns on stock investments.
As just one indication of that, JNJ is one of just two AAA U.S. stocks when it comes to debt ratings – the other being Microsoft.
Combine this with the fact that the company has increased its already generous dividend once a year for six decades running, and you have a value proposition that is hard to beat.
Proctor and Gamble
Current yield: 2.5%
Market capitalization: $343 billion
PG is often overlooked when it comes to building stock portfolios, but it shares some of the key features of the other companies on this list – most importantly, a record of increasing dividends for decades running.
It’s not the most glamorous of brands, and you are unlikely to see huge short-term gains on investment in this stock, but when it comes to building long-term wealth there are few investments that can beat putting money behind a consumer staple like PG.
Coca-Cola
Current yield: 3.1%
Market capitalization: $234 billion
Despite years in the business, Coke shows no signs of slowing down. The empire that the company slowly built, based on the eponymous soft drink, has become more diverse in recent years, leading industry analysts to predict another few decades of growth for the company.
KO is a very attractive option for long-term investors for a number of reasons. One is simply that the size of the company makes it very stable – with a market value of more than $230 billion and revenue of roughly $40 billion annually worldwide, the company is enormous.
Another is that the yield of the stock has remained high throughout some truly volatile market conditions.
Verizon
Current yield: 5%
Market capitalization: $211 billion
In the last few years, Verizon has emerged as one of the winners of the communications revolution. With skillful leadership, the company has managed to build on its success in telephony, and has invested heavily in the next generation of mobile networking technology.
The company already has a 5G offer that is expected to bring it significant rewards in the years to come.
For investors, there are more immediate reasons to love VZ stock. At the moment, the company is only paying about half of its operating profits as dividends – so even without future growth, there is plenty of headroom for future increases. And that’s as close to a sure thing as you can get nowadays.
Cisco
Current yield: 2.7%
Market capitalization: $232 billion
CSCO is another stock that can be easily overshadowed by its more famous peers. Cisco was operating in Silicon Valley – and making millions of dollars there – long before relative newcomers like Google and Facebook.
The company also takes a slower, more measured approach to change than some of its competitors, a fact which endears it to long-term investors.
Cisco is keen to repay the loyalty of these investors as well, and dividends are a part of this. Payouts have risen every year for a decade now – they began in 2011 at 6 cents quarterly per share, and have increased dramatically over the last decade to 37 cents per share in 2021.
Pfizer
Current yield: 3.8%
Market capitalization: $235 billion
Pfizer has been a huge, profitable company for many years now, but it has recently consolidated that position by participating in the Covid-19 vaccination research and roll-out process.
Though the pandemic brought Pfizer to prominence, the reality is that it already owned the license for many popular drugs, including its Prevnar pneumonia vaccine, Ibrance breast cancer drug and Eliquis blood thinner.
And even as the patents on these products expire, a strong research culture means that the company is likely to replace them, and to continue to generate returns for investors.
The Bottom Line
Dividend stocks should be part of any balanced investment portfolio, but especially those that are focused on building long-term value.
All of the companies on this list offer near-guaranteed returns on investment, and all are a great choice if you want to hold stocks for a long time. And with Wealthface, you have the opportunity to invest in these stocks seamlessly and from the comfort of your own home.
