As a result, dividend stocks are among the most popular assets that investors like to hold in their portfolios. While all dividend stocks will pay out some form of a dividend, not all dividend stocks are created equal. This post will examine 5 of the best Dividend Aristocrats available on the market today. To qualify as a Dividend Aristocrat, a company must have increased its dividend payment for 25 consecutive years. All stocks highlighted below will have at least a 4% dividend yield.
5 Dividend Aristocrats With the Highest Yield Right Now
If you are investing in the stock market, there are generally only two ways to make money: dividends or capital gains. Dividends are payments that companies make to their shareholders for investing in the company. When these companies make a profit, they share part of those profits with their shareholders in the form of dividends.
AbbVie (ABBV) - 4.75%
AbbVie is a dividend stock investor favorite, and it is not difficult to see why. This pharmaceutical behemoth is responsible for developing a series of blockbuster products that have generated considerable revenues for over half a decade.
As is usually the case with pharmaceutical companies, ABBV is currently preparing itself for the expiration of several patents in the coming years. To protect itself from the inevitable loss of the patent protection they currently enjoy on a number of products, ABBV is actively investing in research and development as well as acquiring new companies. The pharma giant does this in an effort to expand its product lines and secure new revenue streams.
Over its near 10 year history, ABBV has produced some wonderful results for its investors. They have delivered over 13% annual growth revenue since founded in 2013 and increased their dividends by 225%. They currently have a dividend yield of 4.75% and a share price of $118 per share which represents a growth rate of 13% over the past year.
Chevron (CVX) - 4.57%
With the current hype around EV’s and green energy, seeing Chevron on this list may surprise some readers. Chevron remains an exciting opportunity for dividend investors despite the overall market rotation into EV and other green stocks.
CVX provides a comprehensive range of high-quality refined products, including gasoline, diesel, oils, lubricants, and aviation fuel. While the world may be going green, the reality remains that we are still highly dependent on these products and will likely continue to be dependent for some time. As a result, CVX continues to be a great addition to any dividend stock portfolio. With a 4.57% dividend yield and a YTD return of 35%, Chevron is a highly recommended stock by experts, so a great addition to your dividend stock portfolio.
ExxonMobil (XOM) - 5.55%
Following on from our Chevron pick, ExxonMobil is another recommendation that may surprise some readers. XOM’s product lines include crude oil products that range from plastic bottles to packaging materials and synthetic rubber as well as countless other consumer goods.
For many of the same reasons as above, it is unlikely that our reliance on these types of products is going to dissipate in the near future and as a result of this, XOM remains one of the best dividend stocks on the market. They currently have a strong 5.55% dividend yield, and their stock has returned an impressive 48% YTD.
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International Business Machines (IBM)- 5.62%
International Business Machines is one of the most well-entrenched companies on our list. Founded in 1911, it’s safe to say they aren’t going away anytime soon. While its core business traditionally revolved around the sale of hardware products, since it acquired Red Hat in 2019, IBM has been transitioning its business to software products and cloud services in an attempt to combat its declining revenues.
This transition is expected to generate consistent revenues in the coming years and compound the amount of free cash flow this stock market titan already generates. IBM has increased its dividend payouts for almost three decades now and currently boasts a very healthy 5.62% yield. They are currently trading for $118 per share which represents a 14% decline over the past 6 months.
According to experts, for investors looking for a good entry point into a strong dividend stock with a respectable yield and meaningful revenue growth prospects over the coming years, IBM is a brilliant opportunity at current prices.
AT&T (T) - 8.5%
With an 8.5% dividend yield, AT&T is definitely the highest yield stock on our list and is also perhaps the most controversial. T stock fell to a 12 year low of $12.61 per share after Jeff McElfresh, AT&T’s CEO of communications, informed investors that he fully expects a decline in the growth of its customers.
While AT&T had enjoyed a surge in new customers in recent quarters, it is likely that this surge was the result of the stimulus packages that had been introduced due to the pandemic and it was unlikely that growth would sustain itself once the economic stimulus packages are gone. With this most recent uplifting news about T stock, you’re probably wondering why it is on our list?
At this point, the downside is minimal when compared to the potential rewards, according to some experts. Firstly, AT&T offers a dividend yield almost twice as high as some of the other stocks on this list. That fact alone makes them a very attractive addition to any portfolio. Secondly, since the stock is currently trading at such a low price, share buybacks are definitely on the table. If AT&T were to decide to lower their debt and purchase back some shares, this would provide substantial returns in the form of capital gains for investors.
Finally, AT&T is a media and streaming telecommunications titan capable of expanding its services and growing revenues in many ways. Suppose management can properly execute on expanding revenue streams and refocus efforts to improve the efficiency of their core business. In that case, AT&T may prove to be one of the best dividend aristocrats yet.
Dividend stocks are a fantastic way to hedge against market volatility and secure some healthy cash flow which can then be reinvested into your portfolio.
If you are considering rotating into a dividend-producing investment portfolio, you should consider the 5 Dividend Aristocrats mentioned above.
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