If you’re seeking an investment in the stock market that will produce steady income and diversification, look no further than dividend stocks. As the economy reopens, many companies have reinstated their dividends, or even better, increased their payouts to their shareholders. And this has led many investors to look for stocks with the highest dividends. But smart investors know that yield isn’t everything when it comes to finding the best dividend stocks.
With many investors starting out in the stock market today, chances are they don’t really know where to begin. And that’s perfectly understandable. After all, dividend stocks aren’t exactly the type of investments that make the headlines. While they are not your typical investment that could breakout overnight, one thing most would agree is that they generally produce more stable returns than growth stocks.
Some of the investors love dividend stocks not only because of the compounding effect over the long run, but also the attractive growth prospects they entail. With all that being said, investors shouldn’t simply chase stocks with the highest dividends. Instead, they might want to consider stable companies with sustainable payout ratios and which are reasonably valued. Here are five top dividend stocks that could meet all these criteria.Dividend Stocks To Buy [Or Sell] Right Now
- Pfizer Inc. (NYSE: PFE)
- Brookfield Renewable (NYSE: BEP)
- McDonald’s Corp. (NYSE: MCD)
- Walmart Inc. (NYSE: WMT)
- Procter & Gamble Co. (NYSE: PG)
Pfizer has been grabbing headlines in the stock market and we all know that has to do with its COVID-19 vaccine. The company has been a long-time favorite for income investors. The drugmaker’s dividend yield currently stands at 3.9%. Recently, the company received the authorization from FDA to administer the company’s vaccine for adolescents aged between 12 and 15 years. This is certainly welcoming news that could help push its yield above 4%. The biotech giant has also recently announced its first-quarter financials.
From its fiscal first quarter, Pfizer posted quarterly revenue of $14.58 billion, a 45% increase year-over-year. A chunk of this revenue came from its vaccine segment, at $4.89 billion. Net income for the quarter was a cool $4.87 billion, also a 45% increase year-over-year.
With the coronavirus pandemic remaining a pressing issue for the world, I wouldn’t be surprised if the vaccine sales are going to be even higher over the next couple of years. Therefore, the company could be in a great position to deliver strong growth over the coming years. Given all of this, is PFE stock worth adding to your portfolio?
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Brookfield is one of the world’s largest publicly traded renewable power platforms. The company, which trades under the ticker BEP, is a limited partnership with dividend just slightly above 3%. The renewable energy company received renewed interest from investors recently after the Biden administration said it has a goal of creating 30 gigawatts of US offshore wind capacity by 2030. It also boasts nearly 6,000 generating facilities in North America, South America, Europe, and Asia. The company’s goal is to deliver long-term annualized total returns of 12% to 15%.
From its first-quarter results, revenue came in 2.9% lower to $1.02 billion. But the more important metric investors should not overlook is that its funds from operations grew 21% in the first quarter compared to the prior-year period.
Also, the company had invested or agreed to invest $1.6 billion of equity across a range of transactions. The company told investors that in the first quarter, it closed its first offshore wind investment. And investors seem to be delighted with the news. Considering all these, would you agree that BEP stock is in a strong position to capitalize on this rising demand for renewable energy?McDonald’s
Next, we have one of the leading fast-food restaurants in the world, McDonald’s. The fast-food chain has a dividend yield of 2.18%. It serves a locally-relevant menu of food and drinks at more than 39 thousand restaurants in over 119 markets globally. The company’s sales may have taken a huge hit during the onset of the pandemic, but it’s comforting to know that sales had rebounded strongly ever since. With the popularity of its recent “BTS Meal” deal, we can see that McDonald’s clearly has a few tricks up its sleeves.
From its first-quarter earnings report in April, global comparable sales increased 7.5% and consolidated revenues increased by 9%. The company has begun to lap the significant impact of COVID-19 on its global results beginning in March 2020.
On top of that, McDonald’s also announced it will increase the allocation of advertising dollars to diverse-owned media companies, production houses, and content creators over the next four years. This would help bolster individual businesses while creating deeper relationships with McDonald’s diverse customer base. With that in mind, would you consider buying MCD stock?
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Walmart is no doubt a household name and is the largest retailer worldwide. Through its massive network of hypermarkets spanning 24 countries, the company continues to dominate the retail space. According to Walmart, they have 10,000 stores that cater to an estimated 220 million customers and members globally. Notably, Walmart reported earnings per share of $1.69 on revenue of $138.3 billion for the quarter, beating Wall Street’s estimates. According to CEO Doug McMillon, this is mostly thanks to Walmart’s rapidly growing e-commerce sales.
Walmart announced its first-quarter result back in May. For the quarter, revenue came in 2.7% higher year-over-year to $138.3 billion. Looking forward, the company also seems confident, raising its full-year 2021 earnings outlook on anticipated “pent-up demand throughout 2021”.
While its brick-and-mortar business remains rock-solid, the company’s e-commerce business is also growing fast. The management expressed confidence that the growth of marketplace, fulfillment, and advertising can lift profit margins for the company as a whole. Considering the strong fundamentals, do you have WMT stock in your list of top dividend stocks to buy?Procter & Gamble
Procter & Gamble (PG) is a multinational consumer goods corporation. Earlier in April, the company announced a 10% increase in quarterly dividends, marking the 65th consecutive year that the company has increased its dividend. The company is able to maintain that consistent dividend streak because of its highly diversified business.
In essence, it specializes in a wide range of personal health/consumer health and hygiene products. Its consumer goods are sold in over 180 countries and territories. From its shaving products Gillette to beauty products like Pantene, chances are you have something in your house that is made by PG.
From its third-quarter financials, net sales for the quarter came in 5% higher year-over-year to $18.1 billion. Also, PG reported a diluted net earnings per share of $1.26, a 13% increase compared to a year earlier. P&G may have profited from pandemic-induced shopping trends last year, but analysts still expect its revenue and earnings to climb 6% and 10% respectively this year. Considering all these, will you buy PG stock?