10 Dividend Stocks for the Next Decade

With a stock market that's offered just 2% returns -- and that's not annually, that's 2% total returns! -- over the last decade, it's no surprise that investors are crazy about dividends and the ability to gain consistent income even in environments where the overall market is flat.

However, what could be shocking to many investors is that many dividend darlings paying juicy yields north of 5% have been consistently paying high yields for over a decade. Take dividend darling Annaly Capital Management (NYSE: NLY  ) . The company currently yields an astonishing 13.4%. That can't be sustainable, right?

Well, past results on its yield might surprise investors. At this date in each of the past 10 years, Annaly's dividend has exceeded 3.4%, a total nearly double where the S&P 500's overall 1.8% yield sits at today. Take a gander at the continued outsized dividends Annaly has paid out on this day over the past 10 years!

Source: Capital IQ, a division of Standard & Poor's. Yield calculated on June 9, or closest closing date for each year list.

The best part is, during the same period, Annaly's stock actually rose in accord with paying out all these dividends. Annaly's stock is 43% higher than it was at this time 10 years ago. Adjusted for dividends, the stock is up 327% during that time!

That can't be right!
You might be thinking Annaly represents some kind of anomaly that stands out from the pack of dividend stocks. However, it's hardly alone. I ran a screen looking for other stocks that are:

  • More than $1 billion in size. Sizable enough to help mitigate risk.
  • Traded on U.S. exchanges.
  • Yielding more than 3% today -- far greater than the S&P average of 1.8%.
  • And also yielded more than 3% on this day in every year over the last decade.

That kind of consistent payout is incredibly hard to achieve, so I was shocked to find that the screen showed me 98 companies! More importantly, there's something for every kind of dividend investor in the results.

The incredible dividend stocks I've uncovered don't only include companies with enormous payouts today, but also larger blue chip companies that can offer huge pay-outs and a strong sense of continuing stability.

The big-shot dividend payers
Even with Annaly paying out a juicy 13.4% dividend yield, it wasn't top among the list of these dividend superstars. No, that honor went to Terra Nitrogen  (NYSE: TNH  ) , which offers a whopping 15.8% yield. Best of all, the company is amazingly consistent in its payouts. To be fair, that 15.8% number is a forward yield that’s inflated because of a high recent payout. However, even looking back at the past year the stock yielded 8%, and long-term investors in the company have been well rewarded; after adjusting for dividends, investors in the company would have seen a return of more than 3,400% over the last decade.

Other than Annaly and Terra Nitrogen three other companies passing my strict screen of high dividend consistency offer yields exceeding 8%:

Company

Dividend Yield

Market Capitalization

BP Prudhoe Bay Royalty Trust (NYSE: BPT  ) 9% $2.2 billion
Ferrellgas Partners (NYSE: FGP  ) 9% $1.7 billion
Vector Group (NYSE: VGR  ) 8.6% $1.4 billion

Source: Capital IQ, a division of Standard & Poor's.

The megacaps
While the biggest yields might grab the headlines, there's something for dividend investors of all kinds. For investors looking for large companies with consistent earnings power, there's plenty to choose from. In fact, five companies worth more than $50 billion made the cut:

Company

Dividend Yield

Market Capitalization

PetroChina

                         4%

                     $300 billion

HSBC Holdings

                         3.6%

                     $177 billion

British American Tobacco

                         4.2%

                      $87.9 billion

Westpac Banking

                         7.1%

                      $63.3 billion

Altria Group (NYSE: MO  )

                         5.6%

                      $57.1 billion

Source: Capital IQ, a division of Standard & Poor's.

And if you're willing to go down to slightly smaller companies, both Enterprise Products Partners and Southern Co. (NYSE: SO  ) also pass my strict dividend screen and are worth more than $30 billion.

Finding better dividends
While a backward-looking list doesn't mean all these dividend superstars will be able to continue their run over the next decade, it is a great way to find ideas for companies with amazing payouts that have proven an ability to continue delivering cash to investors year after year. If you're looking for a group of dividend stocks that will continue to perform over the next decade, the stocks I've mentioned above are a fantastic place to start.

To continue on your search for the best dividend stocks in the market, Motley Fool expert dividend analyst created a free report called "13 High-Yielding Stocks to Buy Today." The report contains one of the names listed above, but also contains 12 other great dividend plays that should keep you set for the next decade. To get instant access to the names of these 13 high yielders, simply click here -- it's free.

Editor's Note: This article has been corrected to clarify yields are forwarding looking as calculated by Capital IQ, a division of Standard & Poor’s.

Eric Bleeker owns shares of no companies listed above. The Motley Fool owns shares of Altria Group and Annaly Capital Management. Motley Fool newsletter services have recommended buying shares of Enterprise Products Partners LP and Southern. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (5) | Recommend This Article (59)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 09, 2011, at 8:45 PM, yieldmaven1 wrote:

    Big fan of these mortgage REITs. The guys at seeking alpha did a decent job of comparing the 8 largest mortgage REITS. Anyone who thinks the recovery will be slow and choppy leading to sustained low rates should look into these. If you are a hyper inflationist who thinks Ben & Co. will increase rates to 10% with 9% unemployment... stay clear.

    http://seekingalpha.com/article/272417-comparing-the-8-large...

  • Report this Comment On June 10, 2011, at 2:04 AM, bigdividends wrote:

    To the author: You do realize that TNH does not pay a 15% payout. TNH does not pay a steady payout like JNJ or PM. Last year they paid about $10 in distibution not the $19 stated in yahoo. Yahoo is trying to calculate the yield based off last quarters payout. Not a very accurate way to calculate it for this company.

    I have owned TNH in the past. Excellent company but the income stream can vary widely from quarter to quarter.

  • Report this Comment On June 10, 2011, at 10:07 AM, pondee619 wrote:

    From: http://www.dailyfinance.com/quotes/terra-nitrogen-company-l-...

    Let's take the last 4 quarter dividend payments of 4.84; 1.36; 1.40; 2.36 totals 9.96 divided by share price of 125 = 7.9%. Not bad but surely NOT the " astonishing 13.4%" reported in the story. The fool is right in advising that you do your own research, just make sure that you DON'T DO IT HERE!

    For an organization touting the value of due diligence, they sure do show a lack of it in their "stories".

    5 Year Dividend History

    Payable Amount/Share Ex-Date Record Declaration

    05/27/2011 $4.84 05/12/2011 05/16/2011 05/05/2011

    03/01/2011 $1.36 02/17/2011 02/22/2011 02/11/2011

    11/29/2010 $1.40 11/10/2010 11/15/2010 11/04/2010

    08/25/2010 $2.36 08/06/2010 08/10/2010 07/29/2010

    05/27/2010 $1.25 05/06/2010 05/10/2010 04/29/2010

    11/24/2009 $1.63 11/04/2009 11/06/2009 10/23/2009

    08/27/2009 $2.22 08/05/2009 08/07/2009 07/24/2009

    05/27/2009 $2.10 05/01/2009 05/05/2009 04/22/2009

    02/27/2009 $2.97 02/12/2009 02/12/2009 02/11/2009

    11/25/2008 $2.80 11/05/2008 11/07/2008 10/24/2008

    08/28/2008 $3.63 08/06/2008 08/08/2008 07/25/2008

    05/28/2008 $4.20 05/06/2008 05/08/2008 06/02/2008

    02/27/2008 $4.45 02/08/2008 02/12/2008 02/09/2008

    11/26/2007 $2.10 11/06/2007 11/08/2007 10/26/2007

    08/27/2007 $3.00 08/07/2007 08/09/2007 07/27/2007

    05/29/2007 $1.57 05/08/2007 05/10/2007 04/27/2007

    02/27/2007 $0.97 02/13/2007 02/15/2007 02/09/2007

    11/27/2006 $1.00 11/07/2006 11/09/2006 10/27/2006

    08/25/2006 $0.92 08/07/2006 08/09/2006 07/28/2006

  • Report this Comment On June 10, 2011, at 10:33 AM, TMFRhino wrote:

    bigdividends, pondee619

    You're correct, that was sloppy of me to not note these forward P/E's can be inflated. I've requested a change to clarify that its trailing yield is closer to 8%.

    Thanks for reading,

    Eric

  • Report this Comment On June 10, 2011, at 10:48 AM, TMFRhino wrote:

    forward P/E's... Blargh (Sloppy again!), forward yields.

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