5 Rock-Solid Dividends to Buy Today

One of the best ways for investors to make money investing is by looking for companies that pay regular dividends. This is one of the best ways for companies to pay investors back and it forces management to focus on cash flow, which is what investors like.

With the 10-year Treasury currently paying just 2%, dividends from solid companies that will be around for the long haul are a way for investors to make a better yield and potentially benefit from price appreciation. Here are five dividend stocks from rock-solid companies that yield more than Treasuries.

Intel
There is a lot of pessimism in the investment community over any company with ties to the PC. One of the poster children is Intel (NASDAQ: INTC  ) , the chip maker that has dominated the PC for decades but has struggled to get any meaningful share in the mobile space. Intel has been stagnant as the PC declines, but the market is treating the stock as if PCs will die tomorrow and Intel won't ever be able to take meaningful share in the mobile space. I just don't think either is the case and I believe there's upside to go along with a great dividend. 

Intel has $18.2 billion in cash, pays a lofty 4.3% dividend yield, and has a P/E ratio of just 10. As long as the PC doesn't die tomorrow, investors should be getting a great dividend for years to come.  

3M
Want a rock-solid dividend? How about a company that has paid a dividend for 96 consecutive years and has increased that dividend 55 years in a row? Let me offer up 3M (NYSE: MMM  ) . The company makes everything from Post-it Notes to bandages, products many of us don't think twice about purchasing on a regular basis. This creates a company so diversified that its dividend is safe even through disastrous economic and financial situations.  

Right now, 3M yields 2.5% for investors, and if 55 years of dividend growth continues, it is likely to outyield the Treasury on a cost basis for shareholders for years to come. It may not be as safe as a Treasury, but it's close.

Verizon
Warren Buffett often talks about investing in companies with a competitive moat. There may not be a better moat than Verizon (NYSE: VZ  ) subsidiary Verizon Wireless has in the U.S. mobile market. The company owns the spectrum to operate a wireless network, but even better is the capital cost it takes to put that spectrum to work. Verizon Wireless has spent billions of dollars building a 3G and now 4G wireless network to dominate the wireless space. It's this superior network that creates an advantage over AT&T and Sprint that is nearly impossible to catch up with. Verizon has staying power to attract customers and pricing power to charge those customers more money.

Verizon currently pays a 4.6% dividend yield, the highest on this list. But it also holds one of the strongest competitive advantages.

ExxonMobil
Let's be honest, the oil business isn't going anywhere anytime soon. Oil consumption may be falling domestically but it's rising globally, and ExxonMobil (NYSE: XOM  ) will be there to take advantage. The company also has large exposure to the natural gas market, which is struggling with lower prices but provides some diversification.

ExxonMobil generated $44.9 billion in earnings last year and $63.8 billion in cash from operations and asset sales. That's plenty of cash to pay a 2.6% dividend yield, which should continue to grow in coming years.

McDonald's
When the economy struggles, McDonald's (NYSE: MCD  ) does well; when the economy does well, McDonald's does well. Even when the country begins to worry about fat, carbs, or any other health factors, McDonald's seems to be able to adjust and grow. The company has one of the great global brands of our generation, something that doesn't come easily.

For investors, the company pays a solid 3.2% dividend and trades at just 15 times forward earnings. That's a value dividend investors should love.

Foolish bottom line
Focusing on dividends is one of the best ways to build long-term wealth. These five stocks have dividends that should be safe for years, if not decades to come. 

If you're interested in learning more about 3M, check out The Motley Fool's comprehensive new research report on the company. Find out whether 3M can continue its long history of invention and innovation to boost your portfolio. As a bonus, you'll receive a full year of key updates and guidance as company news develops, so don't miss out -- simply click here now to claim your copy today.


Read/Post Comments (6) | Recommend This Article (74)

Comments from our Foolish Readers

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 February 12, 2013, at 8:19 PM, lmills5 wrote:

    I'm surprised Waste Management is not part of the list. Their dividend is over 4% and garbage is not going away.

  • Report this Comment On February 13, 2013, at 12:41 AM, JF125780 wrote:

    Hi Travis, I'm surprised you left out LVS and Wynn. The best entertainment around the world is not going away.

    Where else can you take a vacation for the whole family and possibly come back a winner.

    A vacation where there is something for everyone in the family to do.

    I do like your choices and Imills5 choice of Waste Management.

    Danny Kowkabany

  • Report this Comment On February 13, 2013, at 11:45 AM, TMFFlushDraw wrote:

    @JF125780

    I like LVS and WYNN but calling their dividends rock solid is a stretch. Just see 2009 to see how quickly gaming revenue can dry up when the economy goes south.

    In this list I was going for rock solid staying power. Cell phones, oil, fast food, computer chips, and Post-It Notes are necessities, unlike gambling and $20 cocktails (as much as I may enjoy both).

    Travis Hoium

  • Report this Comment On February 14, 2013, at 12:37 PM, theleo wrote:

    What about Johnson & Johnson???

  • Report this Comment On February 16, 2013, at 12:03 AM, whyaduck1128 wrote:

    I'm with FlushDraw concerning casino stocks. During my last trip to Las Vegas two months ago, I like to hear how those closest to the action in any industry see things, so I asked cab drivers, waitresses, and casino workers how they view their town and the gambling industry right now.

    Their verdict is that things are blah and will stay so for another four years, minimum. Vegas goes as the overall economy goes, and not one of these people were optimistic about the next four years. I can't tell you how many times I heard sentences start, "I'm a lifelong Democrat, but..."

    As for my picks--I already own some MCD and INTC, and I'm looking at MMM and XOM. My "add it to the list" stock is boring old PG.

  • Report this Comment On February 16, 2013, at 8:47 PM, kevcl747 wrote:

    Exxon Mobile has one fundamental problem which is production is falling and they have very little exposure to the new domestic shale oil boom. Hard to get too excited about a paltry 2.6 % dividend as well ! Pipeline MLPs seem like a better deal. Higher yields with less exposure to the biz cycle .

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