Some investors concentrate their portfolios on just a handful of stocks. I like too many businesses to limit my choices. As a result, my portfolio is rather large -- typically between 40 and 50 stocks.
While many of these are growth stocks that don't pay dividends, quite a few of my holdings do. Here are the 12 best dividend stocks that I own right now.
Image source: Getty Images.
Energizing picks
As I looked through the dividend stocks in my portfolio, I noticed that they fell into three general categories. The biggest group included seven energy-related stocks.
| Company |
Dividend Yield |
|---|---|
| Air Products & Chemicals (APD 1.75%) | 2.1% |
| Brookfield Infrastructure Partners (BIP 2.82%) | 3.8% |
| Brookfield Infrastructure Corporation (BIPC 0.84%) | 3.2% |
| Brookfield Renewable Partners (BEP 1.63%) | 3.1% |
| Brookfield Renewable Corporation (BEPC 1.56%) | 2.9% |
| Chevron (CVX 0.75%) | 5.3% |
| Enterprise Products Partners (EPD 0.18%) | 8% |
Air Products & Chemicals just might be the most boring stock that I own. I included it in this category because the company is the global leader in supplying liquefied natural gas process technology and equipment. It also makes industrial gases used in refining as well as several other industries.
But this boring stock is also a Dividend Aristocrat with 39 consecutive years of dividend increases. Air Products & Chemicals has also beaten the S&P 500 over the last 10 years.
You probably noticed that there are quite a few Brookfields on the list. Brookfield Infrastructure Partners and Brookfield Infrastructure Corporation are the same business but with two stocks -- one limited partnership (LP) and one corporate structure (which doesn't have the tax complications of an LP). It's a similar story for Brookfield Renewable Partners and Brookfield Renewable Corporation.
Brookfield Infrastructure is involved in more than just energy. As its name indicates, the company focuses on infrastructure assets. These assets include natural gas pipelines, electricity transmission lines, railroads, toll roads, liquid natural gas terminals, cell towers, data centers, and more.
Brookfield Renewable is a major provider of renewable energy. It owns hydroelectric, solar, wind, and storage facilities on four continents.
Most investors are probably familiar with energy giant Chevron. The stock has been a longtime favorite for income investors.
Rounding out the list of energy-related stocks in my portfolio is Enterprise Products Partners. The company is a leading provider of midstream energy services related to natural gas, natural gas liquids, crude oil, refined products, and petrochemicals.
While Enterprise Products Partners offers the juiciest dividend in this group, I think that Brookfield Renewable (either of the two stocks) ranks as the best pick. The company has tremendous growth opportunities ahead as countries and big businesses move forward with carbon reduction initiatives.
Pharma power
I also own several big pharma stocks. All three offer attractive dividends and solid growth prospects as well.
| Company |
Dividend Yield |
|---|---|
| AbbVie (ABBV 0.25%) | 4.5% |
| Bristol Myers Squibb (BMY 0.96%) | 2.9% |
| Pfizer (PFE -0.12%) | 3.5% |
You won't find many better dividend stocks than AbbVie. It's one dividend hike away from becoming a Dividend King (S&P 500 members with at least 50 consecutive annual dividend increases). And while the company faces biosimilar competition for its top-selling drug Humira in 2023, it has a supporting cast of other products with fast-growing sales.
Bristol Myers Squibb will have some challenges of its own with generics for blood cancer drug Revlimid on the way. However, the company has a basket of promising new drugs on the market as well as a strong pipeline.
Pfizer might be one of the most underappreciated stocks on the market right now. Despite fantastic sales for its COVID-19 vaccine and several other of its products, its shares have lagged behind the overall market over the last 12 months.
I'm bullish about Pfizer, though. My view is that the company will continue to enjoy robust vaccine sales. I also think that Pfizer could launch another COVID-19 blockbuster next year with its antiviral drug PF-07321332.
The outliers
Now for the catch-all category. These two dividend stocks don't fit into the other groups but are rock-solid, in my view.
Innovative Industrial Properties is a real estate investment trust (REIT) that focuses on the U.S. medical cannabis industry. I think IIP is the best cannabis stock to buy right now. It probably has better growth prospects than any other dividend stock that I own.
PepsiCo is another stock that's a Dividend Aristocrat on the threshold of becoming a Dividend King. I don't particularly like the company's soft drinks, but I give a thumbs-up to its strong snacks business that's driving Pepsi's growth.
Averaging up
If you bought equally sized positions in each of these dividend stocks, your average dividend yield would top 3.7%. I suspect most income-seeking investors would find that yield quite attractive.
Even better, all of these stocks should have pretty good growth prospects over the next decade and beyond. Some of them could deliver especially impressive growth -- maybe even better than some of the other stocks that I own that don't pay dividends.
