The list of the most popular Robinhood stocks is, of course, constantly changing according to circumstances, individual company performance, and investor tastes. But on that lineup of star companies, we can always find solid, high-yield dividend stocks.
Recently I combed through the latest batch of the top Robinhood stocks to find three of these beauties. My digging unearthed ExxonMobil (XOM 0.02%), Pfizer (PFE -0.19%), and AT&T (T 1.88%). Here's a little more about the current state of these companies -- and, of course, their payouts.
Image source: Getty Images.
1. ExxonMobil
A rapidly rising oil price is bringing bullish investors back into ExxonMobil. But the sprawling global oil company has more going for it than just that pronounced upward movement. Another big appeal is the stock's quarterly dividend, which at $0.88 per share currently yields a very high 4.2%.
ExxonMobil, by the way, is a Dividend Aristocrat, one of the handful of S&P 500 index component stocks that have raised their payouts at least once annually for a minimum of 25 years in a row.
Now, consider the effects of the coronavirus pandemic, which sharply curtailed the performance of oil companies. Even through that period (and other rough times over the past few decades), the company managed to keep its streak alive. That says something about the nimbleness of its management, and the strength of its fundamentals.
There's a caveat to this, however. Particularly during the pandemic, ExxonMobil took on piles of debt to keep itself running. So while the borrowing has come down recently from its coronavirus peak, it's still relatively high these days (over $47 billion at the end of 2021, against less than $31 billion two years earlier).
While that figure is certainly worth keeping an eye on, ExxonMobil's finances will benefit greatly from a sustained oil price rise. Even if we retreat from the recent spikes, the company still stands to gain from a post-coronavirus recovery (assuming that we effectively escape the pandemic). And even if that peters out, this determined shareholder remunerator is sure to keep its dividend raise streak going. All that makes ExxonMobil worth considering for any dividend stock fan.
The company's latest distribution was handed out on March 10. It hasn't yet declared its next one.
2. Pfizer
Although Pfizer is one of the most powerful and influential pharmaceutical companies on the scene, it only really became a semi-household name during the coronavirus pandemic. Even now, millions of people associate the company with coronavirus vaccines thanks to Comirnaty, the widely used jab it developed in partnership with German biotech BioNTech.
But the company's 3.2% dividend yield -- relatively high for its sector -- isn't only due to the sky-high sales of Comirnaty in the recent past. The company has a very strong presence in its market, with several blockbuster drugs that continue to do brisk business (breast cancer treatment Ibrance, for example, and blood-thinning medication Eliquis).
The combination of ultra-popular vaccine and strong drug portfolio is doing wonders for Pfizer's fundamentals. The company's $81 billion-plus revenue in 2021 was nearly double that of 2020, while headline net income more than tripled. Yes, much of this is due to Comirnaty, but the company has numerous other engines of growth -- like those vastly popular blockbusters -- that are motoring along rather nicely, thank you very much.
Also doubling, and then some, was free cash flow, which at the end of last year stood at nearly $30 billion, far more than enough to pay the $8.7 billion worth of dividends the company doled out. With that kind of treasure chest and the company's meaty profits and solid management, we can expect those dividend payments to continue for a very long time to come.
A habitual increaser, Pfizer declared its latest dividend raise last December. The new quarterly payout was dispensed in early March; the company has yet to declare its next one.
3. AT&T
Thanks to strong cash flow and frequent dividend raises over the years, telecom and entertainment giant AT&T's yield is touching the stratosphere at almost 9%. But there is a very large asterisk next to that outsized figure.
You see, the company is spinning off the entertainment arm of its business (which includes such hefty properties as HBO and Warner Bros. Entertainment) into a new company, to be combined with Discovery, called WarnerMedia.
After the spinoff, AT&T will revert to being a big telecom play, with a dividend that's almost certain to be considerably smaller. While investors might shed a tear for that almost-double digit-yielding dividend, they should look at the many advantages the spinoff promises to bring.
Firstly, they'll get shares in WarnerMedia, which will begin its independent life as a strong presence in many forms of entertainment. Secondly, by holding on to AT&T 2.0 they'll own a more focused company nicely positioned to take advantage of the 5G technology that promises to make smart devices that much "stickier," and premium wireless services significantly more attractive. The telecom end of the company has done well of late, with notable growth in subscribers and equipment sales.
The soon-to-be-separated AT&T is quite a bargain, too, trading at a price/sales ratio of barely over 1, and a forward P/E well shy of 8.
AT&T has stated that it "expects" to pay a onetime, post-close annual dividend of $1.11 per share in the coming months, which on its own would yield 4.8% at the most recent closing share price. Thereafter it aims to pay out more than $8 billion in annual dividends.
The dividend policy of WarnerMedia has still not been divulged.
