It's smart to load up your portfolio with dividend-paying stocks because they can deliver powerful growth. In case you're underestimating the power of dividends, check out the numbers below, from a Hartford Funds report:
|
Dividend-Paying Status |
Average Annual Total Return, 1973-2023 |
|---|---|
|
Dividend growers and initiators |
10.19% |
|
Dividend payers |
9.17% |
|
No change in dividend policy |
6.74% |
|
Dividend non-payers |
4.27% |
|
Dividend shrinkers and eliminators |
(0.63%) |
|
Equal-weighted S&P 500 index |
7.72% |
Data source: Ned Davis Research and Hartford Funds.
NYSE: CVX
Key Data Points
Got it? Good. Now: Which dividend-paying stocks might you invest in? Well, perhaps consider Chevron (CVX 0.63%). Here are some things to know about it:
- Its dividend yield was recently 4.23%.
- Its payout has been increased at an annual average rate of 6.5%. Its annual dividend per share was recently $6.52, and that's up from $5.16 in 2020 and $4.32 in 2017. Rising dividends mean you'll be receiving more and more cash from Chevron each year -- and likely keeping up with inflation.
- It has upped its payout for 37 years in a row, boding well for future increases.
- Its payout ratio, the percentage of earnings it pays out in dividends, was recently around 62%, which is a solid result suggesting that the dividend is sustainable, with room to grow.
- Its stock appears attractively priced, with a recent forward-looking price-to-earnings ratio (P/E) of 12.3, below the five-year average of 14.
- The stock has averaged annual gains of 9.2% over the past five years, 6.1% over the past 10 years, and 7.2% over the past 15 years. So you can expect the stock to deliver price appreciation over time for you, too.
If you're bullish on the energy industry and are seeking income, you might consider investing in Chevron because it's a well-managed diversified energy company, producing oil and gas, transporting energy products, and processing them.
Management has been investing in renewable fuels and technologies as well. It's producing good results without taking on too much debt, too -- with a relatively low debt-to-equity ratio, around 14.6%, for an energy company.
