Smart investors often load up their portfolios with plenty of dividend-paying stocks. Why? Well, multiple reasons.
For one thing, even during a market slump, a healthy and growing dividend-paying company will likely keep paying out its dividend. So while the stock price may not grow for a while (and may even fall), shareholders still receive some income. Better still, that payout will probably increase over time, often annually. And over the long run, a healthy and growing company's stock price will increase, too. It's win-win-win.
Here, then, are three dividend payers to consider investing in -- whether you have $1,000 or $100,000 to invest.
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1. Altria
Tobacco titan Altria (MO 0.69%) has long been a solid dividend-paying company. It remains one today -- and it's offering a fat dividend yield, recently 7.8%. It's generally smart to seek out dividends growing at a good clip, and Altria's payout has averaged increases of around 4% over the past five years. That's not the best growth rate, but it is offset by the currently steep yield.
NYSE: MO
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It's fair to worry about Altria's future, as fewer Americans are smoking these days -- hitting an 80-year low earlier this year, per Gallup. But Altria isn't only about cigarettes. It's been investing in cigarette alternatives, too, such as vaping products.
Still, cigarettes remain its main offering for now -- and that decline is worth considering. In the company's third quarter, total revenue was roughly flat year over year.
2. Ford Motor Company
Ford Motor Company (F 1.66%) is another compelling dividend payer, with a recent yield of 5.9%. It's another stock to invest in for the hefty dividend and not for its dividend growth, though. Its recent $0.15-per-share quarterly payout is the same as it was five years ago, though there have been a few bigger and a few smaller payouts in between.
NYSE: F
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You might buy this stock for its rather dependable payout and its successful "Pro" division, selling to businesses. But don't get too excited by its electric vehicle (EV) offerings, as they're struggling mightily in China -- though they've recently been doing well in the U.S. Ford has been issuing more recalls than most automakers, too, which is not what an investor would want to see.
Still, with the stock down over the past few years, it is attractively priced at recent levels, with a forward-looking price-to-earnings (P/E) ratio of 6, below its five-year average of 7.4.
3. PepsiCo
PepsiCo (PEP +0.13%) is also an attractive dividend payer. Many don't appreciate that it's not only a dominant business in the beverage realm, but also in the salty-snack realm, with brands such as Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream.
PepsiCo's dividend recently yielded 3.7%, and has grown at an annualized rate of 7% over the past five years. In fact, PepsiCo has hiked its payout for more than 50 years in a row.
NASDAQ: PEP
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The stock's dividend yield rose in 2024 because the stock fell -- but PepsiCo has a lot going for it. It's made some promising acquisitions in recent years, broadening the range of its offerings to include more Mediterranean and Mexican-American items. Investors seeking income -- and growing income, at that -- would do well to take a closer look at this major American company.
Its third quarter revealed lagging demand, but CEO Ramon Laguarta noted, "Strong cost controls aided our profitability, as we made incremental investments to improve our marketplace competitiveness." PepsiCo's stock valuation looks attractive, too, with its forward P/E of 17 well below the five-year average of 23.
These are just a few of many appealing dividend-paying stocks. Look into any that interest you, and also consider investing -- alternatively or additionally -- in one or more high-performing dividend-focused ETFs.
