Savvy investors know not to overlook the power of dividends. And Warren Buffett, arguably the savviest investor of all, appreciates dividends, too. (Ironically, though, his company, Berkshire Hathaway, doesn't yet pay one!) As of early this year, Berkshire Hathaway's investments in a handful of dividend-paying stocks were set to deliver some $4.5 billion in dividend income.
Here's a look at some promising dividend payers you might want to consider for your long-term stock portfolio. Some I already own, and the others I'm interested in buying at the moment, though things can change, of course. Whether you have $1,000 or $100,000 to invest, you might check some of these companies out.
Image source: Getty Images.
1. Pfizer
Pfizer (PFE 1.10%) is a dividend powerhouse, with a recent dividend yield of 7.1%. That payout has been growing, too, with the recent total annual dividend of $1.70 up from $1.52 in 2020 and $1.20 in 2016. The stock has been a poor performer in recent years, though, averaging annual gains of 1.84% over the past decade and an average annual loss of 17.71% over the past three years. Its future looks promising, though, as it has a big pipeline of drugs in development. And most or all of the pessimism surrounding it has already been factored into its low stock price. Its forward-looking price-to-earnings (P/E) ratio was recently 8.3, well below its five-year average of 10.2.
NYSE: PFE
Key Data Points
2. Caterpillar
Caterpillar (CAT +0.46%), a top maker of construction and mining equipment, sports a recent dividend yield of 1.56%. That might not sound exciting, but it's well above the S&P 500's recent dividend yield of around 1.25%. The company has been a solid long-term performer, too, with average annual gains of 17.6% over the past decade. And its dividend has been growing, with its recent total annual payout of $5.64 up from $4.28 in 2021 and $3.28 in 2018.
NYSE: CAT
Key Data Points
3. United Parcel Service
United Parcel Service (UPS +0.06%) recently sported a hefty dividend yield of 6.5% -- and it's been growing, too, albeit not rapidly in the last year or two. Still, the total recent payout of $6.54 is up from $3.64 in 2018. The stock hasn't been growing rapidly lately, either, with an average annual gain of 4.24% over the past decade.
Still, for those seeking income, the stock is paying generously while also growing in value. The continued growth of e-commerce bodes well for UPS, though our current uncertain economic environment isn't helping -- and Amazon is reducing the portion of its packages it sends via UPS.
NYSE: UPS
Key Data Points
4. Chevron
Chevron (CVX 0.95%), with a recent dividend yield of 4.78%, is looking good, too. Its dividend has been growing, up from a total annual payout of $4.76 in 2019 to $6.68 recently. Its stock's growth has been impressive over the past five years, averaging 14.2% annually, but that average is just 7.1% over the past decade. Still, bulls like the stock in part for its significant share buybacks, which deliver value for shareholders, and also for how it's diversified and built to last, involved in producing energy, pipeline operations, chemicals, and refining, among other things.
Consider some dividend-focused ETFs, too
These dividend-paying stocks are well worth considering, but you might want to consider investing in some dividend-focused exchange-traded funds (ETFs), too. ETFs are funds that trade like stocks, and many are index funds, too, some focused on generating income for their shareholders. Here are a few you might look into further:
|
ETF |
Recent Yield |
5-Year Avg. Annual Return |
10-Year Avg. Annual Return |
|---|---|---|---|
|
iShares Preferred & Income Securities ETF (PFF 0.16%) |
6.68% |
3.22% |
3.21% |
|
Schwab U.S. Dividend Equity ETF (SCHD 1.23%) |
3.97% |
13.34% |
10.92% |
|
Fidelity High Dividend ETF (FDVV 0.26%) |
3.02% |
17.91% |
N/A |
|
Vanguard High Dividend Yield ETF (VYM 0.40%) |
2.86% |
14.60% |
10.08% |
Data source: Yahoo! Finance and Morningstar.com, as of June 24, 2025.
However you do it, having some healthy and growing dividend-payers in your portfolio is likely to pay off.
