Are you in the market for some dividend-paying stocks for your portfolio? If not, you might want to reconsider. It's true that growth stocks can seem more exciting, but they're often more volatile, too. And some can be significantly overvalued, just as likely to pull back for a breather as to keep advancing.
This is much less the case with dividend payers. After all, a company will typically grow to a point where it has fairly reliable income before management will commit to paying a regular dividend. After all, no company wants to have to reduce or eliminate a dividend when times get tough, as that's a big red flag for investors.
Here, then, are three compelling dividend stocks to consider for your long-term portfolio.
Image source: Getty Images.
1. Pfizer
Let's begin with pharmaceutical giant Pfizer (PFE 1.28%), which recently sported a hefty dividend yield of 6.7%. The company has struggled in recent years, as its COVID-19 vaccine and COVID-19 treatment Paxlovid -- both once big growth drivers -- are now far less in demand. On top of that, some of the company's drugs are facing the end of their patent protections. All that has worried investors and sent share prices south, which ended up boosting its dividend yield.
NYSE: PFE
Key Data Points
There's good news, though, as Pfizer has been busy beefing up its prospects. For one thing, it has struck a licensing deal with the Chinese company YaoPharma -- which has a GLP-1 drug in early stages of development. Pfizer has also been investing in oncology, which could result in some big sellers.
The company is working to turn its fortunes around, but it might not happen in 2026. Management has also recently stated that its strategy includes maintaining and growing its dividend over time. While it works to recover, investors buying now can enjoy a generous stream of dividend income. The stock looks attractively valued at recent levels, with a recent forward-looking price-to-earnings (P/E) ratio of 8.7, below its five-year average of 9.7.
2. Western Union
Western Union (WU +0.05%), meanwhile, has an even heftier dividend yield, recently at 10.14%. And when you add in the value delivered to shareholders through stock buybacks, its total shareholder yield was recently 17%.
NYSE: WU
Key Data Points
The company's history goes all the way back to 1851, before the Civil War, and it has had to transform its business multiple times over its life. Therefore, it might not be surprising that it's looking at cryptocurrency and planning a stablecoin and digital money transfer network to help it keep up with the changing times.
In the meantime, the company is chugging along. Its third quarter featured flat overall revenue, but operating margins improved to 20%, and its consumer services division posting 49% year-over-year growth. The stock seems attractively valued, with a recent forward P/E ratio of 5.3, well below the five-year average of 7.3.
The stock is not exactly a buy-it-and-forget-it proposition, as the fintech (financial technology) world is fast-changing, but those buying into it now can enjoy significant dividend income while keeping an eye on the company's developments.
3. Schwab U.S. Dividend Equity ETF
My third suggestion isn't exactly a stock. It's an exchange-traded fund (ETF) -- a fund that trades like a stock. Specifically, it's the Schwab U.S. Dividend Equity ETF (SCHD 0.16%), with a recent dividend yield of 3.8% and a 10-year average annual gain of 2.9%.
NYSEMKT: SCHD
Key Data Points
Buying into it will quickly have you invested in 100 companies with at least 10 years of dividend increases. Top holdings recently included Lockheed Martin, Bristol-Myers Squibb, and Chevron. The ETF is well worth considering, as it offers a nice mix of both dividend income and stock-price appreciation.
So consider these dividend payers and take a closer look at any that intrigue you. Remember, too, that there are other promising dividend stocks and dividend-focused ETFs to consider.
