Ken Fisher manages Fisher Asset Management, a multibillion-dollar fund. Savvy investors like Fisher know that dividends are a great way to obtain healthy doses of income, which are critically important and tough to find in today's low-interest-rate environment. Here are a few of his favorite dividend-paying stocks, each shelling out a 3%-plus yield.
HSBC Holdings (NYSE:HSBC)
Fisher's top dividend-paying stock, HSBC Holdings, currently rewards shareholders with a 3.6% dividend yield. The company leverages its well-known brand in operations spanning more than 80 countries. Its global network enables the U.K.-based company to attract clients with cross-border banking needs. Many of HSBC's operations are in emerging markets, which offers the company growth potential as the trend toward globalization of the financial markets continues. Unlike many of its banking peers, HSBC has paid a solid dividend over the past few years.
Microsoft is currently in a transitional period, undergoing a major reorganization and having recently announced that CEO Steve Ballmer will retire within the coming year. The results of Ballmer's nearly 14-year tenure as CEO have been disappointing. Shares have vastly underperformed the technology sector and the overall stock market under his direction. Yet a change of leadership and corporate overhaul could unlock value at Microsoft. And the tech heavyweight's new offerings in key areas like mobile and gaming, as well as its solid positioning in cloud computing, also hold promise of new growth. Microsoft currently pays shareholders a 3.2% yield.
Following its acquisition binge over the past few years, Pfizer has ballooned into a huge organization. The drugmaker benefited from many of its acquisitions, but several came with divisions unrelated to Pfizer's core pharmaceutical business. As a result, CEO Ian Read has refocused Pfizer's strategy on its main business by selling or spinning off several non-pharmaceutical divisions such as Nutrition and Animal Health. This strategy will allow Pfizer's robust drug pipeline to have a bigger impact on company growth and profitability. The drugmaker pays shareholders a 3.1% dividend yield.
These days investors salivate over 3%-plus dividend-yielding stocks. Yet HSBC and Pfizer have actually shrunk their respective dividends during the past five years. This proves investors need to do their homework before buying high-paying dividend stocks. After all, companies that pay attractive dividends aren't necessarily growing those yields as well.
Fool contributor Nicole Seghetti owns shares of Microsoft and Pfizer. You can follow her on Twitter @NicoleSeghetti. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.