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The 3 Top Dividend Stocks of 2014

By Selena Maranjian - Dec 14, 2013 at 8:39AM

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For these top dividend stocks, 2014 looks to be a very good year. Check out what our analyst has to say about General Electric, Apple, and Corning.

If you're seeking the top dividend stocks 2014 has to offer, good for you! It's hard to go wrong with a dividend-focused investment strategy, as dividend-paying stocks tend to outperform their less generous counterparts.

When it comes to finding top dividend stocks, 2014 is a great time to start, or continue, investing in dividend payers. Here are three compelling companies that popped out when I screened for significant, and growing, dividends coming from companies with positive earnings and price-to-earnings ratios of about 20 or less:

General Electric (GE -0.20%) recently yielded 2.8%. It slashed its payout by two-thirds in 2009, but it has been rebuilding it since then. The dividend was raised by nearly 12% last year and another increase is expected soon. General Electric may seem like a company too large to grow quickly, but its stock has averaged 9% growth annually over the past 20 years, and nearly 13% over the past five. The conglomerate has been transforming itself into a "leaner, meaner, and more profitable" company. General Electric's third quarter report revealed growing margins and a big backlog of orders. Its pile of cash and equivalents topping $125 billion gives it a lot of power and flexibility, adding to its attractiveness. For this contender among top dividend stocks, 2014 is looking promising.

Apple (AAPL 1.62%) recently yielded 2.3%, and its payout has a lot of growth potential, with the company generating more than $40 billion in free cash flow annually. (Billions of that are being spent on share buybacks, which also reward shareholders as long as the purchased stock is undervalued.) Apple's days of heady growth may be behind it, but then again it does have a history of introducing entirely new product categories -- and then dominating them. Meanwhile, Apple remains the leader in high-end smartphones and tablets, and it was one of the biggest winners over Thanksgiving weekend. Bulls are particularly excited about its recent deal to offer iPhones on China Mobile's network (which sports more than 750 million subscribers!). For those seeking top dividend stocks, 2014 is likely to offer another payout increase from Apple.

Corning (GLW 1.27%) has doubled its dividend in less than three years, and it recently yielded 2.3%. The company's stock surged 25% in October to a two-year high on news of a major deal with Samsung, with many still seeing a lot more upside in the stock. Its Gorilla Glass has been a great contributor to the company, installed in more than a billion mobile devices, and its flexible Willow glass holds a lot of potential in a range of applications from smartphones to solar energy. Corning has been buying back billions of dollars' worth of shares, too. For those interested in top dividend stocks, 2014 looks quite promising for Corning.

The top dividend stocks 2014 has to offer are poised to deliver stock price appreciation as well as dividend income. It's a combination that's hard to beat.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$138.93 (1.62%) $2.21
General Electric Company Stock Quote
General Electric Company
$63.54 (-0.20%) $0.13
Corning Incorporated Stock Quote
Corning Incorporated
$31.91 (1.27%) $0.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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