When investing in dividend stocks, the primary goal isn't necessarily to make a boatload of money right away. Rather, most of us invest in dividend stocks for a stable, growing income stream that will build wealth over time. Still, dividend stocks do experience some big moves from time to time. In fact, here are 10 dividend stocks that produced total returns of 45% or more in 2015.
Why did these stocks do so well?
There are several reasons why dividend stocks can deliver such incredible performance.
For example, Piedmont Natural Gas (PNY) didn't have a particularly great year, in business terms. In fact, utility providers rarely have big swings in profitability, which is one of the reasons investors looking for consistency gravitate toward this type of stock. However, Duke Energy (DUK 0.28%) announced plans to acquire the energy provider by the end of 2016 at a nice premium, which is the main reason shareholders achieved a 48.7% total return for the year -- the sixth highest in the group.
On the other hand, Reynolds American's (RAI) 48.2% return was due to the company having an excellent year. Thanks to the Lorillard acquisition, revenue jumped and EPS climbed by 17% year over year. Plus, the company's brands gained U.S. market share -- a positive sign for the future.
The list
For the purposes of determining the best-performing dividend stocks of 2015, I used the following criteria.
- Market capitalization of $1 billion or more
- Dividend yield between 2% and 12%
- Listed on either the NYSE or NASDAQ
In other words, I eliminated small companies and those that pay extremely small or large dividends. After all, if a stock pays less than 2% it probably won't appeal to many income-seekers, and if a stock pays more than 12%, it generally means that the dividend isn't sustainable or the company itself is in trouble.
With that in mind, here are the 10 best performing dividend stocks of 2015:
