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10 Dividend Stocks With a Proven Track Record of Success

Author: Jeremy Bowman | July 17, 2021

Stacks of coins next to a burlap bag with dollar sign.

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Many happy returns

Like an old pair of blue jeans, some things never go out of style, and in investing, that applies to dividend stocks. While growth stocks have gotten much of the fanfare over the past year, when it comes to long-term growth, dividends have historically outperformed non-dividend payers.

That’s great news for income investors, but not all dividend stocks are created equal. If you’re looking for dividend stocks you can count on for long-term success, take a look at the 10 on this list.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

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Cigarettes on top of loose tobacco.

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1. Altria

Investing in tobacco stocks might be controversial, but there’s no room for debate when it comes to Altria's (NYSE: MO) performance. The Marlboro parent has returned more than 3,000,000% with dividends reinvested over the last 50 years, meaning that $1,000 invested into the stock back then would be worth more than $30 million today.

That shows the power of reinvesting your dividends, and it also shows why it pays to own reliable, high-yield stocks.

Currently, the domestic tobacco company offers a yield of 7.3% and is a Dividend King, having raised its dividend for 51 years straight.

While the company faces challenges with the decline in tobacco consumption, and the collapse of Juul, in which it took a 35% stake, it continues to be a profit machine, and should have little difficulty raising its dividend in the coming years.

ALSO READ: 3 Top Dividend Stocks to Buy in July

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Target city storefront.

Source: Target

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2. Target

Target (NYSE: TGT) may not fit the profile of the typical dividend stock, but the big-box chain is actually a Dividend Aristocrat, too.

Today, Target pays a dividend yield of 1.5% and has emerged from the pandemic as a top retailer thanks to its focus on e-commerce and using its stores to fulfill orders. The company has delivered soaring growth on the top and bottom lines during the pandemic.

Over the last three years, Target has more than tripled, and with the momentum it’s generating coming out of the pandemic with a focus on owned brands, small-format stores, and a broad product selection, the company looks well positioned to deliver further dividend hikes for investors.

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3. Procter & Gamble

Procter & Gamble (NYSE: PG) has all the makings of a classic dividend stock. The household products and personal care giant is nearly 200 years old and well diversified with more than 20 billion-dollar brands.

With that kind of history, it shouldn’t come as a big surprise that Procter & Gamble is a Dividend King, having raised its dividend for 64 years in a row.

As a consumer staples stock, Procter & Gamble is recession-proof as consumers buy products like razors and paper towels no matter what the status of the economy is. That makes the company one of the most reliable dividend stocks, and its history of growing both organically and through acquisitions should give investors confidence that it can continue to raise its payouts.

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A Starbucks barista in green apron standing inside a store.

Source: Starbucks

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4. Starbucks

Starbucks (NASDAQ: SBUX) has only been paying dividends since 2010, but the java giant has already established itself as a top stock for income investors based on its commitment to dividend growth.

The company has raised its dividend by at least 10% every quarter and now offers a dividend yield of 1.6%.

Though Starbucks is the world’s second-most valuable restaurant chain in the world behind McDonald's, it still has significant growth opportunities in areas like China and in digital and delivery. As the dominant brand in coffee, Starbucks should continue to deliver increasing dividends for investors.

ALSO READ: 3 High-Yield Dividend Stocks to Buy Now

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A worker fills a refrigerator with Pepsi products.

Source: PepsiCo

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5. PepsiCo

Like Procter & Gamble, PepsiCo (NASDAQ: PEP) has long been a favorite among dividend stocks, and its recession-proof suite of food and beverage brands makes it a reliable income stock in good times and bad.

In addition to its namesake soda brand, PepsiCo owns Frito-Lay, Quaker, Gatorade, Tropicana, and a host of other food and beverage brands domestically and abroad. That diversification has helped it resist the decline in soda consumption in much of the world and deliver steady growth.

Today, the Dividend Aristocrat pays a rock-solid yield of 2.9%.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

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6. Johnson & Johnson

Johnson & Johnson (NYSE: JNJ) is so reliable that it is one of only two American companies to have a AAA credit rating. (Microsoft is the other one.)

The healthcare conglomerate is diversified across medical devices, pharmaceuticals, and consumer products like Tylenol, giving it an unusual degree of stability in an industry where companies tend to focus on one thing like drugs or insurance.

Johnson & Johnson has long been a favorite of blue chip investors, and it’s easy to see why. It’s an age-old company with a recession-proof business model and a well-known brand.

It’s also a Dividend Aristocrat and currently pays a yield of 2.5%.

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7. Verizon

Mobile devices are as much of a necessity in the modern world as anything, which means that Verizon (NYSE: VZ) isn't going anywhere.

The nation's No. 1 carrier has consistently bested rival AT&T, which has squandered billions in misguided acquisitions, and Verizon brings in enviable profit margins, thanks to its leading position in a triopoly.

The company currently pays a dividend yield of 4.4%, making it one of the highest-yielding stocks in the Dow Jones Industrial Average.

ALSO READ: Buy This Stock Before It Becomes a Dividend Aristocrat

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A CVS associate talks to a child near the pharmacy seating area.

Source: CVS Health

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8. CVS Health

Part pharmacy chain and part health insurer thanks to its acquisition of Aetna a few years ago, CVS Health (NYSE: CVS) is another solid choice as both a value stock and income stock. The company is the biggest pharmacy chain in the U.S. and is expanding further into wellness with the expansion of its Minute Clinics, which function as a pared-down version of urgent care.

Its national footprint of more than 10,000 stores also gives it an edge in proximity to the customer in an era of instant delivery through partners like DoorDash.

CVS currently offers a dividend yield of 2.4%. However, the company hasn't raised its dividend in several years as it’s worked to integrate Aetna and is focused on its growth strategy.

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Child using a Microsoft Surface.

Source: Microsoft

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9. Microsoft

As the other AAA credit holder, Microsoft (NASDAQ: MSFT) also deserves a place on the list. The tech giant has dominated enterprise software for a generation and today has strong positions in everything from that to cloud computing to gaming consoles and even social media, through its acquisition of LinkedIn.

Though tech companies aren’t known for paying dividends, Microsoft has straddled the line between growth and income well. While its dividend yield may be paltry at 0.8%, the tech titan does have a solid track record of dividend growth, as well as a bright future with huge profit margins.

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10. Sherwin-Williams

Sherwin-Williams (NYSE: SHW) has quietly destroyed the market throughout its history, as the paint company has built a strong business model through a nationwide store footprint and because its product is a fixture in home improvement.

Shares have doubled over the last three years and are up nearly 1,000% over the last decade, helped by the home-improvement boom during the pandemic, which was also a boon for the company.

As a result of the stock's recent gains, the dividend yield has fallen to 0.8%, but Sherwin-Williams is a Dividend Aristocrat and should continue to benefit from the housing boom as it will spur demand for home-improvement products.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Previous

Next

A digital light bulb on a dark blue screen.

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Take your pick

Even within dividend stocks, there's plenty of room for diversification. You can choose from sectors like healthcare, tech, energy, industrials, consumer goods, and more, and you can mix it up between slow-growth Dividend Aristocrats and higher-growth stocks that have only just begun to pay dividends.

The list here is just a start but consider examining this list of Dividend Aristocrats and getting to know other income stocks with promising growth prospects.

The best thing about dividend stocks is that the ones above are generally the type you can set and forget. If you want to make investing easy, pick some stock like the ones on the list, set up a dividend reinvestment plan and let compound interest work for you.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Jeremy Bowman owns shares of CVS Health, Starbucks, and Target. The Motley Fool owns shares of and recommends Microsoft and Starbucks. The Motley Fool recommends CVS Health, Johnson & Johnson, Sherwin-Williams, and Verizon Communications and recommends the following options: short July 2021 $120 calls on Starbucks. The Motley Fool has a disclosure policy.

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