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15 Stocks Paying You to Own Them

Author: Selena Maranjian | February 28, 2021

Pair of hands paying cash to an outstretched hand

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It's hard to beat dividends

The idea of dividend-paying stocks may not excite you, but it should. Sure, you can buy into a very promising company and watch the value of your shares rise over many years. But sometimes those stocks can stall for a year or two, or they can slump for a while. If they're healthy dividend payers, though, they will keep rewarding shareholders with regular dividend payments through fat times and lean times.

Consider this, from The Wall Street Journal: "Measured from 1928 through 2019, a basket of dividend payers in [the second quintile] saw a $1 investment turn into $25,395, according to Dartmouth College professor Kenneth French. A basket of nonpayers would have been worth just $2,139."

That's reflecting a universe of stocks divided into quintiles, with the first quintile encompassing the fifth of stocks sporting the highest dividend yields, the second quintile encompassing the fifth with the next-highest yields, and so on. In other words, it's suggesting that it's best to pass up the highest yields and look for ones that are simply high.

Here's a look at 15 dividend-paying stocks you might want to consider for your long-term portfolio.

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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An apple iphone.

Source: Apple

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1. Apple

You may not think of Apple (NASDAQ: AAPL) as a dividend-paying stock, but it is, having initiated its payout in 2012. (It paid a dividend for some years previous to that as well.) Its stock recently yielded 0.62%, which is rather paltry, but remember that a dividend's growth rate is very important. A small dividend can become large, surpassing a large one that doesn't grow briskly. Apple's payout has been growing by an annual average rate of 10% over the past decade. If Apple's business grows as successfully as many expect, it can deliver a nice one-two punch with stock-price appreciation and dividend growth.

ALSO READ: How to Claim Over $80,000 in Tax-Free Income by Investing in Dividend Stocks

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Mutual funds performance report in newspaper

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2. T. Rowe Price

T. Rowe Price (NASDAQ: TROW) is a respected financial services company, and one that has been growing at a good clip over the years. Its net revenue for 2020 advanced 10% over 2019, while diluted earnings per share (EPS) grew nearly 19% and assets under management jumped almost 22%. It's financially strong and offers a dividend that recently yielded 2.65% and that has been increased at an annual average rate of 12%.

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Starbucks Unicorn Frappuccino in a Starbucks cup

Source: Starbucks

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3. Starbucks

Starbucks (NASDAQ: SBUX) is another solid dividend payer, with a dividend that recently yielded 1.7%, and it's been hiking that payout by an annual average of 18% over the past five years. With a market capitalization recently topping $122 billion, Starbucks is a big enterprise -- and it's aiming to get much bigger. It boasts close to 33,000 locations, and management is looking to up that to around 55,000 by 2030. It's betting big on Asia, too, with about 600 of 1,100 net new locations planned for 2021 being in China -- 55%.

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AT&T logo

Source: AT&T

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4. AT&T

Good old AT&T (NYSE: T) has been around a long time and has long been known as a solid dividend payer. The stock has fallen by nearly a quarter from its 52-week high, due in part to a shrinking landline business, loss of DIRECTV subscribers, and disappointing results from its movie and streaming businesses. It also has pushed its dividend yield up -- to a whopping 7.2% recently. The company is carrying a lot of debt but has been refinancing it. AT&T expects to generate about $2.6 billion in free cash flow this year, which not only can support its dividend but also can be applied to debt reduction and other financial goals. Investors aren't unanimous in their expectations for AT&T's future, but patient believers can enjoy a hefty payout while waiting.

ALSO READ: Like Dividends? I Bet You'll Love These 3 Stocks

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The outside of a U.S. Bancorp branch

Source: U.S. Bancorp

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5. U.S. Bancorp

U.S. Bancorp (NYSE: USB) is a respected and well-run bank, but that hasn't kept it from suffering along with other banks in our pandemic-depressed economy, as many businesses and consumers have slowed their borrowing and spending. That's a temporary problem, though, and with more and more people getting vaccinated, our economy should start heating up, boosting the bank's business. U.S. Bancorp recently yielded a solid 3.45%, and it has been increasing that payout by an annual average of 10% over the past five years.

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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A solar farm and windmills on a sunny, blue sky day

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6. NextEra Energy

If you'd like to own an energy company that's very involved in renewable power, consider NextEra Energy (NYSE: NEE), which recently yielded 1.9% and which has been upping its payout by an annual average of 12% over the past five years. Based in Florida, NextEra owns Florida Power & Light, one of the largest rate-regulated utilities in the U.S., along with NextEra Energy Resources, which (with its affiliated businesses) is the biggest wind and solar energy generator in the world. It has long-term contracts for most of its assets and big growth plans as well.

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A McDonald's restaurant from the outside

Source: McDonald's

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7. McDonald's

McDonald's (NYSE: MCD) needs little introduction, except perhaps to note that it's a long-term dividend payer, recently sporting a yield of 2.4% and having increased that payout by an annual average rate of 8% over the past five years. The company was whacked along with many others by the pandemic that kept many people at home, but its future is looking brighter now. It was more able than many other chains to rely on drive-thru service as that has long been a big part of its offerings -- and it added delivery options as well. One potential growth driver is a suite of chicken sandwiches that it's introducing.

ALSO READ: These 3 Dividend Stocks Are Too Cheap to Ignore

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Illustration of telecommunications towers transmitting signals

Source: Getty Images

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8. American Tower

American Tower (NYSE: AMT) is a real estate investment trust (REIT) -- a company that enjoys tax breaks in exchange for paying out at least 90% of its earnings as dividends to shareholders. Its payout recently yielded 2.15%, and it has been upping it by an annual average of 20% over the past five years. REITs own real estate properties -- often of a certain kind, such as medical buildings, shopping centers, or apartments -- and collect rents. American Tower's focus is on towers for wireless communication and broadcasting. The cell tower specialist is one of the biggest REITs around, with a market value topping $100 billion, and it's still growing.

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IBM logo

Source: IBM

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9. IBM

International Business Machines (NYSE: IBM) has been struggling in the last decade to reinvent itself, shedding its focus on hardware, for example, while boosting investments in artificial intelligence and cloud computing. Those efforts seem promising, but they have been slow going, and disappointing short-term results have pushed the stock down -- which increases its dividend yield. Indeed, IBM stock recently yielded a fat 5.4%

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Chevron logo

Source: Chevron

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10. Chevron

Chevron (NYSE: CVX) is another big blue chip that has seen better days and is sporting a high dividend yield (recently 5.5%) due to a depressed stock price. That hefty payout may be one reason why Warren Buffett's company, Berkshire Hathaway, recently took a big stake in it, buying about $4 billion worth of shares -- roughly 2.5% of the company. Chevron is healthy and disciplined, and its future seems promising. Its situation might not turn around quickly, but patient investors will enjoy a robust income stream while they wait.

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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The word Dividends written on a piece of paper sitting next to a roll of cash

Source: Getty Images

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11. 3M

3M (NYSE: MMM), known for Scotch tape and Post-its, is a huge conglomerate involved in abrasives, adhesives, filters, cleansers, and much more. Its dividend recently yielded 3.35%, and it has been increasing that payout by an annual average of 6% over the past five years. It's another business turning itself around, simplifying and streamlining the organization and cutting costs. One reason to be hopeful is the company's history of innovation, which has often led it to new products and new revenue generators.

ALSO READ: 2 Great Dividend Stocks Whose Payouts Could Double

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Verizon logo

Source: Verizon Communications

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12. Verizon Communications

Telecom giant Verizon Communications (NYSE: VZ) is another company in which Warren Buffett's Berkshire Hathaway has recently taken a big stake, buying nearly 150 million shares that were recently worth more than $8 billion. Verizon recently yielded 4.6%. It has been upping its payout by an annual average of only 2% over the past five years, but a 4.6% yield is a great place to start. The company's business is not likely to grow very briskly anytime soon, and it does have a lot of debt to pay off, but it's likely to pay out meaningful income to shareholders very dependably.

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People typing on laptops with cloud computing network

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13. Cisco Systems

Cisco Systems (NASDAQ: CSCO) sports a dividend that recently yielded 3.2%, which has been increased by an annual average of 11% over the past five years. The company has been struggling in recent years to regain its momentum, but many have faith in a rosy future for it, due in part to business picking up once the pandemic is behind us and its security business continuing to be a strong performer.

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Pfizer logo

Source: Pfizer

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14. Pfizer

Pfizer (NYSE: PFE) has a well-received COVID-19 vaccine on the market, but its stock has been mostly falling throughout 2021. Thus, its dividend yield has been propped up, recently to a yield of 4.5%. (That payout has risen by 6% annually, on average, over the past five years.) The drug powerhouse, with a market value recently near $200 billion, has much more than one vaccine going on. Pfizer's lackluster performance over the past few years is due, in part, to disappointing results from some drugs in development, such as one that tackled breast cancer. But it has many drugs in its development pipeline and many revenue-generating products. The COVID-19 vaccine alone is expected to bring in more than $15 billion -- and it may be on the market well beyond 2021.

ALSO READ: 3 Steps to Getting Rich With Dividend Stocks

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Aflac duck holding smartphone to its ear

Source: Aflac

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15. Aflac

Quack, quack -- it's Aflac (NYSE: AFL), an insurance company with a strong presence not only in the U.S. but also in Japan. Indeed, its Aflac Life Insurance Japan covers a quarter of all households. Aflac stock recently yielded 2.85%, and its payout has been increased by an annual average of 10% over the past five years -- with its most recent increase a hefty 18%. The year 2020 was a weird one for most companies, but Aflac managed to keep its revenue relatively even with 2019 levels. Fourth-quarter revenue rose 5.5% year over year, while net income jumped almost 22%. In its end-of-year conference call, management was optimistic, with the CEO noting: "I would characterize our 2020 financial performance as solid despite significant external challenges. As we look forward into 2021, we do not see any fundamental drivers causing us to change the outlook provided at our Financial Analyst Briefing in November. In order to achieve these objectives, we remain laser focused on executing on our growth initiatives, expense efficiency and continue to drive ROE at a significant spread to our cost of capital."

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

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Young woman holding lots of cash and winking

Source: Getty Images

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Add some dividends to your portfolio

Take a closer look at any of these 15 dividend payers that intrigue you, and know that there are plenty more out there as well. Dividends can provide solid income in retirement -- or can just keep filling your brokerage account with cash that you can redeploy into more shares of stock. Consider that a $400,000 portfolio with an overall average yield of just 3% will produce $12,000 annually -- or $1,000 per month.

Selena Maranjian owns shares of Apple, AT&T, Berkshire Hathaway (B shares), IBM, Starbucks, and Verizon Communications. The Motley Fool owns shares of and recommends American Tower, Apple, Berkshire Hathaway (B shares), and Starbucks. The Motley Fool recommends 3M, Aflac, NextEra Energy, and Verizon Communications and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

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