Dividends can be a great way to increase income in your investment portfolio, something many people seek during times of high inflation and amid talk of a possible recession. Dividend stocks or dividend funds can help you earn regular passive income from some of the strongest companies in the economy.
Here are 10 dividend stocks to consider for your portfolio and how to invest in them.
How to invest in stocks and dividend funds
When looking for ways to receive regular dividend payments, you generally have two options: stocks that pay dividends and funds that hold stocks that pay dividends. Here’s how each works.
Investing in a dividend-paying stock is no different from investing in any other stock. You will need a brokerage account, which can easily be set up through an online broker, in order to complete a trade. Once your account is created and funded, you can choose which dividend-paying stocks to invest in. Your broker may even be able to help you identify stocks with big gains through their research offering.
If you’re not sure which dividend stocks to choose, a dividend fund may be a better option for you. Dividend-oriented mutual funds and exchange-traded funds (ETFs) hold a basket of stocks that pay dividends. Some of these funds focus on stocks with high dividend yields, while others look for companies that have consistently paid and increased their dividends over time.
By choosing a fund, you won’t have to worry about tracking individual stocks in the portfolio closely, as the fund’s diversification should protect you from too much exposure to a single stock.
High Dividend Stocks
All dividend and yield information is as of August 10, 2022.
1. JPMorgan Chase (JPM)
JPMorgan is one of the largest banks in the United States and is led by highly respected CEO Jamie Dimon. The bank weathered the 2008 financial crisis better than most, and its stock has appreciated more than 5 times since then, while paying a large dividend to shareholders.
Dividend yield: 3.5%
Annual dividend: $4.00 per share
2. Exxon Mobil (XOM)
Exxon Mobil is the largest oil and gas company in the United States and its roots go back to John D. Rockefeller’s Standard Oil empire. In 2022, Exxon set a goal to reduce or offset greenhouse gas emissions from its operations to zero by 2050 in response to pressure from investors and the public regarding the company’s role in climate change.
Dividend yield: 3.9%
Annual dividend: $3.52 per share
3.United Parcel Service (UPS)
UPS is known for its brown trucks that deliver millions of packages every day. The delivery giant operates in more than 220 countries and has always shared its profits with its shareholders.
Dividend yield: 3.1 percent
Annual dividend: $6.08 per share
4. Verizon Communications (VZ)
Verizon is a leader in communications and technology services. Along with AT&T and T-Mobile, they provide the majority of mobile phone services in the United States. Verizon generated more than $130 billion in revenue in 2021.
Dividend yield: 5.8 percent
Annual dividend: $2.56 per share
AT&T is another telecommunications leader that generates strong cash flow for shareholders. Recently, the company divested some assets and cut its dividend by almost half by focusing on 5G investments and paying off its heavy debt.
Dividend yield: 6.1%
Annual dividend: $1.11 per share
6. Pfizer (PFE)
Pfizer is a pharmaceutical giant that researches and develops drugs for the treatment of various diseases and conditions. The company generated more than $80 billion in revenue in 2021 and paid more than $8.7 billion in cash dividends to shareholders.
Dividend yield: 3.2%
Annual dividend: $1.60 per share
Intel is one of the world’s leading semiconductor companies and its chips help power much of the technology we use every day. The company plans to invest billions of dollars in new capabilities as it tries to keep pace with rival chipmakers. Intel returned approximately 90% of its free cash flow to shareholders from 2015 to 2019.
Dividend yield: 4.1%
Annual dividend: $1.46 per share
8. Philip Morris International (PM)
Philip Morris sells cigarettes and smokeless products in over 180 countries outside of the United States. Although the company still generates significant profits from the sale of tobacco-related products, it is moving towards a greater focus on smoke-free products which, although not without risk. , pose fewer health risks than cigarettes.
Dividend yield: 5.1%
Annual dividend: $5.00 per share
9. Herringbone (CVX)
Chevron is a leading energy company that has outlined a plan it says will deliver high returns for shareholders from its advantages in traditional energies such as oil and gas, and enable it to lead a low-energy future. carbon emission. The company boasts of its strong balance sheet and history of returning money to shareholders.
Dividend yield: 3.7%
Annual dividend: $5.68 per share
10. Cisco Systems (CSCO)
Cisco provides a variety of networking, security, and cloud solutions and generated nearly $50 billion in revenue in 2021. The company is highly profitable and generated more than $15 billion in cash flow from business. operation each of the last three years. Nearly a third of its cash flow was used for dividends in 2021.
Dividend yield: 3.4%
Annual dividend: $1.52 per share
At the end of the line
Stocks or dividend funds can be a great way to earn extra income. Remember that if you hold these securities in a taxable brokerage account, you will have to pay taxes on the income you receive, even if you reinvest these dividends. If you want to avoid taxes, you will need to hold the shares in a tax-efficient account such as an IRA or 401(k).
Be sure to research dividend-paying stocks before investing. Some companies with high payments today may be forced to reduce payments if their business suffers.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. Further, investors are advised that past performance of investment products does not guarantee future price appreciation.