Dividend Stocks with 4%+ Yields: There are dozens of ways to unnecessarily lose money in the stock market. One of investors’ most common errors is selling shares because they are fearful.
After all, it’s hard to watch portfolio values fall without taking action, and the impulse is to unload stock that is declining in price before the losses get any bigger.
It takes a lot of discipline to stay the course during volatile economic times, and that’s not always practical – or possible.
The good news is that there is another way to grow portfolios without worrying about roller-coaster stock prices. Companies that consistently pay dividends ensure that investors realize returns regardless of the market’s ups and downs.
It’s true that dividends aren’t guaranteed from one quarter to the next, so choosing stocks with a reputation for reliable profit sharing is essential. That sort of reputation is hard to come by, and most companies with a long history of dividend payments typically make protecting those payments a priority.
The best dividend stocks belong to the elite Dividend Aristocrats, a club that requires 25 consecutive years of dividend increases for admission. While status as a Dividend Aristocrat isn’t the only point to consider when choosing a dividend stock, it’s an excellent place to start.
AT&T, Altria Group, and 3M are three stocks known for dependable dividend payments. Better still, at four percent or more, their dividend yields are significantly higher than the S&P average dividend yield of roughly two percent.
Is Altria Group Stock A Buy?
Altria stock is a popular choice for income investors because shareholders enjoy a dividend yield of 7.89 percent. The company hasn’t achieved Dividend Aristocrat status, but it is well on its way.
Dividends have increased each year since 2008. Before that, the company had decades-long streaks of annual dividend increases, though it never quite hit the 25-year threshold required to become a Dividend Aristocrat let alone the 50 year streak needed to become a Dividend King.
Some investors have chosen to avoid Altria group because its primary business is tobacco – and there is no longer any doubt that tobacco smoke causes significant health issues even when used as directed.
Altria Group was formerly known as the Philip Morris Company, and shares still trade under the original MO ticker symbol. The name change was finalized in 2003, so the company could branch out into other types of business.
It currently holds substantial minority stakes in Cronos Group, a Canadian cannabis company, JUUL, a leading e-cigarette maker, and a variety of other companies in similar industries.
Though tobacco use is declining, Altria Group has no plans to disappoint shareholders. Not only is it prepared for the end of cigarettes – it is leading the change with a goal to “responsibly lead the transition of adult smokers to a smoke-free future” by 2030.
Altria is deeply involved in researching and developing an array of smokeless products that will attract current smokers and support them in moving away from traditional cigarettes. Examples of Altria’s new product lines include oral nicotine pouches and heated tobacco.
Will Altria succeed in adapting to changing consumer behavior? Most analysts are betting that the answer is yes. If so, Altria stock, with its impressive dividend, is a smart buy.
What Is The Prediction For AT&T Stock?
AT&T stock was a member of the elite Dividend Aristocrats until February 2022. The company could not increase its dividend payment in 2021, and in 2022, the dividend was cut in half. Today, AT&T’s dividend yield stands at 5.84 percent, which is still an impressive figure when compared to NYSE peers.
AT&T didn’t take its decision to reduce dividends lightly. A variety of factors, like the disastrous 2018 Time Warner acquisition and a series of COVID-related setbacks, made the move necessary. However, analysts are confident that the lower dividend has been fully integrated into share prices.
Investors who buy AT&T stock now will enjoy a substantial discount over historical share prices, as the stock is down more than 30 percent in the past five years. The dividend may go down a bit more in 2023 as AT&T works on paying off debt, but most industry experts expect AT&T’s dividend to start rising again in 2024.
Remember, now that AT&T has divested the entertainment business, it can focus exclusively on its core telecom business.
The renewed attention is already showing results. AT&T’s customer base is growing, and it continues to lead the industry with 45 percent of the US wireless carrier market.
Meanwhile, its closest competitor, Verizon, is losing customers. If AT&T builds on this momentum, there is every reason to believe share prices – and dividends – will go up over the next few years.
Is 3M A Dividend Aristocrat?
Not only is 3M a Dividend Aristocrat – it’s a Dividend King. Only a handful of companies can boast that they have achieved King status, which requires 50 or more consecutive years of dividend increases.
At 64 years and counting, 3M made it onto the top five list for consecutive annual dividend increases. The only four companies that have been on the list longer include:
Dover – 67 years
Genuine Parts – 66 years
Procter & Gamble – 66 years
Emerson Electric – 66 years
In addition to the reliability of its dividend payments, 3M offers shareholders higher-than-average payouts. The current dividend yield stands at 4.69 percent, and there is every reason to believe those annual increases will keep coming.
3M was founded in 1902, and it is well-established in multiple industries. Primary business segments include healthcare, consumer products, industrial safety, transportation, and electronics.
As a mature company, 3M doesn’t experience the volatility of startups and organizations in the early stages of growth. It has the earnings and free cash flow to pay dividends consistently, so income investors can count on a certain level of stability.
Most analysts agree that 3M isn’t a stock to buy in hopes of share price increase. Though that may happen considering the 3M stock has returned more than 1,300 percent since inception, it is more likely that share prices will remain relatively steady.
The real draw is the above-average dividend and 3M’s reliability. That steadiness staves off the fear that is so common among investors during these complicated economic times.
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