Investors prefer investing in high yield dividend stocks as they benefit from additional income from investment in dividend-yielding companies. As a result, many investors prefer top dividend paying stocks for regular dividend returns. The allure of dividends makes a stock attractive as the potential for earnings from regular dividends and capital appreciation. Moreover, investing in best dividend-paying stocks can ensure a steady income stream and ensure that the company is doing well financially.
Companies that pay dividends tend to be well-established, so dividend stocks may also add some stability to your portfolio. That’s one reason they are low-risk investments.
What are dividend stocks?
Dividend stocks are shares of companies that regularly pay investors a portion of the company’s earnings. The average dividend yield of some of the top dividend stocks is 12.69%.
The best dividend stocks are shares of well-established companies that increase their payouts over time.
Investors can also choose to reinvest dividends if they don’t need the stream of income. Here’s more about dividends and how they work.
Signs of high yield dividend stocks
Given ongoing economic uncertainty and stock market volatility, investors looking for the best dividend stocks might consider adding undervalued, quality dividend stocks to their portfolios. After all, quality companies have the financial stability to maintain their dividends during questionable economic periods, and price risk is reduced when investors can buy the stocks of these companies on the cheap.
Top dividend stocks 2024
The Dow Jones Industrial Average recently hit 40,000 for the first time, and the S&P 500 is already well on the way to hitting the 6,000 level. The market is in full-on boom mode right now. For momentum investors, it’s been an incredible run.
But others are nervous about the market. Valuations are growing increasingly stretched, while both political and economic risks are mounting. Making this a good time for investors to lock in more conservative, income-paying securities. When the next market correction or bear market inevitably hits, the top dividend stocks listed below will help people ride out the storm and earn an above-average income stream along the way:
Exxon Mobil Corp. (XOM)
One of the high yield dividend stocks is Exxon Mobil. After several years of strong performance, energy stocks have cooled off in 2024. The price of natural gas has plummeted, and crude oil has also stalled out in the $70s and low $80s, coming up well short of what energy bulls had been hoping for. While commodity investors are disappointed, the setback has created a second chance for income seekers.
Exxon Mobil is arguably the gold standard of income investments within the energy sector. The company has thrived for decades throughout all sorts of geopolitical and economic environments. Exxon pairs its strong upstream oil business with some of the world’s finest refining and chemical operations. With the recent pullback, XOM stock is paying out a solid 3.5% yield.
International Business Machines Corp. (IBM)
IBM’s long-running investment in artificial intelligence is finally being rewarded as well. IBM was one of the first companies to make major investments in AI; its Watson system is one of the pioneers in applying AI to real-world problems. Now that the market is enthusiastic about it and IBM stock has started to heat up with shares finally enjoying a considerable rally over the past year. Even so, this tech giant is still at a reasonable 17 times forward earnings while delivering a 3.9% dividend yield.
Stellantis NV (STLA)
Stellantis is a multinational car manufacturing company that offers brands such as Chrysler, Dodge, Jeep, Maserati, Ram and Peugeot. Stellantis is a massive company, generating about $200 billion in annualized revenues. Even with the intervention of Tesla Inc. (TSLA) and Rivian Automotive Inc. (RIVN) the traditional powerhouses have started to regain the initiative over the past year.
Stellantis is a value investor’s dream, as the stock trades at a shocking 3.7 times forward earnings. Sure there are risks associated with Stellantis as sutomobiles are a cyclical industry with higher economic volatility. That said, at this starting valuation, STLA stock should make its shareholders happy. The 8.2% dividend yield is another compelling reason to own the stock.
CK Hutchinson Holdings Ltd. (OTC: CKHUY)
Leading infrastructure company CK Hutchinson has interests in retail, telecom, infrastructure and seaports. The seaport business is particularly interesting, with CK controlling 293 berths in 51 ports spanning 25 countries. It also earns money from other sea logistics, such as cruise ship terminals, river trade and ship repair facilities.
The stock is currently trading at six times trailing earnings while offering a 6.9% dividend yield.
First Hawaiian Inc. (FHB)
First Hawaiian is the largest and oldest bank in Hawaii, with more than $19 billion in assets. It also serves the islands of Guam and Saipan. Hawaii is a unique banking market, as the largest four players combined make up more than 90% of the total deposit base. Given its relatively small size and geographical isolation, the major U.S. banks choose not to compete in Hawaii, giving the local players a great deal of market power. This allows First Hawaiian to earn higher returns on its assets and equities than the average American regional bank. The stock yields 5.2% to boot.
British American Tobacco PLC (BTI)
British American Tobacco is one of the world’s largest tobacco companies. BTI stock has underperformed recently, in large part because the company took a massive write-down on its legacy cigarette business. However, management has already noted that cigarettes are slowly winding down, and the company’s future is in its other nicotine products. These newer options are growing quickly and are ahead of management’s long-term growth projections. Shares trade for less than seven times forward earnings and pay a 9.6% dividend yield.
Realty Income Corp. (O)
Realty Income is a triple-net real estate investment trust, or REIT. While shifting out of offices, Realty Income has moved into entertainment-related venues that are benefiting from the current boom in consumer spending. Realty Income has turned this into an admirable dividend growth track record; it is now a Dividend Aristocrat that has increased its payout for 26 consecutive years. The REIT currently pays a 5.9% dividend yield.
American Tower Corp. (AMT)
American Tower is the world’s largest telecom and communications assets-focused REIT. It owns and operates more than 224,000 communication sites globally. Its stock rallied from a low of $2 around the turn of the century to nearly $200 per share now.
However, the stock has been down over the past five years. High interest rates and slowing growth rates in the communications market have weighed on American Tower and other communications-focused REITs. But with diversification American Tower move into the data center space should unlock more growth opportunities, with declining interest rates.
