Dividend stocks are the bread and butter of any serious investment portfolio, and large-cap U.S. stocks are often great picks for dividend income.
Stocks in Dow Jones Industrial Average may be the wisest investment you can make in 2018, particularly with long-term money.
The index of 30 largest publicly traded companies in the USA are industry leaders with yields between 0.7% and 4.6%.
The stocks outlined below ahead are considered “safe” dividends, meaning the management is likely to continue paying out quarterly income to shareholders.
American Express (AXP)
With a yield of 1.4% and six consecutive annual dividend increases, credit giant American Express has an impressive track record. Investing legend Warren Buffett purchased 5% of the company in the 1960’s. American Express now makes up 8% of the portfolio of Buffett holding company Berkshire Hathaway.
“American Express’ competitive advantages — a reputation for superior service, a network of attractive customers and merchants, and a corporate business with high switching costs — remain intact for now, and we think the closed-loop network’s close ties to cardholders and merchants provide a solid base for the next phase in the company’s history,” says Jim Sinegal, senior equity analyst at Morningstar.
Cisco Systems (CSCO)
Cisco Systems dividend payout has grown by 14% over the past five fiscal years, with a current yield of 2.9% and six consecutive annual raises. CEO Chuck Robbins has lead the company to add new subscription-based products, now responsible for 32% of sales.
Due to this, recurring revenue has increased year after year. As well, the company boasts over 20,000 engineers with research spending in the excess of $6 billion. The improving nature of Cisco’s business should place them on your radar.
It should be no surprise that one of the most successful technology companies is this list.
Kim Kelleher, an analyst for the financial company Argus, forecasts that the long term earnings per share (EPS) growth rate of Apple is approximately 13%.
The iPhone maker currently has a 1.5% dividend yield and boasts five consecutive yearly increases. In 2012, when the company first began issuing dividends, it still experienced a growth rate of 60%. With consistent growth and innovation, Apple’s payouts should increase with time, too.
Hormel Foods (HRL)
This leading food manufacturing company is currently at a historical high with a 2.1% dividend yield.
Hormel’s management estimates that the 2018 fiscal year earnings will increase by 8%. The company has raised dividend payouts 52 years in a row. Recent acquisitions, including Farmer John’s and Cerrati in 2017, means Hormel Foods has consistently proved itself to be a worthy investment consideration.