In a corporate world where cutting costs has become key to survival, it’s amazing to some investors that there even are dividends out there. However, I can see why so many investors have made it a priority that the stocks they buy pay dividends.
It has been a long road back to Dow 11,000 so it makes sense that investors, in their attempt to squeeze every bit of profit out of the market, have turned to dividend-paying stocks. It’s free cash that you get simply for owning select stocks — and it adds up!
Take Colgate-Palmolive (CL) for example. CL has paid a dividend every year since 1977 and has increased its annual dividend from just 2-cents per share to 40-cents per share over that time. For every 100 shares of CL you bought in 1977, you’d have roughly $1,700 in dividend payments in your pocket today. And that doesn’t take into account the stock’s price movement or splits over that time.
Which High Yield Dividend Stocks are Worth Buying?
Since I used Colgate-Palmolive (CL) as an example, let’s see how it stacks up as a new buy today. We already know that the company has paid uninterrupted dividends on its common stock since 1895 and increased payments to common shareholders every year for almost half a century. When it comes to dividends, this company is as solid as a rock. And when you look at the company’s fundamentals, all signs say this is a good stock to buy today.
General Electric (GE) is also a good dividend stock to buy. GE is one of the most recognizable brands in the world and has a long dividend history. General Electric’s first dividend payment came in 1963 and has been faithfully paid ever since. However, as a company with operations in everything from technology and media to financial services, it has been hit hard by the recession. The stock is still off 50% from its highs and it appears that there is a long road ahead for the conglomerate. I would consider steering clear of this stock even with its dividend history.
Exxon Mobil (XOM) is yet another company that has paid a reliable dividend since the early 1970s. However, don’t be fooled by the dividend. Even a reliable stream of cash isn’t enough to warrant buying this company right now. Like GE, will likely continue its stock pattern of jumping higher and lower in a tight range that will make your stomach queasy before it makes your portfolio richer.
I want to leave you with one dividend payer that you may not think is a very exciting company, but it pays a strong dividend, has a recognizable brand and is a good buy right now. I’m talking about H.J. Heinz Company (HNZ). HNZ has been paying dividends since the end of 1984 and is one of my favorite blue chip dividend stocks right now. With improving fundamentals and stock price over the last 12 months, this is definitely a strong addition to your portfolio.
As of this writing, Louis Navellier owned shares of CL and HNZ in personal or client portfolios.