7 Dividend Stocks That Pay for Themselves

Wouldn’t it be great if you could pick stocks for free and still reap the rewards? Unless you have a rich benefactor doling out play money, or unless you count your paper trades as “profits,” that’s not going to happen anytime soon. But dividend stock investors can get the next best thing via high yield stocks with reliable paydays. These companies can literally pay for themselves in a decade or so — and then the value of the shares is 100% profits!

Not every dividend stock pays for itself in a reasonable time, however. Companies that slash payouts or keep yields at 1% or so could take a lifetime to shell out the dividends to offset your initial investment. But a select group of stocks has done this in less than 15 years. That’s certainly long term, but considering a 100% return on investment, that’s nothing to sniff at.

Here are seven high-yield dividend stocks that have paid for themselves in less than 15 years, using real dividends and real share prices from the third quarter of 1995 to present day.

Adjusted Share Price Oct. 2, 1995: $6.42
Dividends Daid Since Oct. 2, 1995: $32.19

So the math is a bit strange accounting for the 2008 spin-off of Philip Morris and a 3-for-1 stock split in 1997. But investors who jumped into what is now Altria (NYSE: MO[2]) in 1995 had a cost basis of around $6.42. The total dividends paid by Altria across the last 15 years add up to $32.19. That means the stock is paid for and then some even at current valuations — though on this cost basis investors would be paid for five times over. And that’s not counting returns made from the 0.7 of a shares of Kraft (NYSE: KFT[3]) for every one share of Altria held in 2007 when it spun off its majority stake in the company. Current investors should be pleased that MO still has a big dividend payday, with a current yield of 6.3%.

Share Price Oct. 2, 1995: $30.50
Dividends Paid Since Oct. 2, 1995: $33.47

The math on another utility stock, Consolidated Edison (NYSE: ED[4]), is a bit easier with no stock splits to worry about. Shares are up 60% from valuations 15 years ago, and the regular dividend payments add up to a total of $33.47. It’s worth noting that ED has paid a dividend on its shares for 125 consecutive years, so it’s highly unlikely this stock will stop paying for itself anytime in the near future. The current yield for ConEdison is 4.8%.

Adjusted Share Price Oct. 2, 1995: $18.94
Dividends Paid Since Oct. 2, 1995: $36.10

Stalwart utility stock Dominion Resources (NYSE: D[5]) has seen shares more than double over the last 15 years when adjusted for a 2-for-1 stock split in 2007. But that’s not the only way this pick has paid for itself — this utility stock has delivered $36.10 per share in dividend payments since 1995. That almost pays for the current price of the stock and is almost double the initial buy-in per share fifteen years ago. Dominion stock currently yields 4.1%.

Adjusted Share Price Oct. 2, 1995: $10.58
Dividends Paid Since Oct. 2, 1995: $15.94

Much-maligned conglomerate General Electric Co. (NYSE: GE[6]) was trading for under $11 per share 15 years ago (accounting for a 2-for-1 stock split in 1997 and a 3-for-1 stock split in 2000). The GE haters will point out that a return of around 55% in 15 years is hardly better than a CD — and let’s not forget that 75% drop from its dot-com highs. Still, dividend investors have been rewarded by this company even despite the recent slashes in payouts that remain a fraction of what they were before the financial crisis. GE has paid for itself 1.5-times over since 1995 and has even paid for itself at current valuations. GE stock currently yields about 2.9%.

Share Price Oct. 2, 1995: $18.50
Dividends Paid Since Oct. 2, 1995: $24.93

Technically a real estate investment trust (REIT), Public Storage (NYSE: PSA[7]) is a dividend stalwart that has paid for itself easily in the past 15 years. What’s more, share prices are up about 450% in the last decade and a half, making this a heck of a retirement investment for those who jumped in back in 1995. The current dividend yield for PSA is 3.1%.

Adjusted Share Price Oct. 2, 1995: $14.23
Dividends Paid Since Oct. 2, 1995: $20.34

Technically a REIT like Public Storage due to its massive land holdings, timber powerhouse Rayonier (NYSE: RYN[8]) has been paying dividends since 1994 and has paid for itself for any investor that bought in across those early years. After two 3-for-2 stock splits (one in 2003 and one in 2005), RYN stock was trading for an adjusted price of around $14 in 1995 and has paid over $20 in dividends. Equally pleasing are the stock’s 15-year returns, with gains of about 180%. The current dividend for Rayonier is 4.0%.

Adjusted Share Price Oct. 2, 1995: $10.84
Dividends Paid Since Oct. 2, 1995: $11.28

Aerospace and industrial giant United Technologies (NYSE: UTX[9]) has seen three 2-for-1 stock splits — in 1996, 1999 and 2005. Adjusted for those events, investors would have bought into UTX at under $11 per share in 1995 and enjoyed a stunning return of nearly 550% in the next 15 years. To top it off, United Technologies shares would have paid for themselves via over $11 in dividends. The current dividend yield for UTX is 2.4%.