It’s hard to beat dividend stocks like real estate investments trusts (REITs) and master limited partnerships (MLPs) for high dividend yields, but since those payouts flow directly from earnings, their income streams can be volatile. (Hey, as with everything else in investing and life, there’s no such thing as a free lunch.)
That’s why it’s important to diversify your holdings in high-yield dividend stocks with some dependable straight-up corporate payers, too — preferably ones that add plenty of price appreciation. After all, income is only half of the equity-income equation.
Sure, if you’re content to take a generous stream of income without the chance for price appreciation you can always buy bonds and hold them to maturity. But price appreciation is where the real money is made, so you’re missing out if you don’t own at least some stalwart large-caps that pay high dividends with good track records on price.
That’s why we searched for dependable large-cap stocks sporting dividend yields of at least 5%. Furthermore, these dividend stocks had to outperform the S&P 500’s total 1-year return of 21% by at least 5 percentage points.
That left us with dividend stocks that have been total return monsters. Between dividends and share-price performance, these stocks have put up market-crushing gains and could very well have more to come: