When investors are looking for the best dividend stocks, they are looking for high yield and reliability.
The dividend aristocrats are a group of about 50 stocks that have raised their dividend payments for at least 25 years in a row.
Many other companies were simply fighting to survive during the low points of the past quarter century. The dividend aristocrats have upped their payout every single year.
In addition to their remarkable consistency, these stocks have delivered higher returns and lower volatility than the S&P 500 in the past decade.
Here’s a look at the five current dividend aristocrats with the highest yields.
Dividend Aristocrat Stocks: Chevron Corporation (NYSE:CVX)
Dividend Yield: 4.2%
If Chevron Corporation (NYSE:CVX) wants to maintain its status as a dividend aristocrat, the company will need to up its next payout.
CVX currently pays a $1.07 quarterly dividend. At that payout, the stock yields about 4.2% annually. However, CVX has not raised its quarterly payout since May of 2014.
If it maintains or cuts its final quarterly dividend of 2016, its streak of 30 years of payout hikes will come to an end.
Investors can blame the global oil market collapse.
Dividend Aristocrat Stocks: Mercury General Corporation (NYSE:MCY)
Dividend Yield: 4.5%
Insurance holding company Mercury General Corporation (NYSE:MCY) currently yields 4.5%. Its most recent dividend hike came in December 2015 when it upped its payout from 61.75 cents per share to 62 cents per share.
If the company’s pattern holds, investors can expect the next quarterly payment to be 62.25 cents. Like CVX, MCY has now raised its dividend for 30 consecutive years.
In the most recent quarter, MCY delivered yet another strong showing. The dividend stock reported 11.8% year-over-year revenue growth.
Dividend Aristocrat Stocks: Helmerich & Payne, Inc. (NYSE:HP)
Dividend Yield: 4.5%
The oil services industry was one of the hardest hit energy segments during the collapse of the oil market. But incredibly, oil & gas driller Helmerich & Payne, Inc. (NYSE:HP) raised its quarterly dividend as recently as August.
HP now pays a 70 cents per share quarterly dividend, good for a 4.5% yield. Of the five highest-yielding aristocrats, HP’s 43 consecutive years of payout hikes is the longest-running streak.
Like most of its competitors, HP has struggled to deliver profits in recent quarters. However, its price-to-free-cash-flow of 26, debt-to-equity ratio of 11 and $8.83 of cash/share indicate that the dividend is relatively safe for now.
Dividend Aristocrat Stocks: AT&T Inc. (NYSE:T)
Dividend Yield: 4.7%
AT&T Inc. (NYSE:T) currently yields 4.7% and pays a 48-cents-per-share quarterly dividend. Since 2008, T has been upping its quarterly dividend by $0.01 per year.
T has raised its dividend now for 31 consecutive years.
The stock’s yield would be even higher if not for its stellar performance this year. In this low-rate environment, yield seekers have flocked to dividend stocks like T.
In fact, T is now up 20% year-to-date. Despite the gain, it still trades at a modest 13.7 forward price-to-earnings ratio.
Dividend Aristocrat Stocks: HCP, Inc. (NYSE:HCP)
Dividend Yield: 5.8%
HCP, Inc. (NYSE:HCP) is a REIT that focuses on senior housing facilities and other healthcare properties.
With a yield of 5.8%, HCP is the highest yielder of all the aristocrat dividend stocks. HCP has upped its payout for 30 straight years and now pays 57.5 cents per unit quarterly.
When its generous dividends are factored in, HCP has nearly doubled the total return of the S&P 500 in the past decade. That’s not just consistency — it’s major outperformance.
As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities.