While many investors have an appetite for risk, there’s room for a little certainty in anyone’s portfolio. Dividend stocks can play a useful role in that sense. Pick a company with a longstanding and hopefully growing quarterly payout and you don’t need outsized gains to feel good.
Here are three high-powered dividend stocks to consider — and the risks involved in each.
Dividend Stock 1: Cisco Systems, Inc.
Cisco Systems, Inc. (NASDAQ: CSCO) stock is the only pick on this list that’s paying a strong dividend and also posting organic stock gains. That makes it a high-powered dividend stock indeed. The stock’s forward yield is just over 3%, despite shares climbing from around $30 to $43 over the last year.
The tech behemoth, which is betting big on the Internet of Things, first started paying a dividend of 6 cents in 2011 and has increased that dividend every year since, so it’s now 33 cents per share.
Dividend Stock 2: Verizon Communications Inc.
Verizon Communications Inc. (NYSE:VZ) stock has more or less moved sideways over the last 12 months, but investors in the stock have still been rewarded over that time period with one of the best dividend payouts in the game. With an annual dividend of $2.36, Verizon stock sports a forward yield just shy of 5%.
Verizon stock, according to its investor relations page, has been trading since the year 2000 and has been paying out a dividend that whole time. (Before that, it traded as Bell Atlantic and paid a dividend during that time too). It has upped the per share payout in every year since 2006 as well. While the company doesn’t have a huge amount of growth on tap — less than 6% per year for the next half-decade — management’s historical focus on rewarding loyal investors suggests upping the payout each year will continue to be a priority.
Dividend Stock 3: General Electric Company
General Electric Company (NYSE: GE) tells a similar story: Forward-looking growth is pretty shrug-worthy. The stock has lost half its value over the last 12 months after leadership shake-ups left investors uncertain at best. But that could just mean a great entry point and great future yield on cost for savvy dividend investors. General Electric has paid a dividend for more than 100 years, returning $8 billion in dividends last year alone.
The payout has more or less increased each year — when adjusted for stock splits. Most recently it was cut in wake of the Great Recession but resumed its upward trajectory right after. General Electric will likely continue to be a rocky ride for a little longer, as leadership figures out what to do with its portfolio of companies. But the silver lining is that you can bet management won’t want to rock the boat any more than it is already by cutting the one certain thing about GE stock.
As of this writing, Robert Martin did not own a position in any of the aforementioned securities.