Dividends are in high demand among investors, and companies are responding. Tech giant Meta Platforms (NASDAQ:META) declared its first dividend earlier this year. At the same time, Nvidia (NASDAQ:NVDA) hiked its distribution to shareholders by 150%, and Costco (NASDAQ:COST) issued a special one-time dividend payment of $15 per share. Increasingly, investors see dividends as a reason to hold a stock long-term.
It’s important to understand that not all dividends are equal. The average dividend yield among S&P 500 listed companies is currently 1.35%. Many companies pay quarterly distributions of less than 1% of their stock price. That said, a select few companies pay generous dividends with yields much higher than average. These companies also prioritize steadily growing their dividends over time.
Here are the three top-performing dividend stocks so far in June 2024.
Top-Performing Dividend Stocks: Diamondback Energy (FANG)
Oil producer Diamondback Energy (NASDAQ:FANG) pays a hefty quarterly dividend of $2.32 per share, giving the stock a robust yield of 4.80%. Shareholders can earn a healthy income from Diamondback Energy’s generous distribution. At the same time, FANG stock is trading at a low multiple of 10 times future earnings estimates, and its share price has risen nearly 50% in the last 12 months.
While the stock has pulled back since the end of April due to slumping crude oil prices, the shares look to have bottomed at $189 at the start of June and have since bounced higher. FANG stock looks to have a big catalyst ahead as Diamondback Energy completes its $26 billion acquisition of privately held Endeavour Energy. The purchase of Endeavour will make Diamondback Energy the third-largest oil producer in the Permian Basin of Texas.
Verizon Communications (VZ)
Verizon Communications (NYSE:VZ) has one of the highest dividend yields around, at 6.60%. VZ stock currently pays its shareholders 67 cents per share each quarter. Verizon stock also has an attractive valuation, trading at 15 times future earnings estimates. The share price has been on an upswing, rising 13% in the last 12 months. The stock got a lift after the company’s first-quarter financial results turned out better than expected.
Investors cheered as Verizon reported solid earnings and stemmed losses among its wireless subscribers. Management credited the positive results to its flexible plans and streaming bundles, including discounted prices for services like Netflix (NASDAQ:NFLX). In the future, Verizon plans to build on the success of its customizable “myPlan” offering, which has proven popular with consumers.
Dick’s Sporting Goods (DKS)
Earlier this year, retailer Dick’s Sporting Goods (NYSE:DKS) raised its dividend by 10%. Dick’s now pays a quarterly dividend of $1.10 per share, giving it a yield of 2.02%. A year earlier, the company doubled its dividend payment to $1 a share. Dick’s Sporting Goods continues to prioritize its dividend as it reports record financial results. DKS stock has gained 12% since the company’s last print at the end of May.
So far in 2024, Dick’s stock has risen nearly 50%. The company most recently reported Q1 EPS of $3.30 versus $2.95, which was expected among analysts. In the first three months of this year, revenue totaled $3.02 billion versus $2.94 billion, the consensus forecast on Wall Street. Sales rose 6% from a year earlier. Management attributed the strong results to consumers spending more on sneakers and athletic gear.
Despite the big run higher, DKS stock still trades at a reasonable valuation of 18 times future earnings estimates.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
