Dividend-paying large-cap stocks are some of the best ways to add wealth to your portfolio. That’s because the company pays you to hold your shares when you have a dividend stock. And that’s true of even the biggest of large-cap stocks.
Most dividend-paying large-cap stocks issue payouts on a quarterly or monthly basis. If you are a younger investor, putting those payouts back into the stock makes sense to increase your position and grow your portfolio even faster. Once you get that money, it’s yours to do with as you see fit.
But if you’re a retiree, you’re probably more inclined to take those payouts as income to supplement your other retirement accounts.
Either way works, and I appreciate a company that cares for its shareholders. I’ve used my Portfolio Grader to evaluate some of the most significant dividend-paying large-cap stocks that would make outstanding choices for any dividend portfolio.
| NVDA | Nvidia | $265.27 |
| MSFT | Microsoft | $283.39 |
| AAPL | Apple | $162.66 |
| CVX | Chevron | $169.18 |
| KO | Coca-Cola | $62.71 |
| VLO | Valero Energy | $133.31 |
| SBUX | Starbucks | $104.69 |
Nvidia (NVDA)
Semiconductor chipmaker Nvidia (NASDAQ:NVDA) is one of the hottest chip makers on the planet. The company’s stock is up nearly 90% in 2023, pushing the market capitalization to $689 billion.
Nvidia produces chips that can produce amazingly advanced graphics highly prized by gaming applications and gaming centers.
But with the popularity of the ChatGPT online chatbot developed by OpenAI, Nvidia is breaking new ground. It’s on Nvidia’s advanced graphics chips OpenAI is training its large language models.
Nvidia is now making its DGX Cloud available online to give more businesses access to the infrastructure to develop artificial intelligence tools for themselves. The sky is the limit for NVDA at this point.
Nvidia currently pays a minimal dividend. The payout ratio is 0.06%, but it’s still one of the more reliable dividend-paying large-cap stocks out there. I hope this company does a better job down the road of rewarding its shareholders with a payout. NVDA stock has a “B” rating in my Portfolio Grader.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is another of the dividend-paying large-cap stocks getting huge attention from ChatGPT and the growing AI trend. Microsoft partnered with OpenAI and uses the ChatGPT software to enhance searches on its Bing search engine and Edge web browser.
The excitement helped push Microsoft shares up nearly 20% this year, with a market cap north of $2.1 trillion.
As I wrote recently on my takeout on Microsoft, the company’s stock is also up on some positive news. It recently announced a plan to integrate AI technology into other platforms, including the planned Microsoft 365 Copilot. And these AI headwinds could also breathe new life into the Azure cloud computing segment.
Microsoft, which provides a dividend yield of nearly 1%, has a “B” rating in the Portfolio Grader.
Apple (AAPL)
They don’t get any bigger than Microsoft and the next company on our list. Apple (NASDAQ:AAPL), the maker of the iPhone, wearables and Mac computers, has a market cap of $2.6 trillion.
It’s well on the way to becoming the first $3 trillion stock, particularly after gaining about 30% this year.
Analysts are undoubtedly bullish about AAPL stock, citing robust demand for iPhones and strong interest in China. But I’m much more focused on the upcoming Worldwide Developers Conference in early June. At that event, Apple could very well roll out its augmented reality/virtual reality headset product.
It’s been a while since Apple’s shown us something entirely new, so the reception to such a product will impact AAPL stock. But if you need another reason to like Apple stock, consider the Services segment that includes the App Store and iCloud.
Revenue from Services reached $19.5 billion in the fiscal first quarter, a new record for the company. That’s a significant trend considering that Apple gets a much higher profit margin on Services revenue than from items that require a lot of equipment and research, such as iPhones and headsets.
Apple’s current dividend yield is 0.5%, and it has a “B” rating in the Portfolio Grader.
Chevron (CVX)
Chevron (NYSE:CVX) has upstream exploration and production facilities worldwide, including in the U.S., the Gulf of Mexico, Australia, Nigeria, Angola and Kazakhstan, and sports a market cap of $324 billion.
Chevron stock has been treading water the last few weeks, down about 5% on the year but showing a slight increase over the previous month. The stock appears to be gathering some steam to make another run higher, particularly now that OPEC announced it is cutting oil production.
The rising oil price and demand for natural gas make Chevron a cash machine. The company brought in $35.5 billion in earnings in 2022 and doled out $11 billion in dividends while spending another $11.25 billion in share buybacks.
With a dividend yield of 3.5%, CVX stock has a “B” rating in the Portfolio Grader.
Coca-Cola (KO)
Famed soda maker Coca-Cola (NYSE:KO) may be one of the best-known consumer brands on the planet. From its headquarters in Atlanta, Coca-Cola has become the world’s biggest non-alcoholic beverage company.
That’s helped push Coca-Cola to a market capitalization of $270 billion, selling products in more than 200 countries around the world. But even with that massive footprint, the company believes it has a broad runway for growth.
Coca-Cola claims it has a 14% market share in the developed world. But in the much larger developing and emerging world, Coca-Cola has roughly a 7% share.
It has a vast arsenal of brands to market to those potential customers, including sodas and carbonated beverages, teas, coffees, water, sports drinks and juices. And it’s recently dipped its toes into alcoholic beverages by offering hard seltzers and canned mixed drinks.
Earnings for the fourth quarter were $10.2 billion in revenue, beating analysts’ estimates for $9.93 billion revenue. KO also matched expectations, paying 45 cents in earnings per share.
KO stock is up 5% over the last month, providing a dividend yield of nearly 3%. It gets a “B” rating in the Portfolio Grader.
Valero Energy (VLO)
Valero Energy (NYSE:VLO) is another excellent energy stock, but it’s of a different flavor than Chevron. Instead of oil and gas exploration, Valero is a downstream company that is the world’s largest producer of renewable fuels.
Besides petroleum refineries, Valero has ethanol plants and offers dry distillers’ grains, ethanol and corn oil to gasoline blenders and refiners.
Fourth-quarter earnings included $41.75 billion in revenue, but it missed expectations of $43.32 billion. Earnings per share of $8.45 per share was better than analysts’ expectations of $7.25.
VLO stock is up 25% over the last 12 months, pushing its market capitalization to $47.2 billion. It also provides a healthy dividend yield of nearly 3%.
VLO stock has an “A” rating in the Portfolio Grader.
Starbucks (SBUX)
Famed coffee chain Starbucks (NASDAQ:SBUX) is one of the world’s biggest restaurant chains, boasting more than 36,000 stores. But it’s also a company in transition.
The company struggled mightily during the Covid-19 pandemic before finally rebounding by mid-2021 to set all-time highs. But since then, Starbucks stock has struggled.
Faced with high inflation and unionization issues, interim CEO Howard Schultz stepped down last month to make way for new CEO Laxman Narasimhan. Previously, Narasimhan was CEO of Reckitt Benckiser Group (OTCMKTS:RGBLY) and had executive positions with PepsiCo (NASDAQ:PEP). Notably, SBUX stock is up 5% since the change in power.
Starbucks is a brand constantly tinkering with its menu to develop something new. The most recent offering is oleato coffee, a coffee drink infused with extra virgin olive oil. It will have to continue to evolve if it will be successful under Narasimhan’s watch.
With a market cap of $119 billion, SBUX offers a dividend yield of 2%. It currently has a “B” rating in the Portfolio Grader.
On the date of publication, Louis Navellier held NVDA, MSFT and VLO. He did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
On the date of publication, the InvestorPlace Research Staff member primarily responsible for this article held AAPL. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
