Dividend stocks are an important part of your investment portfolio. Growth stocks are a great way to grow your overall wealth over a long period, but adding dividend stocks to the mix provides an ongoing income flow. You can use that income to help cover your living expenses, or you can turn around and plow it back into your portfolio. Either way, those regular payments are a win.
When choosing dividend stocks, a degree of caution is required. Some companies are struggling and offer a big dividend in the hopes of attracting investors who might otherwise stay far away. But that’s not always sustainable. Therefore, a high dividend yield can be a warning sign. However, it’s possible to find dividend stocks that offer a high dividend yield while also providing a stable investment.
These seven companies make the cut:
- Alliancebernstein Holding (NYSE:AB)
- Cheniere Energy Partners (NYSEAMERICAN:CQP)
- Gilead Sciences (NASDAQ:GILD)
- LyondellBasell Industries (NYSE:LYB)
- OneMain Holdings (NYSE:OMF)
- Southern Copper (NYSE:SCCO)
- Western Union (NYSE:WU)
Remember, these companies aren’t on the list for their spectacular growth potential — although some are doing quite well. The focus is on their high dividend yield.
Dividend Stocks: AllianceBernstein Holding (AB)
AllianceBernstein is a global investment company with a 50+ year history. It has locations across six continents, including research and wealth management offices, but calls Nashville home. The company is profitable, returning adjusted EPS (earnings per share) of 89 cents in its last quarter, with revenue for the quarter rising 21.1% to hit $1.09 billion. AB stock had been on a modest growth trajectory since 2017, but that accelerated through the pandemic. While AB is currently up by less than 1% in 2022, for the past 12 months it’s posted a 24% gain.
That’s not why AB stock is on this list, however. It’s here because AllianceBernstein has a solid history, a solid business model, a solid history of dividend payment and a high dividend yield. The company even continued to pay out its quarterly cash dividend through the pandemic. With a current dividend yield of 7.7%, AllianceBernstein tops this list of highest dividend stocks.
At the time of publication, AB stocked earned an “A” rating in Dividend Grader.
Cheniere Energy Partners (CQP)
Cheniere Energy Partners is an energy company with a focus on LNG (liquid natural gas), including production, storage and transportation. Renewable energy and EVs are getting all the attention these days, but natural gas is going to continue to play a big role for years. LNG is particularly attractive because it offers the ability to transport natural gas out of the U.S. to markets like Asia and Europe, where prices have been going through the roof and supply is severely constrained.
The CQP stock story has been one of slow but steady growth since 2009. There was a rough patch in 2020 when natural gas stocks were all but written off, but CQP is now well above pre-pandemic levels.
More importantly in the context of being counted among the top high-paying dividend stocks, Cheniere has been consistent and generous with those quarterly payments to shareholders. Its latest was announced in January, a quarterly payment of 70 cents per share. Cheniere’s dividend ratio is a very tempting 5.9%.
The current Dividend Grader rating for CQP stock is “B.”
Dividend Stocks: Gilead Sciences (GILD)
Biopharmaceutical stocks featured prominently in many portfolios starting in 2020. A high number of these were speculative plays, rolling the dice on startups hoping that they would win the race to develop a Covid-19 vaccine.
Gilead Sciences represents a much different biopharmaceutical investment. This an established company with a market cap of over $80 billion. It has a drug used in Covid-19 treatment (remdesivir), but has an established portfolio of treatments for ailments including HIV, hepatitis and influenza. GILD stock hasn’t been a great performer over the past six years, but the company’s not going anywhere, and all it takes is one drug in its pipeline to be a hit for GILD to surge again.
While the stock may not be a good pick for a growth portfolio, Gilead pays shareholders a regular quarterly dividend. At this point, GILD stock offers a dividend ratio of 4.6%.
Check the Dividend Grader rating for GILD stock and you’ll find it is an “B.”
LyondellBasell Industries (LYB)
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LyondellBasell is a Dutch petrochemical giant. The company is one of the world’s largest producers of plastics and chemicals and the biggest producer of polypropylene compounds. Regardless of how you might feel about plastics, polypropylene in particular is an irreplaceable part of many manufacturing processes, including automotive, household appliances and construction materials. Demand for the material has helped LYB stock to post growth of 7.8% over the past 12 months.
Just as the world’s demand for plastics and chemicals has never abated, neither has LyondellBasell’s commitment to rewarding shareholders with regular, quarterly dividend payments. That gives this stock a dividend yield of 4.5%.
LYB stock currently scores an “B” rating in Dividend Grader.
Dividend Stocks: OneMain Holdings (OMF)
When I think of financial services companies, I tend to think of New York. OneMain Holdings stands out from the pack with its headquarters in Evansville, Indiana. Not exactly a financial capital — but I’m sure it saves a fortune in rent.
OneMain Holdings is performing very well. In February, the company reported its fourth quarter and full year 2021 results. Net income was $1.3 billion for the year, up 78% year-over-year. The stellar quarter included a announcement that would catch the attention of any investors looking for dividend stocks. The company will be raising its regular quarterly dividend payment by 36% to 95 cents per share. With a dividend yield of 7.1%, this is a company that should be on your short list.
At the time of publication, OMF stock is rated as an “A” in Dividend Grader.
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