7 Best Long-Term Dividend Stocks to Buy Now
By: Ned Piplovic,
While investment strategies differ with specific portfolio targets, all investors should identify a few of the best long-term dividend stocks to build the core of their investment portfolio strategy.
An easy way to pick stocks with long records of rising dividends is to pick a few companies from the Dividend Aristocrats group, or the Dividend Kings subset. These are S&P 500 stocks whose individual market capitalization exceeds $3 billion and that have boosted their annual dividend consecutively for at least the past 25 or 50 years, respectively.
Another way to pick the best long-term dividend stocks is to use a screening tool like the Dividend Screener tool available at DividendInvestor.com. The seven equities on the list below are companies with the highest yields that also have a market capitalization of at least $1 billion and have records of at least 10 years of consecutive annual dividend hikes.
7 Best Long-Term Dividend Stocks: #7
Exxon Mobil Corporation (NYSE:XOM)
Dividend Yield: 8.3%
The Exxon Mobil Corporation has enhanced its annual dividend payout amount every year for the past 37 consecutive years, making it a member of the Dividend Aristocrats. Just over the past two decades, Exxon Mobil nearly quadrupled its annual dividend payout, which is equivalent to a 7.1% average annual growth rate. The company’s current $0.87 quarterly dividend amount corresponds to a $3.48 annualized payout and an 8.3% dividend yield.
This high dividend yield is hiked somewhat by the company’s share price pullback this year, having dropped 35.7% and thereby artificially inflating the dividend yield. Despite its financial struggles this year, Exxon Mobil still managed to increase its dividend distribution by 1.5% and continue its impressive dividend payout streak.
7 Best Long-Term Dividend Stocks: #6
Verizon Communications, Inc. (NYSE:VZ)
Dividend Yield: 4.3%
Verizon Communications’ current $0.63 dividend is 1,6% higher than the $0.62 quarterly payout from the same period last year and equivalent to a $2.52 annualized payout, which yields 4.3%. This current yield is more than quadruple the 0.98% average yield of the overall Technology sector. Also, Verizon’s current yield nearly 90% higher than the simple average yield of Verizon’s peers in the Telecommunications industry segment.
Verizon’s rising dividend income distributions brought investors a net profit when combined with the stabilized 0.1% capital gains in the trailing 12 months, bringing total returns to 4.4%. Long-term investors have been rewarded with a healthy 25.4% in the last 3 years and 57.1% in the last 5.
7 Best Long-Term Dividend Stocks: #5
The Southern Company (NYSE:SO) (NYSE:SO)
Dividend Yield: 4.3%
The Southern Company’s current quarterly dividend of $0.64 is 3.3% higher than the $0.62 quarterly dividend from the same period last year. This current dividend converts to a $2.56 annualized dividend payout and a 4.3% dividend yield. Its yield is nearly 120% above the simple average yield of the entire Utilities sector, as well as 110% higher than the average yield of all the companies in the Electric utilities segment.
The Southern Company has been paying dividends since 1946 and has rewarded investors with annual dividend boosts for the past 19 consecutive years. Over that period, the company enhanced its annual dividend payout amount nearly 80%, which is equivalent to an average growth rate of 3.3% per year.
7 Best Long-Term Dividend Stocks: #4
Dominion Energy, Inc. (NYSE:D)
Dividend Yield: 4.74%
Dominion Energy’s has grown its dividend every year for the last 17 consecutive years until a streak-breaking dividend cut on December 20, 2020. Despite this nearly 7% decline in dividend payment, Dominion’s 10 year average dividend growth rate is still a rewarding 3.3%. This hiccup in dividend payment corresponds to a 5.3% decline in share price in the trailing 12 months.
The company successfully maintained its dividend distributions through the majority of 2020 and only in the last month was forced to make a cut. Despite this cut, Dominion Energy is still largely favored by the market in sentiment, scoring well when compared to its 52-week high and showing promise in its short interest ratios.
7 Best Long-Term Dividend Stocks: #3
ONEOK, Inc. (NYSE:OKE)
Dividend Yield: 9.8%
ONEOK’s current $0.94 quarterly dividend corresponds to a $3.76 annual payout, which is 6.2% higher than the $3.54 annual payout in 2019. The new quarterly amount yields an impressive 9.8%. After 16 consecutive annual hikes, the company’s total annual dividend payout amount is 10-fold higher than it was in 2002. This level of growth corresponds to an average growth rate of more than 14.6% per year.
The share price dropped 44.4% in the trailing 12 months, somewhat overinflating the dividend yield, the current ratio of price to dividend distribution. However, investors can look past this impressive yield to find a company still consistently paying a meaningful dividend with a long historical streak to back it up.
7 Best Long-Term Dividend Stocks: #2
PPL Corporation (NYSE:PPL)
Dividend Yield: 6.0%
Over the past two decades, the PPL Corporation has enhanced its total annual dividend payout amount 230%. That advancement corresponds to an average growth rate of 6.2% per year. PPL Corporation’s current quarterly dividend of $0.4125 converts to a $1.65 annualized payout and yields 5.13%, which is 8.2% higher than the PPL’s own 4.74% dividend average over the past five years.
Although the share price has declined in 2020, its 6.0% dividend is nothing to scoff at. The company scores in the 95th percentile of the 136 companies in the regulated industry utilities group, and has consistently held a dividend yield and growth rate well above its peers.
7 Best Long-Term Dividend Stocks: #1
Omega Healthcare Investors, Inc. (NYSE:OHI)
Dividend Yield: 7.2%
After cutting its annual dividend nearly 65% in 2000, Omega Healthcare Investors, Inc. resumed annual dividend hikes in 2003. Since 2003, the REIT has enhanced its total annual distribution amount 340%, which corresponds to an average growth rate of 10.4% per year. The current quarterly distribution of $0.67 corresponds to a $2.68 annualized payout and a 7.2% forward dividend yield.
Omega’s share price declined more than 45% between its all-time high in early 2015 and April 2018. However, the price had recovered all those losses by the beginning of November 2018. After recovering fully, the price continued to rise and gained more than 45% above the April 2018 low by the beginning of April 2018. In the 3 years since, Omega Healthcare has rewarded its investors with stellar 71.8% unadjusted returns. Although it is slight down (by 3.2%) in the trailing 12 months, the company seems to be maintaining its general upward trajectory and continued to increase its dividend for the 17th consecutive year.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.