7 Large-Cap NASDAQ Dividend Stocks Investors Should Consider
By: Ned Piplovic,
Despite individual portfolio strategies to achieve specific financial goals, most income investors seek equities that have similar characteristics, such as the seven NASDAQ dividend stocks featured in this article.
Some of the criteria that income investors target are fairly obvious. Dividend yield above a certain value and number of consecutive dividend hikes are probably most common. While these two measurements provide an incomplete picture of a stock’s dividend worthiness, both can quickly reduce the number of stocks from several thousand to just a few dozen potential candidates.
However, these two indicators have some shortcomings and should not be used as sole determinants for choosing investments. While a high or increasing dividend yield is desirable, it does not indicate whether the yield increase resulted from rising payouts or a declining share price. Therefore, the total return measurement will provide additional information about whether the share price rose to complement the rising dividend for upsized returns, declined to offset dividend income growth or cancelled out the dividend income growth to cause a loss for shareholders.
The companies on this list have been selected with dividend investor’s Dividend Screener. All picks trade their shares on the NASDAQ exchange, have market capitalizations of more than $7 billion, have current dividend yields of more than 3% and have boosted their annual dividend at least for the last five consecutive years. Additionally, the list excludes mutual funds.
The current yields of all seven NASDAQ dividend stocks below are in a narrow range between 3.02% and 4.02%, with a simple average yield of 3.48%. Furthermore, all picks on this list have total returns over the trailing 12 months that exceed their respective dividend yield. This measure indicates that the equities offer at least marginal capital gains over the last year. The simple average total returns across all seven equities are 14.3% over the last 12 months, 41.2% over the past three years and nearly 90% over the past five years.
Below is the list of the seven NASDAQ dividend stocks investors should consider, ranked in ascending order by their current dividend yield.
7 Large-Cap NASDAQ Dividend Stocks: #7
Texas Instruments, Inc. (NASDAQ:TXN)
Growing at an average annual rate of 20%, the company’s dividend advanced 42-fold over the past two decades to the current $3.60 annual payout, which yields 3.02%. While lowest on this list in terms of dividend yield, Texas Instruments offers strong capital gains that place the company’s total returns among the highest overall.
Just over the trailing 12 months, capital gains of more than 20% pushed the total one-year returns on shareholders investment above 28%. Over the past three years, the total return exceeded 70%. Lastly, the shareholders more than doubled their initial investment over the past five years with a total return of nearly 150%.
7 Large-Cap NASDAQ Dividend Stocks: #6
Cisco Systems, Inc. (NASDAQ:CSCO)
After eight consecutive annual dividend hikes since the introduction of distributions in 2011, the company’s current $1.40 annual payout corresponds to a 3.08% forward yield. The dividend advancement of nearly six-fold since 2011 is equivalent to a 25% average annual growth rate.
Because of a flat share price performance, dividend income contributed most of the company’s 5.1% total return over the trailing 12 months. However, the company delivered a 63% total return over the last three years and an 87% total return over the past five years.
7 Large-Cap NASDAQ Dividend Stocks: #5
CyrusOne, Inc. (NASDAQ:CONE)
Xcel Energy’s current yield is 3.2% and the company has boosted its annual dividend every year since beginning dividend payouts in 2013. Over this time frame, the company enhanced its annual dividend payout more than four-fold for an average dividend growth rate of nearly 27% per year.
After rising steadily for the first three years, the company’s share exhibited increased volatility since mid-2016 but continued an overall uptrend and has gained 140% over the last five years. The current dividend income payouts and a double-digit-percentage share price rise combined for a 22.6% total return over the trailing 12 months. The total return over the last three years was 58% and nearly 158% over the last five years.
7 Large-Cap NASDAQ Dividend Stocks: #4
Maxim Integrated Products, Inc. (NASDAQ:MXIM)
Maxim Integrated Products current 3.37% dividend yield is the median of the group. This company has a record of raising its annual dividend every year since beginning payouts 16 years ago. Over the past 15 years since its first full year of dividend distribution, the company has enhanced its annual payout amount nearly nine-fold, which corresponds to a 15.5% average annual growth rate.
The company accompanied its rising dividends with steady asset appreciation of 80% over the last five years. Over the trailing 12 months, the share price gain of 5.8% provided approximately half of the company’s 11.5% total return. The three year total return exceeded 50% and shareholders more than doubled their investment over the last five years with a total return of 122%.
7 Large-Cap NASDAQ Dividend Stocks: #3
Regency Centers Corporation (NASDAQ:REG)
Regency Centers Corporation’s current yield is 3.64% and the company has boosted its annual dividend over the past six consecutive years. The company reduced its dividend payouts in the aftermath of the 2008 financial crisis and paid four consecutive years of flat annual dividends afterwards. However, since resuming annual dividend hikes in 2014, the company enhanced its distribution payouts 26%, which corresponds to an average annual growth rate of 4%.
After nearly tripling from its post-crisis level, the share price lost a third of its value between mid-2016 and the end of 2018. This decline limited the five-year asset appreciation to less than 3%. Furthermore, the share price one year ago was marginally below its level from five years ago, which translated to similar capital gains of 2.9% over the trailing 12 months. However, year-to-date in 2019, the share price advanced more than 13%. Including dividend income payouts, total returns over the last 12 months and five years were 6.25$ and 23.5%, respectively.
7 Large-Cap NASDAQ Dividend Stocks: #2
Principal Financial Group, Inc. (NASDAQ:PFG)
With a 4.01% current yield, the Principal Financial Group missed the top spot of this list by a mere hundredth of a percentage point. The company enhanced its annual dividend nearly five-fold since cutting the annual payout amount in half for 2008. This advancement corresponds to an average annual dividend growth rate of 15.4% over the past 11 years.
A share price decline of nearly 45% in 2018 limited capital gains to just 2.6% over the past five years. However, a direction reversal at the end of 2018 set the share price on its current uptrend. The share price advanced 12% over the trailing 12-month period and more than 23% since the beginning of 2019.
Consequently, the total return over the last three years is less than 5%. Additionally, because the 2018 price pullback limited the overall gains over the extended period, the one year total return of 18% is nearly as much as the 18.5% total return over the last five years.
7 Large-Cap NASDAQ Dividend Stocks: #1
Huntington Bancshares, Inc. (NASDAQ:HBAN)
This security’s current yield is 4.02% and the company boosted its annual dividend for the past nine consecutive years. The share price delivered robust long-term gains of 43% over the last five years. A pullback of more than 20% in late-2018 amid the overall market correction limited the stocks asset appreciation to 4.6% over the trailing 12 months. However, since the beginning of 2019, the share price has advanced nearly 23%.
Since its most recent dividend cut in the aftermath of the 2008 financial crisis, the company has enhanced its annual dividend payout 15-fold, which corresponds to a 35% average annual growth rate. This rising dividend income combined with asset appreciation to deliver an 8% total return over the trailing 12 months. Additionally, the longer-term total returns were 31% over the last three years and 68% over the past five years.
Dividend increases and dividend decreases, new dividend announcements, dividend suspensions and other dividend changes occur daily. To make sure you don’t miss any important announcements, sign up for our E-mail Alerts. Let us do the hard work of gathering the data and sending the relevant information directly to your inbox.
In addition to E-mail Alerts, you will have access to our powerful dividend research tools. Take a quick video tour of the tools suite.
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.