Key Points
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Put your money to work. Make it make you money.
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It can make you a good deal of consistent money if you invest wisely in higher-yielding Dividend King stocks.
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Put your money to work and make it make you money.
Unfortunately, it’s not going to make you much money in a standard low-yielding savings account. But it can make you a good deal of consistent money if you invest wisely in higher-yielding Dividend King stocks. Not only are you investing in reliable growth, but you’re also investing in a company with reliable dividends.
Look at Coca-Cola (NYSE: KO), for example.
The company just approved its 63rd consecutive annual dividend increase, raising its quarterly dividend to 51 cents per share. It’s considered a Dividend King because it’s been paying out a dividend for more than 50 years. In KO’s case, it’s been distributing yield since 1971.
Today, if you bought $25,000 worth of the KO stock, you would take ownership of 349 shares. With a $2.04 annual payout, you can sit back and collect about $712 in yearly income. And all you had to do was buy and hold a popular stock.
As for other Dividend Kings to consider, here are three you may want to buy today.
Pepsico
With a yield of 4.3%, Pepsico (NASDAQ: PEP) is a familiar name with a strong, dependable yield. PEP has now raised its dividend for the 53rd time since 1965. Most recently, PEP paid out a quarterly dividend of $1.4225 per share – a 5% increase year over year – on June 30.
Annualized, that’s $5.69.
So, if you invest $25,000 in PEP now, you can take ownership of about 188 shares. You’re buying a dependable company with years of success. And, using today’s PEP price of $132.60, you can collect $1,069.72 in yearly income just by holding the PEP stock.
Helping, analysts at RBC just reiterated a sector perform rating on the stock with a target price of $163 per share. We also have to consider the company is investing in inorganic growth as it gets more involved with healthier food and beverages. For example, PEP just acquired Poppi – a healthy soda brand – for $1.95 billion.
American States Water
With a yield of 2.41%, Dividend King, American States Water (NYSE: AWR) provides water and electric services with a strong history of consistent dividend increases. It’s paid out a dividend every year since 1931.
While it may sound boring, it’s a moneymaker with a tight dividend.
Just last month, AWR approved a quarterly dividend of $0.4655 per share – its 356th consecutive dividend – which is payable on June 3 to shareholders of record as of May 19.
Annualized, that’s $1.862.
If you invested $25,000 in AWR, you’d take ownership of just over 322 shares. That would hand you about $599.56 per year in dividends.
Helping, AWR just blew earnings out of the water.
In its first quarter, EPS of 70 cents beat by three cents. Revenue of $148.01 million, up 9.4% year over year, beat by $2.16 million. Plus, analysts at Wells Fargo just upgraded AWR to an equal weight rating with a price target of $84.
Target
With a yield of 4.73%, Target (NYSE: TGT) is another interesting, yielding opportunity.
The company just declared a quarterly dividend of $1.12 per share. Annualized that’s $4.48 per share. If you were to buy $25,000 worth of the TGT stock, you’d take ownership of just under 264 shares. Not only can you profit from potential stock price appreciation, but you can also collect an annual dividend of $1,182.72.
Granted, Target has come under pressure on earnings. However, it does look like most of the negativity has been priced into the retailer. Helping, TD Cowen analysts initiated coverage of the stock with a hold rating with a price target of $105.
“The analysts highlighted Target’s attractive core business, which is supported by innovative and exclusive products, as well as profitable digital fulfillment strategies with potential for scale,” as noted by Investing.com.
If you want to diversify even more, there are always dividend-paying ETFs.
SPDR Portfolio S&P 500 High Dividend ETF
With an expense ratio of 0.07% and a yield of just under 5%, the SPDR Portfolio S&P 500 High Dividend ETF (NYSEARCA:SPYD) tracks the total return performance of the S&P 500 High Dividend Index, which is designed to measure the performance of the top 80 high dividend stocks on the S&P 500. At the moment, it has 77 holdings.
Some of its top holdings include CVS Health Group, Consolidated Edison, Philip Morris, AT&T, Exelon Corp., Verizon, and Altria Group to name just a few.
iShares Core High Dividend ETF
There’s also the iShares Core High Dividend ETF (NYSE: HDV).
With an expense ratio of 0.08% and a yield of 3.36%, the HDV ETF tracks the investment results of an index composed of relatively high dividend-paying U.S. equities. Some of its 75 holdings include Exxon Mobil, Johnson & Johnson, Progressive Corp., Chevron, AbbVie, Philip Morris, AT&T, and Coca-Cola.
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