If you're in the market for some promising dividend-paying stocks, good for you! They can be powerful components in your portfolio, ideally delivering not only regular income but also, over time, appreciating stock prices.
Dividends are often underappreciated by investors, especially those of us inclined to chase fast-growing high-flying stocks. But dividend-paying stocks are no slouches. Check out the table below and see if it doesn't surprise you.
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|
Dividend-Paying Status |
Average Annual Total Return, 1973-2024 |
|---|---|
|
Dividend growers and initiators |
10.24% |
|
Dividend payers |
9.20% |
|
Dividend non-payers |
4.31% |
|
Equal-weighted S&P 500 index |
7.65% |
Data source: Ned Davis Research and Hartford Funds.
Here's a look at a few dividend payers with hefty payouts that you might consider for your long-term portfolio.
1. Realty Income
Let's start with Realty Income (O +0.70%), which recently sported a dividend yield of 5.5%. It's a real estate investment trust (REIT), which is a company that owns lots of real estate properties, leasing them out to tenants. REITs are required to pay out at least 90% of their taxable earnings as dividends. Realty Income is a bit different than most dividend payers, as it makes its payouts monthly instead of quarterly. It's also a solid long-term stock to own.
NYSE: O
Key Data Points
Launched in 1969 and now a component of the S&P 500 index, Realty Income has paid dividends for more than 660 months in a row (that's more than 55 years!) and has hiked its payout more than 130 times -- with an average annual increase of 4.2%.
It recently sported 15,600 leased properties "across 91 different industries leased to over 1,600 different clients throughout all 50 U.S. states, the U.K., and seven other countries in Europe." Top clients recently included 7-Eleven, Dollar General, Walgreens Boots Alliance, Wynn Resorts, and Home Depot.
Realty Income's stock looks attractively valued at recent levels, with a recent forward-looking price-to-earnings (P/E) ratio of 37, a bit below its five-year average of 42.
2. Pfizer
Pfizer (PFE 0.44%) is another dividend powerhouse, recently yielding 6.8%. The fat yield is because the stock has lost ground over the past few years -- which should only make it more attractive to long-term believers. The shares are down in part because of reduced demand for Pfizer's Covid-19 vaccines and Covid treatment Paxlovid, and worries about patent protections expiring for some of its big sellers. (That's an issue with many pharmaceutical companies.)
NYSE: PFE
Key Data Points
But Pfizer has solid growth potential thanks to its pipeline of drugs in development. Per Pfizer: "With over 50+ programs, 80+ clinical trials worldwide and 40% of our R&D budget dedicated to oncology, we're committed to advancements in cancer care."
The company has been posting good results, too, with its second-quarter earnings report featuring revenue up 10% year over year and adjusted earnings per share (EPS) up 30%. Its CFO noted, "We raised our full-year 2025 Adjusted diluted EPS guidance, demonstrating confidence in our ability to execute against our strategic priorities and deliver strong results for shareholders."
Pfizer's shares seem appealingly valued, with a recent forward P/E ratio of 8.2, well below the five-year average of 10.1.
3. Verizon Communications
Then there's Verizon Communications (VZ 0.15%), which recently sported a dividend yield of 6.1%. It's a telecommunication titan, recently boasting more than a million miles of fiber, just about 100% of the U.S. covered by 4G LTE, and 146.1 million wireless retail connections.
NYSE: VZ
Key Data Points
It's not a perfect stock as the company is carrying a lot of debt, but it has some upsides, too -- such as not being that affected by tariffs, which can make life miserable for many companies. Verizon has not found it easy to keep adding new subscribers, but as it works on this issue, it's still generating gobs of free cash flow (roughly $20 billion over the last year), which can be used to (gradually) pay down its debt and for dividends, as well.
Verizon's shares seem reasonably valued, too, at recent levels, with a forward P/E ratio of 9.3 near the five-year average of 9.0.
4. United Parcel Service
Finally, consider United Parcel Service (UPS +0.62%), recently yielding 7.5%. It, too, has seen its share price drop over the past few years, resulting in a fat dividend.
To be sure, UPS is battling some demons right now in the form of consumers shopping online with a little less gusto than in the early pandemic years, higher employee costs due to a new union contract, tariff-related economic disruptions (such as fewer imports from China), and even its own decision to shrink its business with Amazon.com, which has gone on to become a major delivery business in its own right.
So investors in UPS need to be believers that it will right its ship and grow over time. There are signs that UPS is moving in the right direction. CEO Carol Tomé recently noted that "We are making meaningful progress on our strategic initiatives, and we're confident these actions are positioning the company for stronger long-term financial performance and enhanced competitive advantage."
NYSE: UPS
Key Data Points
Take a closer look at any of these stocks that interest you, and know that there are plenty of other attractive dividend payers out there -- and excellent dividend-focused exchange-traded funds, too.
