If you’re looking for new investment ideas, it would be worthwhile to check out the contenders for our top dividend stocks for July 2015.
Stock prices are unpredictable from day to day. Dividends, in contrast, are like the Swiss trains of finance; they almost always arrive on schedule, regardless of what kind of turmoil is going on in the market.
Over the past several years, investing in the best dividend-paying stocks has proved to be one the easiest and most powerful strategies to achieve solid returns from your investments. Unfortunately, wading through hundreds of companies can be a challenge for the beginner. So for those investors looking for decent income, here are the top dividend stocks to watch this month.
One Dividend Stock to Buy and Hold Forever
PepsiCo, Inc. (NYSE/PEP) is the ultimate dividend stock. If you had invested $100.00 in the global food and beverage company back in 1965, your investment would be worth nearly $43,000 today. For some perspective, a $100.00 investment in the broad-based S&P 500 Index would be worth only $10,000 today.
However, it’s the company’s dividend that gets me really excited. PepsiCo has paid distribution to shareholders every year since 1965. Over the past decade, the company returned more than $60.0 billion to shareholders in the form of share repurchases and dividends.
I wouldn’t expect that tradition to end any time soon. In 2015, PepsiCo is expected to distribute $8.5 to $9.0 billion to shareholders in dividends. If you were to include share buybacks, PepsiCo currently pays out a total shareholder yield of 5.9%.
Also Read: Top 3 Gold Dividend Stocks in 2015
Warren Buffett Owns this Classic Dividend Stock
The Procter & Gamble Company (NYSE/PG)
The Procter & Gamble Company (NYSE/PG) could hardly be described as an attractive stock pick. But what the company lacks in excitement it more than makes up for in profits.
The firm increased the dividend by seven percent—the 58th consecutive year that P&G’s dividend has been increased. Moreover, they returned $12.9 billion in cash to shareowners through $6.9 billion in dividends and $6.0 billion in share repurchases. The firm’s dividend yield was 3.1% in 2014, beating the S&P 500’s 2.2%.
Of course, I’m not the only one who loves the stock. Legendary investor Warren Buffett has been holding onto his stake in Procter & Gamble for years. If the company is good enough for the Oracle of Omaha, it’s good enough for me.
Better to Act Sooner than Later
Lowe’s Companies Inc. (NYSE/LOW)
Home improvement retailer Lowe’s Companies Inc. (NYSE/LOW) sells everything from lumber to kitchen appliances through a network of 1,850 big-box stores across North America. The company has been enjoying the recovery in the housing market as increased home prices spur homeowners to invest in projects again. (Source: Lowe’s, last accessed June 22, 2015.)
Lowe’s is a cash-flow machine. The company has also been taking advantage of the Do-It-Yourself (DIY) phenomenon, acting as a booking agent for installation services as well. Last year, the company’s diluted earnings per share increased 26.6% to $2.71.
Most of those profits are funneled right back to shareholders. Today, the company pays a quarterly dividend of $0.23 a share, a payout that has increased every year since 1961. I expect that record to continue for many years to come.