Though investors are aware all equities carry risk, many people crave the security of a large corporation. Individuals perceive that established giant businesses are less likely to completely fail, though they may, and that the management will concentrate on long-term existence and continued growth.
Additionally, many individuals are now seeking out higher yielding investments. Equities paying dividends are now back in favor for a variety of reasons, including that safe fixed income yields are now at or near all-time lows. Also, many of the larger companies that pay a dividend also tend to grow their dividends.
Most of the largest companies, especially those that also pay a dividend, are also mature businesses that provide well-defined goods and/or services. Their size and product proliferation usually provide greater security, often at the price of tremendous growth. Their size also can make them formidable competitors, usually in businesses with a high cost to enter and compete.
Below, I have listed those publicly traded companies headquartered in the United States that currently pay a dividend of at least 2.5 percent and that have a market capitalization of $100-175 Billion. I have provided each equity’s current annual yield, present quarterly dividend payout and its dividend growth rate based on the present quarter’s dividend compared to the same quarter 1 year and 5 years ago.
- Market Cap: $171 Billion
- Yield: 5.9%
- Quarterly Dividend: $0.43
- 1-Year Dividend Growth: 2.3%
- 5-Year Dividend Growth: 32.30%
- Market Cap: $161.6 Billion
- Yield: 3.9%
- Quarterly Dividend: $0.20
- 1-Year Dividend Growth: 11.11%
- 5-Year Dividend Growth: -16.66%
- Market Cap: $153.1 Billion
- Yield: 2.8%
- Quarterly Dividend: $0.47
- 1-Year Dividend Growth: 6.81%
- 5-Year Dividend Growth: 51.67%
Philip Morris International (PM)
- Market Cap: $131.3 Billion
- Yield: 4.07%
- Quarterly Dividend: $0.77
- 1-Year Dividend Growth: 20.3%
- 5-Year Dividend Growth: N/A*
JPMorgan Chase (JPM)
- Market Cap: $121.1 Billion
- Yield: 3.14%
- Quarterly Dividend: $0.25
- 1-Year Dividend Growth: 400%
- 5-Year Dividend Growth: -26.4%
- Market Cap: $118.2 Billion
- Yield: 3.6%
- Quarterly Dividend: $0.21
- 1-Year Dividend Growth: 33.33%
- 5-Year Dividend Growth: 110%
- Market Cap: $110.5 Billion
- Yield: 4.8%
- Quarterly Dividend: $0.42
- 1-Year Dividend Growth: 10.5%
- 5-Year Dividend Growth: 10.5%
- Market Cap: $109.8 Billion
- Yield: 5.2%
- Quarterly Dividend: $0.50
- 1-Year Dividend Growth: 2.56%
- 5-Year Dividend Growth: 23.45%
- Market Cap: $99.7 Billion
- Yield: 2.9%
- Quarterly Dividend: $0.70
- 1-Year Dividend Growth: 14.75%
- 5-Year Dividend Growth: 180%*
Please note that 5 years ago, McDonald’s paid an annual dividend and now pays quarterly dividends. The growth calculation compares the present quarter’s dividend to ¼ of the annual dividend from five years ago, which was one dollar. Additionally, Philip Morris International was split from the parent company in 2008, and so there is no 5-year comparison point for the dividend.
Most of the listed companies have grown their dividends over the last one and/or five years. In fact, the only listed companies that reduced their dividends compared to five years ago are PFE and JPM. Pfizer lowered its dividend largely due to the costs associated with the major acquisition of Wyeth and JPM lowered its dividend due to the financial meltdown. Both raised their dividends this year.
Many individuals may also appreciate that these companies are generally familiar. Most investors and even those that are new to investing are likely acquainted with several of these companies, if not all of them. This familiarity also makes it easier to understand the businesses, and also makes information on the companies more readily available and discussed.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives.