Just a little over a year ago, I made the "no-brainer" decision to move from Seattle (where it rains often) to San Diego (where it seldom rains). Truthfully, it wasn't really a difficult move and I've been loving every minute of being back in the land of sunshine. However, with that said, sometimes life throws you a fastball.
Today it's raining miserably in San Diego, while the weather channel says Seattle is basking in endless amounts of sunlight. Oh, the irony! As I gaze out my second story apartment here in gloomy North County San Diego, my jacket and pants soaked from lack of planning, I can't help feel I should have been more prepared.
Luckily for me I'm not so disorganized in every aspect of my life. Take retirement investment, for example: I've scoured Wall Street for the most secure dividend-paying companies sporting the juiciest yields in order to safeguard my retirement. You can't start thinking about the power of compounding dividends too early in your career, you know what I mean? Here are five dividend stocks for the long-term investor:
Sysco Corporation (SYY) is a food service company, which distributes a wide range of food products. The company also provides non-food products, such as napkins, plates, cups and cleaning supplies. The primary customer of Sysco is of the restaurant, hospital, food, hotel, lodging and industrial-type. SYY is currently sporting a dividend yield of 3.8%, a payout ratio of 53% and a manageable debt burden. Sysco will likely continue to slowly grow its core business, increasing earnings, providing a stable dividend for years to come. I believe this is a good time to jump on board.
Kellogg Company (K) manufacturers ready-to-eat cereals and convenience food products in North America, Europe, Latin America, and the Asia Pacific. The Kellogg Company was founded in 1906 and has grown exponentially while impressively growing earnings over the last 100 years. Kellogg now sports a 3.4% dividend yield, a 49% payout ratio and also has a manageable debt load. Though K jumped significantly on news it will be purchasing the Pringles brand from Proctor & Gamble (PG), I believe it would be a good investment pending any future dips in share price.
Exxon Mobil Corporation (XOM) is the world's largest integrated oil company with annual revenue in the $450 billion range. XOM is sporting a 2.2% dividend yield, a payout ratio of only 22% and has an impressive $11 billion in cash on hand. Though most investors agree XOM should raise its dividend from where it currently stands, I don't see any reason why it won't be able to continue faithfully raising the dividend for many years to come. Long term, patient investors are rewarded by buying and holding XOM.
Exelon Corporation (EXC) is a Chicago, Illinois-based company, which operates as a utility services holding company and deals mainly with the generation of electricity for residents of the North Eastern United States. Exelon generates electricity from nuclear, fossil, hydroelectric and renewable energy sources such as solar and wind. It also caters to customers looking to buy natural gas at wholesale prices. EXC is currently sporting an attractive 5.4% yield, a payout ratio of 56% and a reasonable amount of debt, considering its line of business. EXC has been brutally beat down over the last month with fears of legislation changes, nuclear concerns, pension fears and pending issues with its merger with Constellation Energy (CEG). I believe it's trading at a deep discount and have been adding to my holdings on recent weakness.
Johnson & Johnson (JNJ) is engaged in research, development and manufacture of a wide range of products. Over the last few years, JNJ has taken on a bad reputation after a string of product recalls, but I believe this presents an attractive entry point for the long-term investor. JNJ is sporting a dividend yield of 3.5%, a payout ratio of 64% and about twice as much cash on hand than debt. This isn't a stock that will double in the near future, but I believe JNJ will provide patient investors with a rewarding future. I've been adding to my holdings on dips below $62 for the past few years now.
The five companies mentioned above will likely provide patient investors who hold on and faithfully collect dividends with long-term success. I look forward to holding these solid stocks and collecting their dividends for many years to come.