My analysis thus far has been focused mainly on dividend growth stocks. However, many older dividend investors are looking for cash in their pocket right now. Investors who are looking to supplement or even replace their current income are looking for dividend stocks that can give them a 4%+ yield on their investment. They want the increases as well, but they're more concerned with the larger dividend payment now as well as a safe, non-volatile investment. At some point I'll be in their shoes too. I won't be reinvesting my dividends forever, eventually I will be using those dividends as income.
In today's current economic environment, it's no wonder that dividend stocks have become a popular investment choice. CDs, savings accounts, and Treasury Bills are barely paying you anything back in interest. I can't understand why anyone would "invest" their money in one of these when they can't keep up with inflation. There are so many opportunities to invest in companies that have a proven record of paying dividends, and even increasing those dividends yearly.
Some people think investing money in stocks is risky because it's not insured by the government, but how much money are you "paying" to have your money insured? If a CD is giving 1% and a solid company with a long dividend history is yielding 5%, then you're paying a hefty premium for that safety net.
Consider the following stocks who have a strong dividend history, are yielding over 4%, and have a non-volatile beta score under 0.75.
WGL Holdings Inc. (NYSE:WGL)
Dividends Paid Since: 1852
Dividend Yield: 4.1%
AT&T, Inc. (NYSE:T)
Dividends Paid Since: 1881
Dividend Yield: 5.3%
Bristol-Myers Squibb Company (NYSE:BMY)
Dividends Paid Since: 1900
Dividend Yield: 4.1%
Altria Group Inc. (NYSE:MO)
Dividends Paid Since: 1928
Dividend Yield: 5.1%
Verizon Communications Inc. (NYSE:VZ)
Dividends Paid Since: 1984
Dividend Yield: 4.9%
Waste Management, Inc. (NYSE:WM)
Dividends Paid Since: 1986
Dividend Yield: 4.2%
Lockheed Martin Corporation (NYSE:LMT)
Dividends Paid Since: 1995
Dividend Yield: 4.6%
I am currently working on a Dividend Income Analysis template that is similar to my Dividend Growth Analysis. The new Income Analysis will focus on higher yielding (4% and up) stocks and the safety of its dividend. I hope my analysis will help people who are looking for higher paying alternatives than what their local banks have to offer.
Disclosure: I am long VZ.