Investors love dividend stocks because they not only provide dependable income but also give investors a great opportunity for solid total return. Total return includes interest, capital gains, dividends and distributions realized over a given period. In other words, the total return on an investment or a portfolio includes both dividend income and stock appreciation.
The Magnificent 7, which make up 28% of the S&P 500, have accounted for almost 65% of the yearly returns for 2023. In addition, the combined weight of those companies is greater than any combined weight of the top seven companies in the venerable index since the late 1990s. Selling partial positions in these tech giants and moving to large cap dividend leaders makes sense, especially with the Federal Reserve likely closing in on the end of the rate hikes.
We screened our 24/7 Wall St. research database looking for companies in the S&P 500 that were rated Buy at major Wall Street firms and that also paid the highest dividends in the venerable index. In addition, we focused on five companies that are very timely stocks to own for the rest of 2023.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
The stocks are listed by dividend size.
Altria
This maker of tobacco products offers value investors a great entry point now as it has been hit as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.
In June, Altria purchased NJOY Holdings, which makes electronic cigarettes and vaping products, for a $2.75 billion consideration. Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer, which some feel is worth more than $10 billion and may be a segment of the company that could be sold. Given the public relations issues the company has faced this year, it could very well be on the chopping board.
The company has increased its dividend for 52 consecutive years and just announced another increase effective October 10, when the dividend moves to $0.98 per share from $0.94.
Shareholders now receive a 9.04% dividend. Jefferies has a $55 target on Altria stock, while the consensus target is $49.11. The stock closed on Wednesday at $43.04.
Verizon
This top telecommunications stock offers tremendous value at current levels. Verizon Communications Inc. (NYSE: VZ) is one of the largest U.S. telecom companies. It provides wireless and wireline service to retail, enterprise and wholesale customers.
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