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These 11 Stocks Spend the Most on Dividends
Investors want dividend stocks for their solid income, dependable returns, and relative stability in the face of an increasingly shaky stock market. With the S&P 500 (SNPINDEX: ^GSPC ) near record highs, the fact that dividend stocks can provide some ballast against overall market declines looks more attractive than ever.
But looking at raw dividend yield can mislead you into buying stocks that aren't as stable as you might think. As a better alternative, let's instead look at the 11 stalwart blue-chip companies that paid more than $5 billion in dividends to shareholders during 2012, according to figures from S&P Capital IQ.
|
Rank |
Company Name |
Amount Paid in Dividends |
|---|---|---|
|
1 |
AT&T (NYSE: T ) |
$10.24 billion |
|
2 |
ExxonMobil (NYSE: XOM ) |
$10.09 billion |
|
3 |
General Electric (NYSE: GE ) |
$7.19 billion |
|
4 |
Microsoft |
$6.97 billion |
|
5 |
Chevron (NYSE: CVX ) |
$6.84 billion |
|
6 |
Johnson & Johnson |
$6.61 billion |
|
7 |
Procter & Gamble (NYSE: PG ) |
$5.88 billion |
|
8 |
Philip Morris International |
$5.40 billion |
|
9 |
Wal-Mart (NYSE: WMT ) |
$5.36 billion |
|
10 |
Verizon (NYSE: VZ ) |
$5.23 billion |
|
11 |
Merck (NYSE: MRK ) |
$5.12 billion |
Source: S&P Capital IQ.
Looking at these 11 stocks, you can see some general trends. Certain
industries are better represented than others, as their business models
lend themselves more to generous dividend payouts than those of other
companies. Perhaps the most obvious example is the telecom industry,
in which both AT&T and Verizon have spent massive amounts of
capital building out their respective wireless networks. Yet despite
having to service extremely high levels of debt to repay what they
borrowed to build those networks, dependable monthly income from
millions of subscribers provides more than enough cash flow both to pay
interest and principal on their debt and to return capital to
shareholders. As long as their services remain in demand, Verizon and
AT&T should remain near the top of this list.Energy stocks ExxonMobil and Chevron also appear near the top of the list, and although the energy industry involves much different operational aspects from telecom, oil and gas companies have some of the same business-model characteristics. Finding reserves and drilling wells require substantial upfront capital investment, but once production begins, the profits are substantial enough to more than make up for the carrying cost of those upfront capital expenditures. Even with natural gas prices being far from ideal from a profitability standpoint, great conditions in the refining business have helped these integrated oil giants produce even more free cash flow to return to shareholders.
Get your share of dividends
If you want income from your investments today, dividend-paying stocks are your best bet. These stocks pay billions to their investors, and they're among the most solid prospects in the market. That's a powerful combination that you should consider closely for your portfolio.
If you're looking for some more long-term investing ideas with great dividends, you're invited to check out The Motley Fool's brand-new special report, "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so simply click here now and get your copy today.
end quote from:
http://www.fool.com/investing/general/2013/04/07/these-11-stocks-spend-the-most-on-dividends.aspx
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