Sometimes you don't want to beat around the bush. You just want to know what the good companies are so you can plug them into your portfolio. However, it's not always that simple, because what's good for one investor or trader isn't always a slam-dunk for another.
In this piece, we'll take a look at some of the best sectors and companies you can sink your teeth into and never look back, especially if you're a long-term investor bent on growth.
Let's launch into it.
Which Sectors Offer Great Dividends?
Dividends are payments to investors, received from company earnings on quarterly, annual or semiannual basis. Every sector contains companies that offer dividends. Take a look at a few examples of sectors that offer strong dividends:
- Consumer discretionary: Goods and services that aren't essential but consumers want to buy them if they can, particularly during good economic times.
- Consumer staples: Goods and services that people can't live without, such as toilet paper, tobacco, food and beverages.
- Basic materials: Businesses that discover, develop and process raw materials such as mining and metal refining, chemical products and forestry products.
- Energy: Energy products refer to energy equipment and services as well as oil, gas and consumable fuels.
- Financials: The financials sector offers financial services to commercial and retail customers, including banks, investment companies, insurance companies and real estate firms.
- Health care and pharmaceuticals: Businesses that provide medical services, manufacture medical equipment or drugs, insurance and other types of items.
- Industrials: Industrials involves companies that make or sell machinery, equipment or supplies for construction and manufacturing.
- Utilities: Utilities concerns itself with the foreign, diversified, electric, gas and water industries.
There's more to dividends than simply sitting back and earning money. As an investor, you'll want to learn about several steps involved in dividends and certain dates, including the dividend declaration date, the record date, the ex-dividend date and the payment date. It could mean the difference between what you'll receive in dividends. Just missing the cutoff date means you won't put dividends in your pockets.
3 Titan Dividend Stocks to Consider
Obviously, so many stocks belong under the "best of all time" but we picked three to showcase, which, incidentally, landed under the consumer staples sector and health care. Who can argue with Procter & Gamble, Johnson & Johnson and Altria?
Headquartered in Cincinnati, Ohio, Procter & Gamble delivers consumer packaged goods in several categories, including beauty, grooming, health care, fabric and home care and baby, feminine and family care. It creates household staples like razors, laundry detergents, paper towels dozens and dozens of other products.
Organic sales grew more than 6% in 2021, core earnings per share zipped upward 11%, currency neutral core earnings per share were also up 11% and adjusted free cash flow productivity was a whopping 107%.
Core earnings per share grew 9% on average and various sectors in particular grew: home care, oral care, skin and personal care, grooming, fabric care, feminine care, hair care and personal health care.
Procter & Gamble has paid a growing dividend and announced a 10% increase, the 65th consecutive annual dividend increase and the 131st consecutive year in which Procter & Gamble has paid a dividend. Procter & Gamble paid $1.97 per share in fiscal 2011 and grew to $3.24 in fiscal year 2021.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, is the holding company for the company's research and development and manufacture of products in health care. It has the following segments: consumer health, pharmaceutical and medical devices. The company produces items in the following markets: baby care, oral care, beauty, over-the-counter pharmaceutical, women's health and wound care.
The company develops therapeutic solutions for immunology, infectious diseases, neuroscience, oncology, pulmonary hypertension, cardiovascular and metabolic diseases, orthopedics, surgery, cardiovascular and neurovascular conditions and eye health fields.
Johnson & Johnson saw 2021 Q4 sales of $24.8 billion, reflecting growth of 10.4%, operational sales growth of 11.6% and adjusted operational sales growth of 12.3%.
2021 full year sales were $93.8 billion, reflecting 3.6% growth, operational sales growth of 12.2% and adjusted operational sales growth of 12.8%.
Q4 EPS was of $1.77, which increased 172.3% and adjusted EPS of $2.13 increased 14.5%. Johnson & Johnson offers a quarterly dividend at $1.01 per share.
Warren Buffett once famously said about tobacco, "It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty."
Just like Pepsi fans would never consider indulging in any Coca-Cola product, cigarette smokers would never switch brands either. Altria can swiftly raise prices without losing many customers, so they do and earn more.
Altria Group Inc. operates as a holding company for the manufacture and sale of cigarettes under smokeable products, oral tobacco products and wine. It produces cigarettes, cigars and pipe tobacco as well as smokeless tobacco products like Copenhagen and Skoal and oral nicotine pouches sold by Helix. It also distributes Ste. Michelle Wine Estates Ltd and produces Washington State wines, primarily Chateau Ste. Michelle and 14 Hands. The company owns wineries from several other wine regions.
Altria paid dividends of $1.7 billion in the fourth quarter and $6.4 billion for the full year and maintains its long-term objective of a dividend payout ratio target of approximately 80% of its adjusted diluted EPS.
The company's net revenue of $5.086 billion beat estimates for $4.998 billion and it forecast earnings per share between $4.79 to $4.93 in 2022.
Final Thoughts
Did we pull an endless supply of dividend-paying stocks for this article? No! (We'd be writing for years.)
However, the fundamentals remain the same anytime you want to invest in dividend stocks. Look for companies that offer long-term expected earnings growth (look for earnings growth between 5% and 15%) strong cash flows, excellent leadership, low debt-to-equity ratios and industrial strength compared to competitors. That'll get you to where you want to be as a dividend investor.
Before you consider Procter & Gamble, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Procter & Gamble wasn't on the list.
While Procter & Gamble currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
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