Then there are dividend investors. Sure, they like watching the value of their stocks rise, but they also like getting free money every three months—money they can either cash or reinvest.
Dividend investing might not be as exciting as trying to find the latest tech stock that is about to soar, but that’s because dividend investing is a long-term sport for patient investors. Dividends are typically paid out by larger, well-established companies and have become increasingly popular in the current near-record-low interest rate environment.
After all, it’s easier to have your money work for you when you invest in a company that provides an annual dividend of four percent and has a long history of increasing its annual dividend than, say, putting your money in the bank or bonds, where the yields are virtually zero.
Dividends are typically by companies that make a lot of money, but don’t need all of the cash to fund growth. Instead of reinvesting all of their money into the company, they pay some of it out to shareholders.
If you’re looking at adding dividend growth stocks to your portfolio, pay particular attention to the price/book (P/B), price/earnings (P/E), return on equity (ROE), payout ratio, and levered free cash flow.
Also, look for stocks with a high barrier to entry. This prevents other companies from entering the fray and taking a bite out of profit margins, which keeps the company making money and the dividend yield safe.
Here are my top 10 stocks to buy and hold for the next decade...
Verizon -- Yield: 4.63%
Verizon (NYSE:VZ) employs 162,700 people, generates revenue of $131,620.00 million and has a net income of $18,375.00 million. The current market capitalization stands at $205.70 billion.Verizon’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $46,567.00 million. The EBITDA margin is 35.38% (the operating margin is 25.12% and the net profit margin 13.96%).
Financials: The total debt represents 44.94% of Verizon assets and the total debt in relation to the equity amounts to 667.94%. Due to the financial situation, a return on equity of 124.48% was realized by Verizon.
Twelve trailing months earnings per share reached a value of $3.54. Last fiscal year, Verizon paid $2.23 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.16, the P/S ratio is 1.55 and the P/B ratio is finally 12.37. The dividend yield amounts to 4.63%.
Stock Charts:
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| Long-Term Stock Price Chart of Verizon (VZ) |
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| Long-Term Dividend Payment History of Verizon (VZ) |
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| Long-Term Dividend Yield History of Verizon (VZ) |
Altria Group -- Yield: 3.94%
Altria Group (NYSE:MO) employs 8,800 people, generates revenue of $25,434.00 million and has a net income of $5,243.00 million. The current market capitalization stands at $123.14 billion.Altria Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8,873.00 million. The EBITDA margin is 34.89% (the operating margin is 31.98% and the net profit margin 20.61%).
Financials: The total debt represents 39.71% of Altria Group assets and the total debt in relation to the equity amounts to 448.58%. Due to the financial situation, a return on equity of 177.50% was realized by Altria Group.
Twelve trailing months earnings per share reached a value of $2.88. Last fiscal year, Altria Group paid $2.17 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 21.69, the P/S ratio is 4.76 and the P/B ratio is finally 42.19. The dividend yield amounts to 3.94%.
Stock Charts:
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| Long-Term Stock Price Chart of Altria Group (MO) |
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| Long-Term Dividend Payment History of Altria Group (MO) |
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| Long-Term Dividend Yield History of Altria Group (MO) |
Coca-Cola -- Yield: 3.37%
Coca-Cola (NYSE:KO) employs 123,200 people, generates revenue of $44,294.00 million and has a net income of $7,366.00 million. The current market capitalization stands at $180.67 billion.Coca-Cola’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $12,075.00 million. The EBITDA margin is 27.26% (the operating margin is 19.70% and the net profit margin 16.63%).
Financials: The total debt represents 49.02% of Coca-Cola assets and the total debt in relation to the equity amounts to 172.64%. Due to the financial situation, a return on equity of 26.31% was realized by Coca-Cola.
Twelve trailing months earnings per share reached a value of $1.74. Last fiscal year, Coca-Cola paid $1.32 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 23.96, the P/S ratio is 4.05 and the P/B ratio is finally 7.03. The dividend yield amounts to 3.37%.
Stock Charts:
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| Long-Term Stock Price Chart of Coca-Cola (KO) |
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| Long-Term Dividend Payment History of Coca-Cola (KO) |
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| Long-Term Dividend Yield History of Coca-Cola (KO) |
Cummins -- Yield: 3.21%
Cummins (NYSE:CMI) employs 55,200 people, generates revenue of $19,110.00 million and has a net income of $1,470.00 million. The current market capitalization stands at $21.22 billion.Cummins’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2,500.00 million. The EBITDA margin is 13.08% (the operating margin is 10.76% and the net profit margin 7.69%).
Financials: The total debt represents 10.83% of Cummins assets and the total debt in relation to the equity amounts to 22.13%. Due to the financial situation, a return on equity of 18.46% was realized by Cummins.
Twelve trailing months earnings per share reached a value of $7.33. Last fiscal year, Cummins paid $3.51 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.19, the P/S ratio is 1.13 and the P/B ratio is finally 3.02. The dividend yield amounts to 3.21%.
Stock Charts:
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| Long-Term Stock Price Chart of Cummins (CMI) |
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| Long-Term Dividend Payment History of Cummins (CMI) |
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| Long-Term Dividend Yield History of Cummins (CMI) |
General Mills -- Yield: 3.10%
General Mills (NYSE:GIS) employs 39,000 people, generates revenue of $16,563.10 million and has a net income of $1,648.40 million. The current market capitalization stands at $36.77 billion.General Mills’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,389.20 million. The EBITDA margin is 20.46% (the operating margin is 16.35% and the net profit margin 9.95%).
Financials: The total debt represents 38.83% of General Mills assets and the total debt in relation to the equity amounts to 171.01%. Due to the financial situation, a return on equity of 34.20% was realized by General Mills.
Twelve trailing months earnings per share reached a value of $2.75. Last fiscal year, General Mills paid $1.78 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.56, the P/S ratio is 2.21 and the P/B ratio is finally 7.50. The dividend yield amounts to 3.10%.
Stock Charts:
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| Long-Term Stock Price Chart of General Mills (GIS) |
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| Long-Term Dividend Payment History of General Mills (GIS) |
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| Long-Term Dividend Yield History of General Mills (GIS) |
Procter & Gamble -- Yield: 3.02%
Procter & Gamble (NYSE:PG) employs 105,000 people, generates revenue of $65,299.00 million and has a net income of $10,027.00 million. The current market capitalization stands at $236.03 billion.Procter & Gamble’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $17,439.00 million. The EBITDA margin is 26.71% (the operating margin is 20.58% and the net profit margin 15.36%).
Financials: The total debt represents 24.07% of Procter & Gamble assets and the total debt in relation to the equity amounts to 53.36%. Due to the financial situation, a return on equity of 16.45% was realized by Procter & Gamble.
Twelve trailing months earnings per share reached a value of $3.49. Last fiscal year, Procter & Gamble paid $2.66 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.34, the P/S ratio is 3.62 and the P/B ratio is finally 4.20. The dividend yield amounts to 3.02%.
Stock Charts:
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| Long-Term Stock Price Chart of Procter & Gamble (PG) |
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| Long-Term Dividend Payment History of Procter & Gamble (PG) |
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| Long-Term Dividend Yield History of Procter & Gamble (PG) |
Wal-Mart Stores -- Yield: 2.97%
Wal-Mart Stores (NYSE:WMT) employs 2,300,000 people, generates revenue of $482,130.00 million and has a net income of $15,080.00 million. The current market capitalization stands at $211.89 billion.Wal-Mart Stores’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $33,559.00 million. The EBITDA margin is 6.96% (the operating margin is 5.00% and the net profit margin 3.13%).
Financials: The total debt represents 25.07% of Wal-Mart Stores assets and the total debt in relation to the equity amounts to 62.12%. Due to the financial situation, a return on equity of 18.15% was realized by Wal-Mart Stores.
Twelve trailing months earnings per share reached a value of $4.65. Last fiscal year, Wal-Mart Stores paid $1.96 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.71, the P/S ratio is 0.43 and the P/B ratio is finally 2.65. The dividend yield amounts to 2.97%.
Stock Charts:
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| Long-Term Stock Price Chart of Wal-Mart Stores (WMT) |
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| Long-Term Dividend Payment History of Wal-Mart Stores (WMT) |
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| Long-Term Dividend Yield History of Wal-Mart Stores (WMT) |
ConocoPhillips -- Yield: 2.31%
ConocoPhillips (NYSE:COP) employs 15,400 people, generates revenue of $29,456.00 million and has a net income of $-4,371.00 million. The current market capitalization stands at $52.50 billion.ConocoPhillips’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,686.00 million. The EBITDA margin is 12.51% (the operating margin is -24.04% and the net profit margin -14.84%).
Financials: The total debt represents 25.52% of ConocoPhillips assets and the total debt in relation to the equity amounts to 62.57%. Due to the financial situation, a return on equity of -9.66% was realized by ConocoPhillips.
Twelve trailing months earnings per share reached a value of $-5.68. Last fiscal year, ConocoPhillips paid $2.94 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is not calculable, the P/S ratio is 1.82 and the P/B ratio is finally 1.35. The dividend yield amounts to 2.31%.
Stock Charts:
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| Long-Term Stock Price Chart of ConocoPhillips (COP) |
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| Long-Term Dividend Payment History of ConocoPhillips (COP) |
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| Long-Term Dividend Yield History of ConocoPhillips (COP) |
Nike -- Yield: 1.24%
Nike (NYSE:NKE) employs 70,700 people, generates revenue of $32,376.00 million and has a net income of $3,760.00 million. The current market capitalization stands at $87.15 billion.Nike’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5,164.00 million. The EBITDA margin is 15.95% (the operating margin is 13.91% and the net profit margin 11.61%).
Financials: The total debt represents 9.53% of Nike assets and the total debt in relation to the equity amounts to 16.63%. Due to the financial situation, a return on equity of 30.12% was realized by Nike.
Twelve trailing months earnings per share reached a value of $2.22. Last fiscal year, Nike paid $0.62 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 23.33, the P/S ratio is 2.69 and the P/B ratio is finally 7.11. The dividend yield amounts to 1.24%.
Stock Charts:
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| Long-Term Stock Price Chart of Nike (NKE) |
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| Long-Term Dividend Payment History of Nike (NKE) |
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| Long-Term Dividend Yield History of Nike (NKE) |
Costco Wholesale -- Yield: 1.19%
Costco Wholesale (NASDAQ:COST) employs 117,000 people, generates revenue of $118,719.00 million and has a net income of $2,376.00 million. The current market capitalization stands at $65.43 billion.Costco Wholesale’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,672.00 million. The EBITDA margin is 3.09% (the operating margin is 3.09% and the net profit margin 2.00%).
Financials: The total debt represents 15.56% of Costco Wholesale assets and the total debt in relation to the equity amounts to 42.73%. Due to the financial situation, a return on equity of 20.71% was realized by Costco Wholesale.
Twelve trailing months earnings per share reached a value of $5.33. Last fiscal year, Costco Wholesale paid $1.70 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 28.16, the P/S ratio is 0.56 and the P/B ratio is finally 5.47. The dividend yield amounts to 1.19%.
Stock Charts:
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| Long-Term Stock Price Chart of Costco Wholesale (COST) |
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| Long-Term Dividend Payment History of Costco Wholesale (COST) |
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| Long-Term Dividend Yield History of Costco Wholesale (COST) |