dividend stocks

The Kiplinger Dividend 15 Is On a Roll

Our favorite stocks for dividend income are rebounding well after the 2018 correction.

The Kiplinger Dividend 15, our favorite stocks for dividend income, have bounced back nicely from the 2018 correction. The 15 stocks have an average dividend yield of 3.7%, compared with 2.0% for Standard & Poor’s 500-stock index. Since we last visited the Dividend 15 in our December issue, the stocks have returned an average 4.9%, while the S&P 500 eked out 1.0%. Our dividend darlings have slightly outperformed the S&P 500 for the past 12 months as well. (Prices and returns are as of February 15.)

It’s nice to beat the S&P 500, but the main reason to invest in any of the Kiplinger Dividend 15 is for a reliable income stream that will grow over time. All 15 stocks have raised their dividends over the past 12 months.

Among our stars, Realty Income is up 27.3% over the past four months and 47.2% over the past 12 months. The real estate investment trust is the landlord for Walgreens and 7-Eleven, among others. The soaring share price has pushed Realty Income’s yield below our 4% threshold for high-yield dividend stocks. This is a nice problem to have, but we’re keeping an eye on the payout to see if the yield climbs back above 4%. The company has raised its dividend 100 times since its listing on the New York Stock Exchange in 1994. It still sports a respectable yield of 3.9%.

Cleaning up. Procter & Gamble (PG) has gained 26.7% since we last checked in four months ago. The maker of Gillette razors and Tide detergent has trimmed its brands from 100 to 65 and kept a laser focus on costs. The company beat analysts’ sales and earnings expectations in its fiscal second quarter, which ended in December.

Our biggest loser was pharmaceutical giant AbbVie (ABBV), down 9.7% since mid October. The firm’s latest earnings report revealed soft international sales of Humira, its rheumatoid arthritis drug. But AbbVie has a strong pipeline of new drugs. And the shares now trade at nine times estimated earnings for the year ahead.

Lower oil prices have taken a toll on ExxonMobil (XOM), which is down 2.5% over the past four months. The firm tends to moderate the size of its dividend hikes when oil is under pressure—but it has raised its dividend for 36 years in a row, averaging about 6% annually.

We divide the Dividend 15 into three groups. Dividend stalwarts have raised their payouts each year for at least 20 years. There are no guarantees, but Walmart, for one, has raised its annual dividend from 5 cents a share in March 1974 to $2.12 per share today. Our dividend growth category includes companies that can continue to deliver generous dividend hikes, fueled by strong growth in sales and profits. Home Depot (HD) has beaten Wall Street’s earnings expectations for the past five years. High yields can be a danger sign if they result from a sinking stock price. But our four high-yielders have a long history of generous dividends and the cash flow to keep paying them.

Most Popular

Where's My Refund? How to Track Your Tax Refund Status
tax refunds

Where's My Refund? How to Track Your Tax Refund Status

If you're waiting for your tax refund, the IRS has an online tool that lets you track the status of your payment.
March 2, 2021
Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer
Coronavirus and Your Money

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer

The IRS has an online tool that lets you track the status of your stimulus checks.
February 19, 2021
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021

Recommended

Bonds: 10 Things You Need to Know
Investing for Income

Bonds: 10 Things You Need to Know

Bonds can be more complex than stocks, but it's not hard to become a knowledgeable fixed-income investor.
July 22, 2020
13 Dividend Stocks That Have Paid Investors for 100+ Years
stocks

13 Dividend Stocks That Have Paid Investors for 100+ Years

Here are 13 dividend stocks that each boast a rich history of uninterrupted payouts to shareholders that stretch back at least a century.
May 21, 2020
Stock Market Today 3/5/21: Tech Roller Coaster Leaves Investors Thrilled
Stock Market Today

Stock Market Today 3/5/21: Tech Roller Coaster Leaves Investors Thrilled

Stocks, especially tech, appeared poised for yet another bloodletting on Friday despite a stellar February jobs report. Then came the turn.
March 5, 2021
Stock Market Today 3/4/21: Crash? Not Today. But Stocks Still Feel Pain.
Stock Market Today

Stock Market Today 3/4/21: Crash? Not Today. But Stocks Still Feel Pain.

A small rise in weekly jobless claims and comments from Fed Chair Jerome Powell sparked a scare in stocks Thursday, though the losses could've been wo…
March 5, 2021