Stocks closed higher Tuesday as investors parsed the latest round of earnings and economic data. 

One of the day's most notable earnings reports came from Exxon Mobil (XOM), with the energy giant reporting record profits for all of 2022. And on the economic front, a welcome reading on inflation hit the newswires as the Federal Reserve kicked off its first policy meeting of 2023. 

Taking a closer look at XOM's earnings, the oil major said it brought in $12.9 billion in profit in the fourth quarter, bringing its full-year earnings to $55.7 billion. On a per-share basis, Q4 earnings of $3.09 fell short of the consensus estimate. Still, the energy stock rose 2.2% on the day.

Another big earnings mover on Tuesday was General Motors (GM), which jumped 8.3% after the carmaker said fourth-quarter earnings increased 57% year-over-year to $2.12 per share. Revenue was up 28.4% to $43.1 billion – easily beating analysts' expectations. 

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As for that economic data, the Labor Department this morning said its employment cost index (ECI), which measures labor costs, rose 1.0% in the fourth quarter. This was slower than the 1.2% rise seen in the third quarter and below what economists were expecting. "The move in the right direction will be welcomed by the Fed but it still remains elevated, and this won't do anything to change the Fed calculus in the near-term," says Michael Reinking, senior market strategist at the New York Stock Exchange. And that calculus, as the market is expecting, will be the Fed's announcement tomorrow afternoon of a 25 basis point (0.25%) interest rate hike. 

At the close, the Dow Jones Industrial Average was up 1.1% at 34,086, the S&P 500 was 1.5% higher at 4,076, and the Nasdaq Composite had added 1.7% to 11,584.  

The Closed-End Funds to Buy

The stock market ended January with impressive gains. The Dow rose 2.8%, the S&P 500 rallied 6.2%, and the Nasdaq surged 10.7%. "What had been expected as dip and rip this year may be playing out as rip and dip as the markets continue to advance due to evidence of declining inflation," says Phillip Toews, CEO of Toews Asset Management. However, with the market pricing in potential rate cuts later this year, "investors are assuming a best-case scenario, so risks are to the downside." In other words, the volatility we've seen in the stock market over the last 12 months could be far from over.

Investors have many ways to play defense against the ups and downs of this market, including embracing income-paying investments. The Dividend Aristocrats – widely considered Wall Street's best dividend stocks due to their decades of consistent payout growth – are a good place to find dependable income payers. Meanwhile, real estate investment trusts (REITs) and healthcare stocks are loaded with names sporting generous yields. As for investors looking to take a less well-worn path, they might want to check out the best closed-end funds (CEFs) too. These high-yield funds can significantly boost your income and allow you to buy the underlying stocks and bonds at a discount.

One might have expected a pause in equities after yesterday's widespread resurgence – after all, that has been stocks' M.O. throughout 2022's bear market. And that's exactly what we got after stocks reversed a morning slump, then let an afternoon rally slip away right before Wednesday's close.

Just like Tuesday, there was no definitive driver for today's action – just a market trying to determine what's next amid a Texas plain's worth of headwinds.

"This week is a relatively slow one for economic data," says Lauren Goodwin, economist and portfolio strategist at New York Life Investments, "but we expect market volatility to continue as investors wait for signs that inflation and interest rates will stabilize."

One of the most critical things on the mind of investors is the potential for a looming recession. Darrell L. Cronk, president of the Wells Fargo Investment Institute, fears we might already be there.

"The Atlanta Fed's GDPNow tracker, typically tilted toward optimistic readings, is signaling that U.S. gross domestic product (GDP) for the second quarter of 2022 is now tracking at 0%," he says. "Following a 1.5% contraction in the second estimate of first-quarter U.S. GDP, we are dangerously close to lacing together two consecutive quarters of GDP contraction, which translates into a technical recession, according the National Bureau of Economic Research."

Where the market was up, it was largely a push into yield-friendly defensive sectors. Real estate (+1.6%), healthcare (+1.4%) and utilities (+1.1%) were Wednesday's best performers.

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Energy stocks (-4.0%) such as Exxon Mobil (XOM, -4.0%) and Chevron (CVX, -4.4%) were pummeled, however; the aforementioned recessionary fears – not just domestically, but across the world – caused U.S. crude oil prices to fall by 3.0% to $106.19 per barrel.

The Dow Jones Industrial Average (-0.2% to 30,483), Nasdaq Composite (-0.2% to 11,053) and S&P 500 (-0.1% to 3,759) all finished the day with minimal losses.

Other news in the stock market today:

• The small-cap Russell 2000 slipped 0.2% to 1,690.
• Gold futures posted a marginal loss to end at $1,838.40 an ounce.
• Bitcoin took a considerable step back, dropping 3.7% to $20,111.62. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• Is Revlon (REV) the new meme stock? REV stock bottomed just above the $1 per share mark on June 13 – three days before the cosmetics company filed for Chapter 11 bankruptcy protection. But shares have since shot up more than 700% since then, including today's 34.3% pop that had the stock closing at $8.14. Many press reports point to similarities with Hertz Global (HTZ), which saw a major share-price surge after it filed for bankruptcy in May 2020. Heavily shorted REV stock – more than half of its float is sold short – has also caught the eye of Reddit users recently, a combination that sparked major volatility for GameStop (GME, -1.3%) shares back in early 2021.
• Altria (MO) tumbled 9.2% after a report in The Wall Street Journal suggested the Food and Drug Administration (FDA) is getting ready to order Juul Labs to remove its e-cigarettes from U.S. markets, with people familiar with the matter saying a decision could be delivered as early as Wednesday. MO has a 35% stake in Juul. Also weighing on tobacco stocks today was news that the Biden adminstration is preparing a plan that will propose eliminating nearly all nicotine in cigarettes – a move that could seriously curb revenue for the companies that make them. As such, MO stock was joined in negative territory by Philip Morris International (PM, -0.9%), Vector Group (VGR, -2.2%) and British American Tobacco (BTI, -1.3%).

Do You Have a Bear Market Strategy?

Counterintuitively, once the market actually jumps into bear-market territory is when investors might want to start adopting a slightly more optimistic point of view.

"Historically, when confidence was this low, the bear was close to expiring, and, looking ahead the next 12 months, it typically signifies a uniquely positive occasion for stock investors," Jim Paulsen, chief investment strategist at the Leuthold Group, recently said to Kiplinger Executive Editor Anne Kates Smith.

And indeed, she points out, corporate insiders have put their foot on the gas of late.

Nonetheless, how you tread from here largely depends on what you think is just around the bend. The more pessimistic among us might consider suiting up to battle the bear – and these 12 exchange-traded funds (ETFs) are designed to do just that, typically gaining (or at least losing less) in a broad downturn. However, our best stocks for the rest of the year – a group of 15 rebound candidates – are more suited for those with a persistent inner bull.

Either way, we recommend you mentally prepare yourself by reading our latest examination of how to invest intelligently while the bears are on the prowl.

A light-news Tuesday gave the stock market the breathing room it needed to mount an aggressive rebound rally.

Whether the rally is of the short-lived "relief" variety remains to be seen. Today's widespread bullish action came on the heels of a 5.8% drop in the S&P 500 last week – the second consecutive 5%-plus decline for the index, which is a rarity (more on that in a moment).

There wasn't much in the way of news that would otherwise justify a powerful move upward. Existing-home sales for May dropped by 3.4% month-over-month to a seasonally adjusted annual rate of 5.41 million, which was just a tick higher than estimates for 5.40 million. Year-over-year, existing-home sales were down 8.6% – a stark contrast to the 45.5% YoY jump in May 2021. Median home prices were $407,600 in May, up from $395,000 in April.

"Sales of higher priced homes are holding up, but sales of homes under $500,000 are falling as higher interest rates price more buyers out of the market," says Bill Adams, chief economist for Comerica Bank. "Higher income and wealth households have been less sensitive to the rise in rates so far, cushioning sales at the high end, but this segment will likely soften too with stocks in a bear market."

Tops on Tuesday were energy stocks (+5.2%), led by Exxon Mobil (XOM, +6.2%) and Diamondback Energy (FANG, +8.2%). U.S. crude oil futures improved by 1.0%, to $110.65 per barrel, after Exxon CEO Darren Woods said he expected three to five years of tight oil markets.

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Tesla (TSLA, +9.4%) – up by double-digits after CEO Elon Musk said the company's biggest hurdle wasn't competition, but supply-chain issues – also helped consumer discretionary stocks pull off a 2.9% return.

The Nasdaq Composite was out in front of a wide recovery, up 2.5% to 11.069. It was followed closely by the S&P 500 (+2.5% to 3,764) and Dow Jones Industrial Average (+2.2% to 30,530).

Other news in the stock market today:

• The small-cap Russell 2000 flew 1.7% higher to 1,694.
• Gold futures shed 0.1% to settle at $1,838.80 per ounce.
• Bitcoin had a whirlwind weekend, dipping below $18,000 at its nadir but recovering to $20,889.75, a 1.8% improvement from Friday afternoon's level. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• Palantir Technologies (PLTR) jumped 5.7% after BofA Securities analyst Mariana Perez Mora intiated coverage on the big data analytics stock with a Buy rating and a $13 price target, nearly 50% above today's close at $8.71. "We see Palantir as a beneficiary of rapidly growing demand for AI-platforms in both commercial and government end-markets," the analyst says. "Palantir's dominant position in the AI-powered software market, differentiated end-to-end & highly-secure solutions and first mover advantages should support more than 30% annual revenue expansion and improving profits in the midterm." Perez Moya also points to "increased urgency on modernizing military and intelligence capabilities," which she believes will create significant opportunity for PLTR stock.
• Spirit Airlines (SAVE, +7.9%) got a lift today after JetBlue Airways (JBLU, -1.6%) raised the buyout offer for its discount airline peer by $2 per share to $33.50 per share. The offer includes $1.50 per share too cover part of the breakup fee for Frontier Group Holdings' (ULCC, +1.6%) $2.9 billion bid for Spirit. JBLU also said it would be willing to commit to "significantly" more divestitures in order to gain regulatory approval. Spirit's board is expected to jdiscuss and vote on the competing bids at a shareholder meeting scheduled for next Thursday, June 30. "Spirit needs some near-term relief from its over indebtedness and overcommitted position on flight equipment purchases, in our view" says CFRA Research analyst Colin Scarola, who maintained a Hold rating on SAVE. "The JBLU offer won't provide that, but Frontier's can, in our view, making it likely Spirit shareholders opt for the Frontier offer. At any rate, Spirit shares remain extremely high risk, in our view."

Just How Long Will This Momentum Last?

So, about the market's big back-to-back weekly dips ...

Michael Reinking, senior market strategist for the New York Stock Exchange, said Friday that the S&P 500's second consecutive week of 5%-plus declines – along with a few other signals – pointed to the possibility of a "tactical bounce," and that bounce did indeed materialize today.

"The week is still young, so it is way too early to declare victory, but let's take a look at just how rare back-to-back 5% declines are and what the return profile looks like going forward," he said Monday.

Double-digit declines have happened only eight times since 1970 – including twice during the Great Financial Crisis and a three-week streak in 1987 that Reinking counts as two instances. The following week was up in 7 of 8 instances by an average of 2.6% (the lone exception was the day before Black Monday) … but what happens after that oversold bounce?

"Returns in the intermediate term are more mixed, with returns three months later only higher in 38% of instances," he says. "However, that improves over time, with the average return one year later [roughly] 28%, with a median return of 18.5%."

A long way of saying to bottle up today's energy – there's no guarantee it willl last.

It also means investors setting their portfolios up for the rest of the year must continue with a discriminating eye. As we near 2022's midway point, we're focused on the top opportunities for the coming year. We've recently explored potential targets in specific areas such as small caps and real estate investment trusts (REITs), but today we're widening our scope to the entire market.

Read on as we look at the 15 best stocks from across the market that look poised for a sharp rebound after a difficult first six months.

The managers behind the recently launched Engine No. 1 Transform Climate ETF (NETZ) focus on U.S. stocks that will drive the transition to decarbonize the economy. But they aren’t above working with polluters.

That’s part of their DNA.

Engine No. 1, the exchange-traded fund’s adviser, is a relative newcomer to environmental, social and governance (ESG) investing and advocacy. But last year, it helped to force the replacement of three members of Exxon Mobil’s (XOM) board with directors committed to addressing the company’s climate risks.

Transform Climate ETF will use a similar strategy of active engagement, working as a shareholder advocate to get companies to make their operations greener. But there’s a twist: This new ETF invests in the industries that are most in need of decarbonization, including agriculture, transportation and energy.

“You can’t solve a problem by running away from it,” says Engine No. 1’s head of ETFs, Yasmin Dahya Bilger. “Most climate strategies are built on the concept of divestment. They screen away bad actors, typically companies with the highest emissions. So ESG funds will often be underweight in oil and gas, auto, and agribusiness industries. Those three sectors alone represent 70% of greenhouse gas emissions.”

By investing in and engaging with companies in those sectors that have nevertheless set a clear path to decarbonizing their businesses, Engine No. 1 hopes to help the world move closer to net zero, when carbon emissions are balanced by absorption.

That said, you might be surprised by what’s inside the portfolio.

An Active, Activist Strategy

Among the fund’s 21 stocks are ESG standard-bearers First Solar (FSLR) and Tesla (TSLA). But the fund also holds several funds that are far from it, including General Motors (GM) and oil and gas giants Occidental Petroleum (OXY) and Shell (SHEL).

These firms bring fat wallets that can fund change in ways that pure-play startups often cannot, says Dahya Bilger. GM, for example, has pledged to invest $35 billion to sell 100% electric vehicles by 2035 and has made early investments in battery technology.

What’s more, some of these companies are greener than they seem. Shell wins a double-A rating from MSCI – the financial data firm’s second-highest sustainable grade – in part because it manages toxic waste better than peers.

Others are working hard to lessen their environmental impact. Occidental has been investing heavily in experimental climate-change-busting technologies, such as carbon capture, says Dahya Bilger. The company plans to break ground later this year on a facility that will suck carbon dioxide out of the atmosphere in the Permian Basin, the most productive oil field in the country. The carbon dioxide is then stored and some of it is put to use in other products, such as low-carbon fuels and building materials.

The fund’s unique approach skews it toward sectors that often get little play in other ESG funds. Industrials and materials, for instance, are the biggest sectors in Transform Climate ETF. By contrast, the top sectors in the typical U.S.-stock ESG fund are technology and financials.

That might make the fund appealing to investors as a complement to traditional ESG strategies.

It’s early days, but Transform Climate ETF has lost 0.9% since its early-February launch through May 6. That’s better than the 9.8% decline in the S&P 500 and the 11.3% average drop in the typical U.S. ESG stock fund.

The potential for the U.S. to slip into recession was the topic du jour Monday as stocks kicked off the week with a wobbly, uneven session.

Over the weekend, former Goldman Sachs chief Lloyd Blankfein told CBS' Face the Nation that recession was "a very, very high risk factor." That opinion was met by a number of other calls Monday morning.

Wells Fargo Investment Institute, for instance, says "our conviction is that the chances of an outright recession in 2022 remain low" but believes odds are growing that 2023 could see an economic contraction. UBS strategists say the chances are different depending on where you look – their global economists say "hard data" points to a sub-1% chance of recession over the next 12 months, but the yield curve implies 32% odds.

"There's no crystal ball to predict what's next, but historical trends can come into play here. With the [S&P 500] closing 15% below its weekly record, there's only been two times in the past 60-plus years that the market didn't fall into bear territory after a similar drop," adds Chris Larkin, Managing Director of Trading at E*Trade. "This doesn't mean it's bound to happen, but there is room for potential downside."

Larkin says to keep an eye on major retail earnings this week – which will kick off in earnest with Walmart's Tuesday report – to get a pulse check on the American consumer.

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Monday itself was a fairly quiet affair. Exxon Mobil (XOM, +2.4%) and Chevron (CVX, +3.1%) were among a number of plays from the energy sector (+2.7%) that popped after U.S. crude oil futures jumped another 3.4% to $114.20 per barrel.

Twitter (TWTR, -8.2%) shares dropped after Tesla (TSLA, -5.9%) CEO Elon Musk spent the weekend questioning how much of Twitter's traffic comes from bots. Wedbush analyst Daniel Ives said the move feels more like a "'dog ate the homework' excuse to bail on the Twitter deal or talk down a lower price." TWTR stock has now given up all its gains since Musk announced his stake in the social platform.

The major indexes finished an up-and-down session with mostly weak results. The Dow Jones Industrial Average managed to eke out a marginal gain to 32,223, but the S&P 500 declined 0.4% to 4,008, while the Nasdaq Composite retreated 1.2% to 11,662.

Also worth noting: Warren Buffett's Berkshire Hathaway will file its quarterly Form 13F soon. Check back here tonight as we examine what Buffett has been buying and selling.

Other news in the stock market today:

• The small-cap Russell 2000 closed out the session with a 0.5% dip to 1,783.
• Gold futures gained 0.3% to settle at $1,814 an ounce.
• Bitcoin was off 1.6% to $29,551.92 (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• JetBlue Airways (JBLU, -6.1%) ramped up its hostile takeover attempt of Spirit Airlines (SAVE, +13.5%) on Monday, urging SAVE shareholders to vote against a buyout offer from fellow low-cost air carrier Frontier Group Holdings (ULCC, +5.9%). JBLU last month offered to buy Spirit Airlines for $33 per share – a premium to the $21.50 per share ULCC offered in February – but SAVE's board of directors rejected the bid citing concerns over regulatory approval. JBLU followed up in early May with an "enhanced superior proposal," including paying a $200 million, or $1.80 per SAVE share, reverse break-up fee should regulators block the deal.
• Warby Parker (WRBY) fell 5.3% after the eyeglass maker reported a loss of 30 cents per share in its first quarter. This was much wider than the per-share loss of 3 cents the company reported in the year-ago period and missed the consensus estimate for breakeven on a per-share basis. Revenue of $153.2 million also fell short of analysts' expectations. WRBY did maintain its full-year revenue guidance of $650 million to $660 million. "We remain cautiously optimistic on shares as WRBY continues to show ability to grow the top line, open new stores, and is recession resistant as a lower cost option for non-discretionary spend," says CFRA Research analyst Zachary Warring (Buy). "We see the company leveraging SG&A to become profitable in the second half of 2022."

Check Out Europe's Dividend Royalty

If you're seeking out more stable opportunities amid an uncertain U.S. market … well, the rest of the world is admittedly looking pretty shaky, too. But that doesn't mean there aren't a few morsels worth a nibble.

BCA Research notes that while there's negative news around the globe, "European benchmarks already discount a significant portion of the negative news." And looking ahead, inflation there is expected to peak over the summer "as the commodity impulse is decelerating" – that should help stagflation fears recede and help European shares.

Graham Secker, Morgan Stanley's chief European and U.K. equity strategist, chimes in that his firm remains "overweight [European] stocks offering a high and secure dividend yield."

We've previously highlighted our favorite European dividend stocks, which on the whole tend to produce higher yields than their U.S. counterparts.

But we'd also like to shine the spotlight on Europe's twist on an American income club: the Dividend Aristocrats. The S&P Europe 350 Dividend Aristocrats have somewhat different qualifications than their U.S. brethren, but in general, they've proven their ability to provide stable and growing dividends over time.

Read on as we look at the European Dividend Aristocrats.

U.S. equities followed up last week's losses with a comeback in this week's opening session, but the day's biggest news was a deal cementing an M&A Monday for the ages.

Numerous global bourses finished lower earlier Monday amid worries about a COVID-19 breakout in China and fear that restrictions would weigh on global growth.

"Beijing is on 'high COVID alert," with three days of testing to begin in a central district of Beijing after 15 new cases came to light, which will impact 3 million people," says Jennifer Lee, senior economist for BMO Capital Markets. "Lockdowns are not planned, apparently, but let's see how these tests go and if there are any new cases."

U.S. crude oil futures, which end trading earlier than the stock markets, dropped 3.5% to a two-week low of $98.54 per barrel. That hampered shares of energy firms including Exxon Mobil (XOM, -3.4%) and Chevron (CVX, -2.2%).

However, after opening considerably in the red, stocks rebounded in the afternoon, led by the technology (+1.5%) and communication services (+1.4%) sectors. The Nasdaq Composite gained 1.3% to 13,004, the Dow Jones Industrial Average was up 0.7% to 34,049, and the S&P 500 finished 0.6% to 4,296.

Monday's most significant headline, however, was the juice behind the communication sector's move: a jump in Twitter (TWTR, +5.7%), which has agreed to Tesla (TSLA, -0.7%) CEO Elon Musk's buyout offer of $54.20 per share – a deal worth $44 billion.

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Prior to Monday, TWTR shares hadn't traded close to the offer price amid questions about how serious the offer was and how Musk would pay for the transaction. But recent reports that he had financing, as well as Monday reports that Twitter's board had warmed to – and, later in the day, accepted – Musk's overtures to take the social platform private sent shares up to a close of $51.70. (You can check out our report for more about Musk's deal for Twitter.)

While most social media companies didn't move much on what would be the world's biggest leveraged buyout ever, Digital World Acquisition Corp. (DWAC) – the company behind Donald Trump-backed Truth Social – plunged 12.9%.

Other news in the stock market today:

• The small-cap Russell 2000 improved by 0.7% to 1,954.
• Gold futures shed 2% to settle at $1,896 an ounce.
• Bitcoin also joined in the afternoon rally, advancing 2.0% to $40,278.53. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.
• Coca-Cola (KO) gained 1.1% after the soft drink maker reported first-quarter earnings of 64 cents per share on $10.5 billion in revenue, both figures higher than analysts were expecting. The company also reiterated its full-year forecast for revenue growth of 7% to 8% and earnings-per-share growth of 5% to 6%, even as Coca-Cola suspended operations in Russia. "We think KO's strong results reflect its brand power and ability to thrive in an inflationary environment, as top line improvement was entirely driven by price and mix," says CFRA Research analyst Garrett Nelson, who reiterated a Buy rating on the Dow Jones stock.
• Snowflake (SNOW) – another member of the Berkshire Hathaway equity portfolio – spiked 7.6% after Wolfe Research analyst Alex Zukin intiated coverage on the cloud-based data platform with an Outperform (Buy) rating and $250 price target, a roughly 34% premium to today's close. Zukin believes SNOW could be a major player in the cloud computing space alongside Microsoft (MSFT), Alphabet (GOOGL) and Amazon.com (AMZN), and he sees significant opportunity in replacing legacy data warehouse systems as more customers migrate to the cloud.

Is a Recession Coming? (And If So, Should You Do Anything?)

While the rest of us gawk at a major social platform falling under the control of the world's richest man, market strategists remain fixated on the economy. Linda Kitchens, director in wealth management at Aspiriant, is among those who sees a greater chance of the U.S. economy falling into recession.

"We think recession probabilities for the next 18-24 months are in the 25%-30% range, which is meaningfully higher than where we were at the end of 2021 (probably less than 10% chance of recession then)," she says. "Economically, things like slowing growth, increasingly higher inflation and elevated commodity prices are important things to watch."

But she warns about making any major moves in anticipation.

"While the likelihood of recession has certainly increased, it's important to remind investors to stay focused on having a long-term time horizon, remaining fully invested and avoiding any market timing. As has often been said, 'far more money has been lost by investors trying to anticipate a recession than lost in recessions themselves.'"

To that end, the best thing you can do is position yourself in investments built for the long haul. For some, that means large, blue-chip companies that have been deemed worthy enough for inclusion in the Dow Jones Industrial Average (and we rank all 30 of these mega-cap names here). For others, that means companies that have proven they can not only profit – but share those profits – for decades on end (like the Dividend Aristocrats).

And for still others, one of the best ways to keep calm and steady, regardless of what the economy throws our way, is to hand over the keys. Investors can do quite well by allowing seasoned fund managers who charge reasonable fees to manage the stocks and bonds they want to hold. That's the idea behind the Kip 25: our 25 favorite low-cost mutual funds.

Most investors tend to shy away from troubled companies because they can really weigh on returns. Activist investors, on the other hand, actively seek out underperforming businesses, acquiring big equity stakes in the anticipation of forcing changes that will improve the share price.

Activist investors target companies that are poorly managed, inefficient, overpaying for acquisitions or suffering from a slew of other maladies that detract from shareholder value. They then push actions that they believe will benefit stockholders such as business restructurings and spinoffs, share repurchases and dividend hikes.

And a new category of activist investor has also emerged in recent years: those primarily concerned about environmental, social and governance (ESG) issues. ESG activists successfully lobbied for seats on the board of Exxon Mobil (XOM) last year and are pushing Royal Dutch Shell (RDS.A) to spin off its renewable energy business.

Here are seven stocks on the radar of activist investors. Some of these companies are newly under siege, while others are in embroiled in proxy fights and still others are listening and make changes.

Just understand that while activist investor campaigns sometimes produce results that dramatically improve the share price, activist-targeted stocks should be approached with caution. According to a 2019 Harvard Law School report, just 17% of activist investor campaigns that year were successful; the vast majority of campaigns – 56% – either failed or were still in progress one year later.

Still, sometimes, an activist investor's involvement alone can be enough to drive at least short-term gains.

Data is as of Feb. 4. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

• Market value: $8.1 billion
• Dividend yield: N/A

Peloton Interactive (PTON, $24.60) became an instant success story during the early days of the pandemic when mandatory gym lockdowns caused demand for in-home fitness equipment to skyrocket.

During the latter part of 2020, PTON was delivering triple-digit sales growth and a roughly $170 share price. The company, which made its public debut just two years ago, makes digitally connected stationary bikes and treadmills. In addition, it has roughly 5.9 million members on its platform, which includes its Peloton digital app that streams live and on-demand fitness classes.

A series of setbacks over the past year have resulted in a roughly 84% 12-month share-price decline through Feb. 4 – as well as the company swinging from a net profit to a net loss.

Peloton's woes began last May when the company issued a voluntary recall of its treadmills due to reported injuries among users. In August, the company cut the price of its less-expensive bike by 20%. Shares fell again in December when a popular character on HBO Max's "Sex and the City" show was depicted dying of a heart attack after taking a Peloton spin class.

These troubles were only exacerbated in early 2022 amid headlines that PTON was temporarily halting production of its bikes and treadmills due to weak demand – though CEO John Foley denied the press reports.

Amid this turmoil, PTON caught the eye of investment firm Blackwells Capital. A late-January report in The Wall Street Journal indicated the activist investor has accumulated a stake of less than 5% in PTON and is calling on the company to fire its CEO and put the business up for sale. According to the WSJ, Blackwells believes Peloton would be a good acquisition for a larger technology company like Amazon (AMZN) or Apple (AAPL) that also have fitness products. (On Feb. 7, the stock spiked higher on unconfirmed reports the company has received buyout bids from several suitors, including Amazon.)

Despite these recent setbacks, there are still Wall Street firms that are believers in PTON stock. Stifel analyst Scott Devitt in January upgraded PTON to Buy from Hold, arguing that the recent selloff is overdone, especially considering Peloton is still expanding its subscriber base. Analysts from Needham, Loop Capital and BofA also recently reiterated their Buy ratings.

Consensus analyst estimates look for Peloton to deliver a per-share loss this fiscal year and next, making these shares best-suited for highly risk-tolerant investors.

• Market value: $132.7 billion
• Dividend yield: 4.0%

Consumer goods giant Unilever (UL, $51.40) hopes to increase profits by divesting struggling brands and expanding its foothold in higher-growth categories.

The company, which owns well-known brands like Dove soap, Hellmann's mayonnaise and Knorr's soups, expanded its wellness and supplement product lines in early 2021 via the purchase of leading holistic health product maker Onnit. In mid-November, Unilever agreed to sell its worldwide tea business, which includes brands like Lipton and TAZO.

More recently, Unilever faced backlash from investors in mid-January when it revealed it bid $68 billion for GlaxoSmithKline's (GSK) consumer products business – an offer GSK turned down. UL shares dropped more than 14% on the news.

However, shares bounced back amid reports hedge fund Trian Partners, led by prominent activist investor Nelson Peltz, has built a stake in Unilever. Peltz has prior experience with consumer goods companies, having been on the board of directors at Procter & Gamble (PG) and previously been a stakeholder in Mondelez (MDLZ).

While Trian Partners hasn't commented publicly on Unilever's business, Peltz met with the firm's CEO last September to discuss a Ben & Jerry's boycott after the ice cream brand refused to sell its products in the Israeli-occupied West Bank. Unilever is dodging this thorny issue by putting its ice cream brands, which also include Breyer's and Klondike, in a standalone unit.

On the heels of the activist investor news, Unilever disclosed plans to cut 15% its regional and divisional management roles, which the company says will help to trim costs and speed up decision-making. Unilever also says it will not increase its bid for the GlaxoSmithKline business.

This is likely good news to British fund manager Terry Smith, whose Fundsmith investment vehicle is Unilever's 13th largest stakeholder. Smith called the attempted acquisition a "near death experience" and called on Unilever to focus instead on improving its operating performance.

As for its financial performance, in its most recent earnings report, Unilever said sales were up 4.4% year-over-year through the first nine months of 2021, while earnings were up 1.7%. UL cautioned that rising inflation will impact results into next year, but said it will take "appropriate price action" to offset higher costs.

Analyst opinions on UL stock are mixed, though they have a slightly bullish tilt. Those in this camp cite the company's strong brands, operating leverage and generous dividend as reasons to invest in UL.

• Market value: $7.8 billion
• Dividend yield: 2.1%

Huntsman (HUN, $35.81) is a global manufacturer and marketer of specialty chemicals, which are produced by three business units and manufacturing operations in 30 countries.

Strong pent-up demand in 2021 coming out of the pandemic helped Huntsman deliver 51% sales growth and 97% adjusted EBITDA (earnings before interest, tax, depreciation and amortization) gains during the September quarter.

However, the company's long-term performance has been lackluster. Since going public 17 years ago, Huntsman's shares have risen only about 50%. In addition, recent sales and EBITDA gains are mainly due to price increases; volume grew only 2% year-over-year.

There's room for improvement to these operating results, says hedge fund Starboard Value. The activist investor recently acquired an 8% stake in Huntsman and declared plans to seek four seats on the company's board of directors.

"We invested in Huntsman because of the Company’s strong market positions, diverse product portfolios, innovative chemistries and difficult to replicate manufacturing footprint," Jeff Smith, managing member at Starboard, wrote in a letter to Huntsman CEO Peter Huntsman. "We firmly believe that with the right Board in place, Huntsman can be a best-in-class company in its industry and generate significant value for all shareholders."

In response to Starboard's comments, Huntsman said it was pursuing a potential sale of its slower-growing textile effects division, initiating a $1 billion share repurchase program and tying the majority of future executive compensation to performance goals. The company also highlighted shareholder value created last year via the $2 billion sale of its commodity chemical portfolio, which both sharpened its focus on higher-margin businesses and contributed to a total shareholder return that roughly doubled between 2017 and early 2022.

Jeffries analysts (Buy) think Huntsman is poised for "transformative" M&A activity over the next several years – which could help fend off activist investor attacks.

Deutsche Bank analyst David Begleiter, meanwhile, added HUN stock to its "Catalyst Call Buy" list in January and sees the company "pulling out all stops" to deliver great December quarter results and 2022 guidance ahead of its March shareholder meeting where HUN shareholders will vote on adding Starboard nominees to the board. Begleiter also expects Starboard to offer detailed recommendations that it believes will benefit all HUN shareholders before the March meeting.

HUN shares appear undervalued at the moment, trading at 10.3 times forward earnings, a nearly 30% discount to industry peers and roughly 30% below the company's five-year average.

• Market value: $8.3 billion
• Dividend yield: 1.7%

Kohl's (KSS, $59.68) operates 1,162 department stores across the U.S. Like many bricks-and-mortar retailers, Kohl's has struggled due to competition from online rivals. The company hopes to turn its business around by growing higher-margin active brands to 30% of sales, rolling out Sephora kiosks in 850 of its stores and stepping up investment in its e-commerce business, which is delivering steady double-digit sales gains.

KSS opened Sephora kiosks in 200 stores last year and grew active brands by 20%. These actions supported 16% sales gains during the September quarter and record adjusted earnings per share for the third quarter. The company also strengthened its financial position, ending the quarter with roughly as much cash as long-term debt ($1.9 billion) on its balance sheet. These strong results led to a 22% increase in full-year 2021 adjusted EPS guidance.

Despite improved results, Kohl's is under pressure from two activist investors – Engine Capital and Macellum Advisors. Engine Capital wants Kohl's to sell itself or spin off its e-commerce business. Macellum is pushing for the company to add board members with retail experience and/or to explore a potential sale of the business. Analysts value Kohl's real estate holdings at $6 billion-$7 billion, or nearly 80% of the company's market valuation.

A bidding war has attracted potential buyers. Acquisition company Acacia Research is offering $64 per share for KSS and private equity firm Sycamore Partners is reportedly willing to pay $65 – though the retailer turned down both bids in early February.

Credit Suisse analyst Michael Binetti estimates fair market value is closer to $70-$80 per share, which he derives by valuing Kohl's real estate at $6.5 billion and its operations at a 3 to 4 times EBITDA. Cowen analyst Oliver Chen, meanwhile, thinks Kohl's shares could fetch over $85 per share.

UBS analyst Jay Sole, on the other hand, thinks that rising inflation and interest rates, coupled with inventory buildup, will hurt the company's sales and margins this year. Sole cut his KSS rating to Sell in January.

Whatever the outcome, buyout speculation has been good for KSS investors, who have seen shares rise nearly 20% this year. Even with this surge, KSS remains cheap, trading at just 8.2 times forward earnings – a greater than 40% discount to retail peers and nearly 55% less than its five-year average.

• Market value: $41.7 billion
• Dividend yield: 2.0%

Sweden-based telecom Ericsson (ERIC, $12.44) is one of the world's largest providers of telecom equipment, infrastructure and services. The company also recently became the worldwide leader in 5G when its chief rival, China-based Huawei, was hit with sanctions by the Trump administration. Ericsson currently supplies telecom equipment to all three major U.S. carriers – AT&T (T), Verizon (VZ) and T-Mobile (TMUS).

In its fiscal 2021, Ericsson generated 4% year-over-year sales growth, 29% EPS gains and a 44% improvement to adjusted free cash flow. ERIC also announced plans to further increase EBIT margins by expanding its enterprise business via the acquisition of cloud communications firm Vonage, and developing a global network platform to capitalize on 5G rollouts.

Ericsson announced the $6.2-billion acquisition of Vonage (VG) in late 2021 and expects it to create $400 million of cross-selling synergies by 2025 and sees cost efficiencies emerging after the deal is closed sometime within the first half of this year. Ericsson also anticipates the acquisition will be accretive to adjusted EPS and free cash flow beginning in 2024.

In January, Ericsson came under attack from Swedish investment firm Cevian Capital, one of its top three shareholders. Cevian complains that Ericsson is not doing enough to improve its stock price and delivered a list of demands to the company that include divesting or spinning off its managed services business, reducing losses in digital services, and better articulating its goals and strategies for its enterprise business.

The activist investor also criticized the Vonage deal, questioning Ericsson's willingness to pay more than 50 times EV/EBIT, with EV standing for enterprise value, for Vonage when the company could repurchase ERIC stock at 8 times EBIT.

ERIC shares are up more than 14% year-to-date, but are still priced roughly 30% below peers and 77% lower than the stock's five-year average forward P/E.

• Market value: $30.0 billion
• Dividend yield: N/A

Dollar Tree (DLTR, $133.49) owns approximately 15,500 discount variety stores across the U.S. and Canada operates under its Dollar Tree, Family Dollar and Dollar Tree Canada brands. In a recent nod to inflation, Dollar Tree hiked the price point for most merchandise from $1.00 to $1.25.

The company's sales increased 4% year-over-year during the September quarter, fueled by 125 new store openings and 450 sites renovated in its combo store format, which puts Dollar Tree and Family Dollar brands under one roof. Same-store sales increased slightly by 0.6%, but earnings per share fell 30% due to higher-than-expected freight costs.

Activist investors are targeting Dollar Tree because of total returns that fall far short of its main competitor. Over the past five years, DLTR shares have risen roughly 70% compared to a nearly 200% gain for Dollar General (DG).

In November, hedge fund Mantle Ridge acquired a $1.8-billion stake in Dollar Tree and is pushing for aggressive changes that include replacing the company's entire 11-member board. The activist investor also wants to give a leadership role to former Dollar General former CEO Richard Dreiling. DLTR responded by offering to add Dreiling to its board, engage him as a consultant and give Mantle Ridge a role in re-shaping the board.

UBS analyst Michael Lasser thinks that this dispute between the two parties can be settled amicably and likes Dollar Tree's new plan to create $3 and $5 price points in its stores to attract shoppers.

DLTR shares have risen 18% since Mantle Ridge unveiled its equity stake in mid-November and don't look especially cheap at the moment. The stock is trading at 24 times forward earnings, which is a 32% premium to itss five-year average.

This is not Dollar Tree's first run-in with activist investors. The company was targeted by Starboard Value four years ago, which dropped its proxy fight after DLTR implemented some of its' recommendations.

• Market value: $12.7 billion
• Dividend yield: N/A

GoDaddy (GDDY, $76.45) was an early pioneer in the website hosting space, which helped the company double its revenues in the five years following its 2015 initial public offering (IPO). However, new cloud-based challengers like Shopify (SHOP) have recently emerged to capture market share, which is creating big challenges for GDDY.

GDDY hopes to recapture some of its mojo with new web-based tools for marketing, digital payment, website design and security. These new point-of-sale products helped GoDaddy boost revenues 14% year-over-year in the September quarter. While earnings per share declined, unlevered free cash flow grew 12% and the company is guiding for 16% free cash flow growth in 2021.

In late 2021, Wall Street learned GoDaddy was on the radar of hedge fund Starboard Value. Regulatory filings revealed the activist investor acquired a 6.5% stake in GDDY. Starboard Value hasn't yet disclosed its strategy for boosting returns, but has considerable expertise in this space, having taken Web.com Group private in a $2 billion deal four years ago and guided its subsequent merger into Symantec.

Jeffries analyst Brent Thill named GoDaddy a top value play in 2022 after learning of Starboard Value's involvement. Thill agrees with the hedge fund's assessment that GDDY is undervalued, and feels the company is not getting the recognition it deserves for its rising free cash flows. He has a Buy rating on the stock.

Investor interest in shares peaked in late December shortly after Starboard Value's stake was announced, but shares are down roughly 10% since then. GDDY stock is still valued much more richly than web-based peers, but is trading at a nearly 56% discount to its five-year forward P/E ratio.

The first day of February trading was a relative yawner as the three major indexes finished Tuesday with modest gains. But given that investors just suffered the worst month for stocks since the COVID bear market, they were likely grateful for a quiet, positive session.

If not, they received something a little more exciting in the form of an Alphabet (GOOGL, +1.7%) stock split.

Earlier Tuesday, the Institute for Supply Management announced that its January manufacturing index declined by 1.1 points to 57.6. (Readings over 50.0 indicate expansion.) That was in line with expectations and showed continuing growth in the manufacturing sector, albeit at a slower pace than in December.

"The composition of the report was soft, with a small increase in the employment component, but larger declines in the production and new orders components," says Goldman Sachs Economics Research.

The earnings calendar had a few events of note, too.

United Parcel Service (UPS, +14.1%) popped to an all-time high after easily topping the Street's quarterly earnings and revenue forecasts. The better-than-expected results reflected the ongoing surge in online shopping and CEO Carol Tome's efforts to increase profitability.

Meanwhile, Exxon Mobil (XOM, +6.4%) stock hit a level last seen in 2019. The energy major eclipsed fourth-quarter profit and sales expectations and said it would resume stock buybacks this quarter.

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The Dow Jones Industrial Average climbed 0.8% to 35,405, the Nasdaq Composite gained 0.8% to 14,346 and the S&P 500 was 0.7% better to 4,546.

After the bell, Google parent Alphabet surged another 7% or so after announcing a massive Q4 beat and an equally sizable stock split. GOOGL reported 32% year-over-year revenue growth to a record $75.3 billion to easily beat estimates of $72.3 billion. Meanwhile, earnings of $30.69 per share easily cleared consensus expectations for $27.34.

The company also said its board of directors had approved a 20-for-1 stock split on each share of Class A, Class B and Class C stock. Shareholders still must approve the measure. If passed, shareholders of record as of the July 1, 2022, close, would receive on July 15, 2022, a dividend of 19 additional shares of the same class of stock for each share they held.

Other news in the stock market today:

• The small-cap Russell 2000 enjoyed a 1.1% improvement to 2,050.
• U.S. crude oil futures eked out a marginal gain to settle at $88.20 per barrel.
• Gold futures rose 0.3% to finish at $1,801.50 an ounce.
• Bitcoin waffled back and forth for most of the day and finished up just 0.1% higher, to $38,527.63. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• AT&T (T) stock fell 4.2% today after the telecommunications firm said it will divest its WarnerMedia properties, which include HBO, CNN, TNT, TBS and Warner Bros. Studios, as part of its planned merger with Discovery (DISCA). The spinoff will give T shareholders 0.24 share for each share they currently own. AT&T also said it will slash its annual dividend, to $1.11 per share from $2.08 per share – a move that was widely expected and caused T to end its reign as an S&P 500 Dividend Aristocrat.
• Pitney Bowes (PBI) shares slumped 15.4% after the logistics company reported earnings. In its fourth quarter, PBI reported adjusted earnings of 6 cents per share, missing the consensus estimate for earnings of 11 cents per share. The firm also reported an 8.7% year-over-year decline in global e-commerce revenue, though total revenue of $983.7 million in revenue came in above analysts' average estimate for $691.6 million in sales.
• Cruise stocks were a bright spot on Wall Street today. Among the day's big winners were Carnival (CCL, +5.7%), Norwegian Cruise Line Holdings (NCLH, +3.7%) and Royal Caribbean Cruises (RCL, +4.4%).

The 'January Barometer' Bodes Poorly for Equities, But ...

January performance isn't the market indicator it used to be.

Ryan Detrick, chief market strategist for LPL Financial, recently examined the "January Barometer," first discussed in 1972 by Yale Hirsh of the Stock Trader's Almanac.

Traders sum it up like this: "As January goes, so goes the year."

Specifically, when the S&P 500 has closed January in the green, the index has finished up an average of 11.9% over the final 11 months, and higher 86% of the time. But when the S&P 500 finished January in the red, stocks rose just 2.7% on average in the final 11 months and were higher only 62% of the time.

The good news? "It is worth noting that the January Barometer has been broken lately," Detrick says. "In fact, nine of the past 10 times stocks were lower in January, the final 11 months were higher, with some huge gains in there."

The takeaway? Although hoary market sayings and historical indicators can be entertaining and occasionally useful, past performance – as always – is not indicative of future returns.

The wisest move most investors can make is to build a strong portfolio core tailored to their risk tolerances and goals. Vanguard is among a few fund providers that can help you prepare for just about any eventuality, for a song.

To that end, we've focused on handling 2022's specific challenges – inflation, rising interest rates – in our list of 2022's best Vanguard funds. These stock- and bond-funds are constructed to both benefit from and defend against many of this year's trends.

The Dow Jones Industrial Average surged into record territory Wednesday, as more dovish language from the Federal Reserve and good news on the COVID front drove an unambiguously positive tone on Wall Street.

In testimony before Congress, Fed Chair Jerome Powell said the central bank's focus remained on economic recovery, and isn't in a rush to let interest rates rise.

"Any of the market's (we think unjustified) fear of a taper tantrum are not within eyesight," says Rick Rieder, BlackRock's chief investment officer of Global Fixed Income, "as today's communication was clear that it is not time to communicate any change."

Also on Wednesday, the Food and Drug Administration said that Johnson & Johnson's (JNJ, +1.3%) COVID-19 vaccine was both safe and effective. So-called "recovery" plays screamed ahead: Royal Caribbean (RCL, +7.3%) hit one-year highs, while energy stocks such as Chevron (CVX, +3.7%) and Exxon Mobil (XOM, +3.0%) continued to rally.

The Dow, up 1.4% to a new high of 31,961, was led by Boeing (BA, +8.1%), which rebounded amid reports that recent issues with its 777 models involved Pratt & Whitney engines, not Boeing engineering. The aircraft maker also forecast strong Latin American demand.

Other action in the stock market today:

• The S&P 500 improved by 1.1% to 3,925, putting it within mere points of its all-time highs.
• The Nasdaq Composite closed 1.0% higher to 13,597.
• The small-cap Russell 2000 rebounded violently, jumping 2.4% to 2,284.
• GameStop (GME, +103.9%) shares were briefly halted after more than doubling by late afternoon in a quick surge on seemingly no news.
• Tesla (TSLA, +6.2%) shares rebounded from yesterday’s selloff, in part on data showing Ark Invest CEO and portfolio manager Cathie Wood’s funds bought more shares on the dip.
• U.S. crude oil futures rocketed 2.6% higher to $63.26 per barrel, a 13-week high.
• Gold futures dipped 0.4% to $1,797.90 per ounce.
• Bitcoin prices, at $47,140 on Tuesday, finished 3.3% higher to $48,712. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

Sit Back and Relax With the Pros

For many stock investors, Wednesday was a "mental health" day of sorts – no massive swings, just a nice, gentle updraft throughout the day.

It's the kind of calm more routinely enjoyed by investors who primarily "set it and forget it" with a portfolio of diversified funds.

That feeling is all the more enhanced when you're relying on skilled, seasoned managers to make the tough decisions – a trait shared by a pair of T. Rowe Price mutual funds (one equity, one bond) that have earned independent research firm CFRA's top five-star ratings. (Note: If you're a 401(k) investor, it's possible that your plan doesn't offer these options; that's OK, we've got your back with these widely available T. Rowe products.)

But whether it's T. Rowe Price, Vanguard, or even smaller, more specialized shops, adept active management can help you invest confidently and with a cooler head, regardless of the market's ups and downs. If you're curious about the best such funds the market has to offer, check out our latest iteration of the Kiplinger 25 – a list of our favorite low-cost, actively managed mutual funds.

Kyle Woodley was long BA and Bitcoin as of this writing.

Wall Street finally stuck to the same tune for more than one session at a time, in this case posting a second consecutive day of rip-roaring gains on Tuesday. That action was followed up by the sudden news that one of corporate America's most successful CEOs would be stepping down.

Despite the growing prevalence of more-contagious COVID-19 strains, hospitalizations and deaths are, for the moment, heading lower. Financial relief for the coronavirus-battered economy looks a little likelier too, as Sen. Joe Manchin (D-W.Va.) signaled support for an important step forward in approving a new relief package.

Strong earnings reports from United Parcel Service (UPS, +2.6%) and Exxon Mobil (XOM, +1.6%) also whipped up some optimism.

"Since multiple expansion – higher equity prices due to falling interest rates or rising liquidity – is unlikely to be an equity market driver this year, the 2021 bull thesis depends on earnings improvement to remain intact," says Lauren Goodwin, economist and portfolio strategist at New York Life Investments.

The Dow Jones Industrial Average (30,687) and Nasdaq Composite (13,612) each jumped 1.6%, while the S&P 500 enjoyed a robust gain of 1.4% to 3,826.

Investors in some of the "short squeeze" stocks espoused by the WallStreetBets Reddit community weren't so lucky. GameStop (GME) plunged a flat 60% after an 31% decline on Monday, AMC Entertainment (AMC) dropped 41.2% and BlackBerry (BB) lost 21.1%.

• The Russell 2000 jumped 1.2% to 2,151.
• Gold futures slid 1.9% to 1,833.40 per ounce.
• U.S. crude oil futures had another great day, improving by 2.3% to settle at $54.76 per barrel.
• Bitcoin prices, at $33,849 on Monday, popped by 5.9% to $35,842. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
• After the closing bell, Amazon.com (AMZN) announced that Jeff Bezos would step down as CEO, to be replaced by Amazon Web Services (AWS) chief Andy Jassy. Bezos will shift to the role of Executive Chair in the third quarter of 2021.

History Says 2021 Could Be a Slog

Third stimulus or not, earnings rebound or not, 2021 could still be tough. Vaccines might be on the way, but COVID is largely unchecked, unemployment remains high, and – despite all that – stocks as a whole are sitting at sky-high valuations.

History isn't on our side either.

Remember the old adage, "As goes January, so goes the year"? Ryan Detrick, chief market strategist for LPL Financial, points out there's some statistical validity to that.

"When the S&P 500 has been green in January, the index has been up 11.9% on average over the rest of the year (final 11 months) and higher 86% of the time," he says. "However, when that first month was red, stocks rose only 1.7% on average over the final 11 months and were higher barely 60% of the time."

In other words, investors might need more than just stocks that ebb and flow with the market's tide – they'll need companies postured for standout results. If you ask the pros, many will point you to these 25 stocks that they've endorsed with high confidence. That's admittedly a growth-centric group, and some of us prefer value and dividends.

Fortunately, the analyst community has no shortage of love for a number of high-yield names, too, including these 25 stocks that yield at least 3%.

Kyle Woodley was long AMZN and Bitcoin as of this writing.

The Dow Jones Industrial Average will lose its longest-standing component as part of the blue-chip index's biggest shakeup in years.

S&P Dow Jones Indices, the global index provider that oversees the Dow Jones Industrial Average, announced late Monday that the venerable index will replace three of its components as of the market open on Monday, Aug. 31.

The move was made in part to "diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy."

Joining the Dow will be:

• Customer relationship management specialist Salesforce.com (CRM)
• Biotech firm Amgen (AMGN)
• Industrial conglomerate Honeywell International (HON)

Leaving the DJIA will be:

• Big Pharma firm Pfizer (PFE), which joined the Dow in 2004
• Raytheon Technologies (RTX), one of the resulting companies from the Raytheon-United Technologies merger and subsequent spinoffs, which has been a part of the Dow in some form since 1939
• Integrated energy major Exxon Mobil (XOM), which joined the Dow Jones Industrial Average in 1928 and was the industrial average's longest-lasting component

The Dow has announced one-off changes over the past few years, such as Apple's (AAPL) replacement of AT&T (T) in 2015, and Walgreens Boots Alliance's (WBA) replacement of General Electric (GE) in 2018. But this is the largest multi-component swap since 2013, when Goldman Sachs (GS), Nike (NKE) and Visa (V) replaced Alcoa (AA), Bank of America (BAC) and Hewlett-Packard.

Apple's Part in the Dow's Reconstitution

Kiplinger previously pointed out that Apple's upcoming 4-for-1 stock split could have a negative effect on the Dow, and indeed, S&P Dow Jones Indices cited the split as its reason for taking action.

"The index changes were prompted by DJIA constituent Apple Inc.'s decision to split its stock 4:1, which will reduce the index's weight in the Global Industry Classification Standard (GICS) Information Technology sector," writes S&P Dow Jones Indices. "The announced changes help offset that reduction."

Remember: The Dow Jones Industrial Average is weighted by price, which means the higher the nominal share price, the more effect the stock has on the index's performance. This stands in contrast to the S&P 500 and many other major indices, which are weighted by market value – the more valuable the company, the higher its index weight.

Apple currently is the largest component of the Dow by virtue of its $500-plus share price, which is almost $200 per share more than the second-largest component, UnitedHealth Group (UNH). However, once AAPL shares start trading on a split-adjusted basis Aug. 31, that price will drop down to about $125 per share.

"Overall, the Apple split alone will reduce the weighting of information technology from 27.63%, down to 20.35%," says Howard Silverblatt, Senior Index Analyst for S&P Dow Jones Indices. "On an issue basis, Apple will decline to a 3.36% weighting from their pre-split 12.20% (a 72.48% reduction), as the reallocation will increase the weight of each of the other 29 issues by 10.07%."

In other words, despite being a nearly $2 trillion company, Apple will be relegated to the middle of the pack, as the 17th-largest holding, because of its share price. That forced S&P Dow Jones Indices to make some sort of change to better represent the American economy.

Tech Is King, Energy Is Sapped

Information technology has become the market's most dominant sector at more than 28% of the S&P 500. Apple's reduction in value prompted the Dow to add more weight to tech, which it did via Salesforce.com. CRM shares, at nearly $210 per share, will become the sixth-largest Dow component at roughly 5% of the industrial average's weight.

The Dow also addressed a need in health care, which is the second-largest sector at 14.2% of the S&P 500's weight. The DJIA added Amgen – the maker of Enbrel and Neulasta, which trades around $235 per share currently – in lieu of Pfizer, a massive pharmaceutical by market value, but the Dow's smallest component thanks to a roughly $39 share price.

Meanwhile, adding Honeywell (~$160 per share) gives the Dow a little more exposure to industrials than Raytheon Technology (~$62 per share).

But perhaps S&P Dow Jones Indices' most noteworthy move was cutting its exposure to the energy sector by booting Exxon Mobil, the Dow's longest-tenured component. That leaves Chevron (CVX) as the index's lone remaining energy holding.

Energy has dwindled in importance in recent years thanks to multiple commodity-price shocks and the resulting drops in its components' value. The sector, off 34% year-to-date as a sector, currently is the smallest slice of the S&P 500 pie at just 2.4%.

Still, while the Dow might paint a more accurate picture of the economy by dropping XOM, the index also loses a part of its rich history.

"Integrated oil and gas giant ExxonMobil has been a member of the Dow since Oct. 1, 1928, which is when the index was expanded from 20 components to 30 components," S&P Dow Jones Indices writes. "However, in the records of this historical event, Exxon's name is nowhere to be found: Back in 1928, the company was known as Standard Oil Co. of New Jersey. The company wasn't unveiled to the world as 'Exxon' until 1972, and it didn't become ExxonMobil until its megamerger with Mobil in 1999."

None of the members of the Kiplinger Dividend 15—the list of our favorite dividend-paying stocks—has cut or suspended its dividend this year. In most years, that wouldn’t be news. But in response to the pandemic, more than 60 firms in the S&P 500 index have battened down the financial hatches by slashing or eliminating their payout. The Dividend 15 yield 3.4%, on average, well above the 1.9% yield of the S&P 500 and the paltry 0.7% from 10-year Treasury notes. (Prices, returns, yields and other data are as of June 12.)

Stocks on our list, like the broad market, tumbled in February, then rallied mostly back. In 2020, our picks have lost 6.5%, on average, compared with a 5.0% loss in the S&P 500. But amid plummeting fuel demand and sagging oil prices, energy stocks in the S&P 500 have surrendered an average of 32% in 2020. Among our energy picks, Enterprise Products Partners (symbol EPD) lost 29.7% and ExxonMobil (XOM), 30.1%.

Enterprise Products Partners charges other energy firms to transport and store oil, natural gas and other petrochemicals using its network of pipelines and oil facilities. Slowdowns in exploration and pro­duction have dinged profits. But Enterprise enjoys a diverse array of high-quality clients and produces ample cash to fund its payout. The firm pays 66% of excess cash as a distribution, well below the 90% threshold that would be concerning for a master limited partnership, says Brian Bollinger, president of research firm Simply Safe Dividends. It stays on our list.

But Exxon comes off. Oil prices have come up from their April lows, but the recent per-barrel price of $36 is still a losing proposition for ExxonMobil, and Wall Street analysts expect it to lose more than a dollar per share in 2020. If oil prices stay low, Exxon will have to borrow money and sell assets to maintain its payout, which CEO Darren Woods says the firm is committed to doing. Exxon held its dividend steady in April—the month when the firm has historically hiked its payout. Whether Exxon continues its 37-year streak of raising the dividend or merely holds it steady, we’re concerned that a prolonged period of low oil prices could damage the firm’s balance sheet and diminish future spending on growth projects. Investors who hold the shares strictly for income need not sell, and we acknowledge Exxon’s juicy 7.4% yield. But the shares are no longer among our favorites given the uncertainty about energy prices.

Added to our lineup: McDonald’s (MCD price $189, yield 2.6%). The pandemic was hard on food-service firms, and the fast-food icon is likely to see steep declines in sales and earnings this year. But the firm looks positioned to outperform peers as the economy reopens, given the strength of its balance sheet and its ability to maintain customer demand during recessions because of its affordable meal offerings. Investors have long been able to rely on the Golden Arches for steadily increasing income, with McDonald’s having raised its payout every year since 1976.

The Dow Jones Industrial Average, conceived by Charles Dow in 1896 to serve as the market's benchmark, nowadays also serves as a can't-miss index for income investors. Especially if you're looking for dividend growth stocks.

The Dow consists of 30 large-cap U.S. businesses that are meant to reflect America's economy. Its constituents include many iconic companies, including Exxon Mobil (XOM) and Coca-Cola (KO). Impressively, all 30 stocks pay dividends.

Several of these companies can be found in Simply Safe Dividends' best high dividend stocks list. But high current yield isn't the only dividend metric you should look at. Dividend increases, for instance, can not only lead to higher yields later down the road, but also act as a signal helping you to identify companies with rising profits and a sturdy balance sheet.

Let's review nine of the best Dow Jones dividend growth stocks. These companies appear to be the best equipped to continue rewarding their shareholders with safe and fast-growing dividends for years to come.

Data is as of Feb. 10. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

• Market value: $1.4 trillion
• Dividend yield: 1.0%
• Apple (AAPL, $321.55) is the largest equity stake among Berkshire Hathaway's (BRK.B) dividend stocks, which Simply Safe Dividends has analyzed in detail.

Warren Buffett likes to own businesses that generate a lot of cash and have durability. With an iconic brand, an operating margin routinely north of 20% and a portfolio of loved hardware products and (increasingly) services, Apple is no exception. Indeed, Apple's dividend is becoming an increasingly important factor in owning the stock.

AAPL reinstated its payout in 2012 and has increased it each year since. The company's dividend has potential to grow at a double-digit rate thanks to the iPhone maker's low earnings payout ratio near 25%, fortress balance sheet with more than $200 billion in cash and marketable securities, and its fast-growing Services division.

This high-margin business consists of popular software services – such as iCloud, Apple Pay and the App Store – that are integrated into Apple's hardware products. Services accounted for about 18% of AAPL's total revenue in fiscal 2019, and that number is expected to keep climbing.

Given the capital-light nature of this business and its double-digit growth rate, Services has the potential to boost Apple's already substantial profits. That in turn puts Apple among the highest-potential dividend growth stocks.

• Market value: $262.5 billion
• Dividend yield: 2.3%
• Home Depot (HD, $240.61), whose roots date back to 1978, has grown to become the largest home improvement retailer in America with more than 2,200 stores across the U.S., Canada and Mexico.

Leveraging its size, Home Depot can afford to offer more than 1 million products between its indoor retail space and e-commerce business, making one-stop shopping easy, convenient and affordable for its customers.

While online shopping is disrupting many areas of brick-and-mortar retail, home improvement is not one of them. Morningstar senior equity analyst Jaime Katz even believes this industry is "one of the best insulated sectors from e-commerce threats," noting that many of its products are heavy and thus uneconomical to ship to individual consumers. Other goods require employees' specialized knowledge, too.

Home Depot has paid uninterrupted dividends for more than 30 years while recording 20%-plus annual dividend growth over the trailing five- and 20-year periods. With a healthy payout ratio near 50% and a track record of delivering double-digit earnings growth most years, this Dow stock's dividend has good potential to continue rising at a healthy clip in the years ahead.

• Market value: $160.6 billion
• Dividend yield: 2.4%
• McDonald's (MCD, $213.21) is the largest fast-food retailer in the world with more than 38,000 locations in more than 100 countries.

But rather than owning and operating all of its stores, McDonald's has franchised about 93% of its restaurants to independent businesspeople. Because franchisees pay for most of a restaurant's kitchen equipment, signs, seating and other expenses, McDonald's enjoys a capital-light business that generates excellent margins and cash flow.

Yes, McDonald's has to ensure customers receive a consistent experience from one location to the next. But otherwise, the fast-food giant sits back and collects high-margin rent payments and royalties based largely on a percentage of a restaurant's sales from its franchisees. In a way, it's the closest thing resembling a real estate operator among the Dow's best dividend growth stocks.

Not surprisingly, McDonald's shares many qualities with the most recession-proof dividend stocks reviewed by Simply Safe Dividends.

MCD last raised its dividend by 8% in September 2019, continuing its track record of raising its cash distribution each year since it began paying dividends in 1976. With a reasonable payout ratio near 60%, an investment-grade balance sheet and analysts' expectations calling for continued mid-single-digit growth in earnings per share (EPS), investors can likely expect a similar pace of dividend growth to continue.

• Market value: $456.5 billion
• Dividend yield: 0.6%

CFRA analyst Chris Kuiper sums up Visa's (V, $205.99) long-term thesis in one sentence:

"We believe investors underestimate the top-line growth potential for Visa given the world market where 85% of transactions are still done in cash."

As electronic payments continue taking market share, Kuiper believes Visa's revenue growth rate could escalate to nearly 15% annually over the next three to five years. The resulting profits would likely help the global payments firm easily continue its track record of growing its dividend by about 20% annually over the past half-decade.

"We see electronic payments increasingly driven by mobile, with Visa in a leadership position," he adds. "International is another major growth driver, and we note the acquisition of Visa Europe."

This Dow dividend stock's strong payout growth potential is further supported by its earnings payout ratio, which sits near a low level of 20%. The company also enjoys an AA investment-grade credit rating from Standard & Poor's.

Simply put, Visa's financial health is excellent, and its outlook for future growth remains just as bright.

• Market value: $218.9 billion
• Dividend yield: 2.9%

For many decades, drugmaker Merck's (MRK, $85.66) dividend hikes were nothing to boast about, averaging about 2% to 3% annually. But MRK has been among the more aggressive Dow dividend growth stocks of late; the company increased its dividend by 15% in October 2018, then announced an 11% hike in November 2019.

Merck's revenue declined steadily from 2011 through 2015 as its drug development efforts weren't enough to offset headwinds created by the patent cliff. After stagnating for several years, Merck's revenue climbed 5% in 2018. Growth continues to accelerate; the company just reported an 11% sales increase during 2019.

Morningstar director Damien Conover notes that new product launches have successfully warded off generic competition to offset losses from drugs losing exclusivity. Merck's Keytruda drug for cancer treatment is an especially important blockbuster opportunity with multibillion-dollar revenue potential.

MRK boasts an earnings payout ratio below 50% and an investment-grade balance sheet. Meanwhile, analysts expect mid-single digit EPS growth in 2020 (driven by Keytruda). Thus, Merck's dividend looks safe and appears to have healthy growth potential, especially compared to its historical pace.

Coupled with its above-average dividend yield, Merck could be an appealing candidate for retirees seeking to live off dividends – a concept explained by Simply Safe Dividends.

• Market value: $107.1 billion
• Dividend yield: 1.3%
• American Express (AXP, $132.24), another holding in Berkshire Hathaway's portfolio, was formed in 1850 and provides consumers and businesses with credit card and travel-related services.

While the credit card industry is rife with competition, American Express has long differentiated itself as one of the most valuable brands in the world by focusing on excellent customer service. In fact, the firm typically ranks No. 1 for customer satisfaction among credit card companies in the U.S. according to J.D. Power.

As a result, the firm has amassed more than 110 million cards in force, racking up over $1.2 trillion in worldwide billed business each year.

Merchants want to work with AmEx because of its large and premium-focused customer base, and American Express's customers want access to its attractive rewards, which are made possible by the higher discount revenue earned from merchants. This creates somewhat of a network effect to help the firm continue adding new cardholders with strong credit and above-average spending habits.

Coupled with management's financial conservatism, which earns the business an investment-grade credit rating from Standard & Poor's, American Express has managed to pay uninterrupted dividends since 1987 while growing its payout by about 10% annually in each of the past five years.

AXP management expects double-digit EPS growth to continue as card member spending, loans and fee-based products continue to expand. That suggests this Dow dividend growth stock can continue its pace of payout hikes.

• Market value: $284.0 billion
• Dividend yield: 2.0%

Incorporated in 1968, Intel's (INTC, $66.39) microprocessors power many of the world's computers and servers. While Intel's core personal computing market is very mature following growth in mobile devices, the company has branched into new growth areas such as artificial intelligence, electronics in cars and connected devices. Cloud computing also is bolstering demand for more data centers, which account for about half of Intel's revenue.

Morningstar analyst Abhinav Davuluri writes that the firm's above-average spending on R&D and capital expenditures have helped INTC better control its complex manufacturing process, resulting in chips that deliver better performance and greater cost efficiencies compared to rivals.

Overall, management believes the company's addressable market exceeds $300 billion. For context, Intel's annual revenue is about $70 billion, which suggests the chipmaker still has plenty of areas to grow into, and profitably.

Intel's potential among dividend growth stocks is notable, too. The company has paid uninterrupted dividends for more than two decades, compounding its payout by about 7% annually over the past five years.

Intel maintains an excellent A+ credit rating from Standard & Poor's, and its sub-30% payout ratio is at its lowest level in more than a decade. This should make mid- to high-single-digit annual dividend growth a realistic possibility for INTC investors in the years ahead.

• Market value: $155.8 billion
• Dividend yield: 1.0%
• Nike (NKE, $100.02) owns one of the most well-known brands in the world, driven by its more than $3.7 billion in annual spending on advertising and endorsement deals with popular athletes to enhance the connection its brands enjoy with consumers.

Combined with its continuous introduction of quality and innovative products, NKE enjoys solid pricing power and has established itself as the largest seller of athletic footwear and apparel in the world.

Despite its size, Nike's revenue has more than doubled since 2010, and its dividend has nearly quadrupled, compounding by more than 13% annually.

With about 60% of total revenues derived in international markets, many of which offer solid long-term growth prospects as the middle-class population grows in developing economies, Nike should have a long runway to continue expanding its business. Yes, the company has warned about the effects of the coronavirus outbreak in China, which made up 18% of revenues in its most recent quarter. But that appears to be no more than a short-term hiccup for now.

Nike's dividend has great growth potential, too. Analysts expect NKE to record double-digit EPS growth once again in 2020, and its payout ratio near 30% has plenty of room to expand as well. Investors can likely expect Nike to continue doling out dividend increases of around 10% annually.

• Market value: $1.4 trillion
• Dividend yield: 1.1%

The tech sector isn't known for its dividends, but Microsoft (MSFT, $188.70) is among the exceptions. The firm has delivered uninterrupted dividends since 2003, and its cash distribution has nearly quadrupled since 2010, including an 11% raise announced in September 2019.

Microsoft represents one of the more impressive corporate turnarounds of the past decade, going from declining revenue as late as fiscal 2016 to double-digit sales growth in its most recent year.

Argus analyst Joseph Bonner explains that CEO Satya Nadella successfully pivoted Microsoft toward commercial and cloud application businesses and is also benefiting from growing IT spending, especially for hybrid cloud solutions.

Bonner doesn't think the growth is done, either. He writes that MSFT can deliver about 11% to 12% EPS expansion in each of the next two years as it continues riding these trends. This makes it all the more likely that the company will keep up its double-digit dividend growth.

Also, very few dividend growth stocks are as financially strong as Microsoft, which earns a "Very Safe" Dividend Safety Score from Simply Safe Dividends.

Microsoft is just one of two companies that hold Standard & Poor's top credit rating of AAA; the other is Johnson & Johnson (JNJ). That means Microsoft's debt is literally rated better than that of the U.S. government. MSFT also boasts a healthy sub-40% payout ratio and its free cash flow margin is just shy of 30%.

This is a business with staying power, especially for long-term dividend growth investors.

Brian Bollinger was long AAPL, AXP, BA, INTC, MCD and V as of this writing.

Energy stocks have had a difficult 2018. Mostly flat performance through most of the year turned into a tailspin in October as oil prices plunged from above $75 per barrel to below $50. That in turn has pinched oil companies that rely on elevated commodity prices to drive larger profits.

The headwinds are clear. Demand has slowed to a crawl, and supplies have piled up despite production cuts from several nations. Fears about U.S.-China trade relations have weighed, as have worries about sanctions on Iran.

It’s no wonder why energy stocks have taken it on the chin.

But the skies are starting to clear as we head into 2019. OPEC and other nations are beginning to discuss additional output curbs, and with U.S. shale producers running at full capacity, there really isn’t much room for them to pick up any slack. The U.S. and China have made progress on trade talks, too, including a 90-day moratorium on increasing tariffs.

Investors diving into the sector still need to be choosy. A rebound in oil is far from a certainty, which means it’s necessary to put a premium on quality right now. Here, we look at the 10 best energy stocks to buy for 2019 – those that can best take advantage of the current energy environment.

Data is as of Dec. 3, 2018. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price.

• Market value: $340.8 billion
• Dividend yield: 4.1%

Most lists of energy stocks at any time include the biggest American player in the space: Exxon Mobil (XOM, $79.50). But Exxon hasn’t really felt like the king of late.

Believe it or not, Exxon is starting to fall behind some of its rivals in terms of reporting lower year-over-year production figures, and in terms of stock returns. That’s what makes the current oil-price environment so interesting for the integrated energy giant.

When oil prices crashed a few years ago, Exxon clamped down on capital expenses, reducing its capex by 25% to under $23 billion. It also ended its lucrative buyback program to preserve cash. The result of these moves was a clip in production; for instance, at the start of Q1 2018, total oil and gas production decreased 6% year-over-year. At the same time, rivals who kept the spigots going now have projects that are starting to gush.

But Exxon has a new plan. The energy major will push its capital spending from $24 billion in 2018 to $28 billion in 2019, and eventually get up to an average of about $30 billion between 2023 and 2025. Much of this will be focused on high-margin areas such as the Permian Basin or new prolific fields such as offshore operations in Guyana. Upside from the Permian already started to show up for Exxon in 2018, and Guyana should significantly improve its production within the company’s official target of five years.

Patient investors waiting for Exxon to realize its long-term potential will be paid a hefty 4% annually in dividends just to wait

• Market value: $230.1 billion
• Dividend yield: 3.8%
• Chevron (CVX, $118.94) is another Big Oil stock that has been thinking smaller of late. The oil rout of 2014-15 constricted the company’s cash flows and production figures, and ultimately led to questions about the company’s dividend. While CVX ultimately never cut it, Chevron did leave the quarterly dividend flat in 2015, only raised it 1 cent in 2016, then kept it flat again in 2017.

The foot-dragging was a necessity, as Chevron was being forced to lean heavily on asset sales and its balance sheet to fund capex spending and its dividend.

But now, Chevron’s benefitting from its lean-time strategy. Several big-name projects have come online to produce both crude oil and natural gas. Its Wheatstone and Gorgon liquefied natural gas (LNG) facilities are finally up and running, while several new fields in the Permian and in the Gulf are pumping out crude. In its Q3 report, Chevron announced a record quarterly production figure of 2.96 million barrels per day. This prompted an upgrade from Credit Suisse, which said CVX “continues to execute on its already superior growth outlook.”

Chevron is now pulling back on its capex spending to about $19 billion – down from the $25 billion to $30 billion it has spent over the past few years. That should pad the bottom line, giving the dividend a little more breathing room to grow.

• Market value: $53.5 billion
• Dividend yield: 4.4%
• Occidental Petroleum (OXY, $70.27) is a second-tier name in energy, but investors who pass it by on name recognition alone are losing out.

Occidental is considered a “mini-integrated” oil firm. It features plenty of up-, mid- and downstream assets, basically from wellhead to end user. It’s just not as huge as Exxon or Chevron, but neither is it a pure exploration-and-production player. It makes it more difficult for investors to evaluate.

But OXY could be a “Goldilocks” energy stock: not too big, not too small.

Occidental has long been a top producer in some low-cost regions. It owns 2.5 million net acres in the Permian Basin. Additionally, it has some major legacy assets in Qatar, Oman and the United Arab Emirates. This creates a very low-cost output profile that allows OXY to score big when oil prices rise. During its latest investor presentation, the company’s management should that its current cost structure should allow it cover CAPEX and increase its dividend with West Texas Intermediate oil – the primary American benchmark – at $50 per barrel.

On the flipside, Occidental’s refining assets focus more on chemical production rather than gasoline and fuels. Typically, chemicals and base-plastics have much higher margins than gas.

OXY has been able to generate five-year average free cash flows of around $1.2 billion, according to Morningstar data. This period includes the latest oil rout and shows that OXY’s mix of assets can keep it and investors afloat in most energy environments.

• Market value: $137.4 billion
• Dividend yield: 6.1%

The Deepwater Horizon and its aftermath hounded international integrated giant BP plc (BP, $40.35) and its stock for years. One of the worst oil spills in history resulted in billions of dollars in fines, fees, lawsuits and compensation. The total bill to date is just under $62 billion.

To pay that bill, BP cut spending, sold off billions of dollars’ worth of assets and created a script dividend program in which investors were able to receive payouts in additional shares rather than cash.

Finally, though, BP is starting to leave the Deepwater Horizon disaster behind. Once it makes a few final small settlement payments in 2019, it will be freed from the massive financial burden – just in time.

BP’s focus has necessarily been squeezing out as much profit per barrel as possible. The company earned $3.8 billion in its third quarter, for instance, more than doubling its profits from the year-ago period. That builds on two previous quarters of strong profits. Said CEO Bob Dudley, “We now have a base business that can balance itself at $49 a barrel.” That’s important considering the current environment in crude prices.

BP’s cash has now returned to levels where it can cover a real dividend, as well as expand its capex. That should propel the dividend stock in 2019.

• Market value: $62.0 billion
• Dividend yield: 0.9%
• EOG Resources (EOG, $103.31) was fracking before it was cool.

Years ago – as Enron Oil & Gas – EOG was one of the first movers into the “Big Three” shale fields: the Eagle Ford, Permian and Bakken. That allowed it to build out some of the largest, choicest drilling locations in each field. That first-mover status in turn has helped it realize great mechanics and efficiencies from its wells.

Thanks to EOG’s superior quality of reserves, the firm boasts one of the lowest breakeven costs in the business. According to its latest management presentation, EOG can still pull a 30% direct after-tax rate of return (ATROR) from WTI-benchmarked oil at $40 per barrel. It makes 100% when oil gets up to $60 per barrel.

EOG used the current energy-price malaise to secure roughly 65% of its future well costs today. EOG Resources COO Lloyd Helms said during the latest quarterly earnings call that the current negotiated structure for services provides the company with “a great deal of flexibility to adjust our activity level in 2019,” and that “by doing so, we expect to reduce total well cost again in 2019.” Helms predicts its drilling costs will fall another 5% next year.

And any dip in costs will only help the bottom line.

• Market value: $78.5 billion
• Dividend yield: 1.8%

Leading independent E&P company ConocoPhillips (COP, $66.18) has had to make several hard decisions over the past few years that are finally paying off.

Those hard decisions included a dividend cut in 2016. The 66% haircut to the payout, as well as capex cuts, have turned out to be godsend, however. Conoco was one of the first oil stocks to get “lean and mean,” focusing its now-lower capital spending on top shale fields and other promising plays. Shale fields such as Bakken, Eagle Ford, and Permian Basin have well mechanics with breakeven costs as low as $35 per barrel. Conoco quickly has become one of the top dogs in all three of those regions with more than 1.8 million total acres under its control.

This has helped the bottom line, with COP reporting a more-than-350% year-over-year surge in its most recent quarterly profits. The three aforementioned fields saw production jump by more than 48%.

As a result, COP has resumed buybacks and started growing its dividend once more. With its latest increase, Conoco’s payout has grown 22% since it was slashed in 2016. And ConocoPhillips can continue to function well in today’s low-price environment.

• Market value: $14.3 billion
• Dividend yield: 1.2%
• Marathon Oil (MRO, $16.69) once was an integrated giant that owned both production and refining assets. Just like Conoco, MRO sought to rid itself of those refining assets, which were slow-moving and money-losing at the time. But that spinoff seemed ill-timed; Marathon was left without any downstream assets that could have taken advantage of the lower oil prices from the 2014-15 crash.

Marathon didn’t have the size advantage Conoco did, however. As oil plunged, investors took shares to the woodshed. At one point, you could buy MRO shares for around the price of an Extra Value Meal. Fearing oil would stay lower for longer, Marathon cut its capex budget by more than 20% and reduced its dividend by more than three-quarters.

MRO pruned assets, too, including selling its Canadian oil sands holdings that, as CEO Lee Tillman put it, “represented about a third of our Company’s other operating and production expenses, yet only about 12 percent of our production volumes.” It instead focused its attention on the Permian, as well as the Bakken and Eagle Ford. Today, more than 70% of Marathon’s production comes from U.S. sources. These low-cost fields are allowing MRO to balance capex spending and dividends at just $50 per barrel of WTI crude.

Marathon offers a similar gains profile to COP in the current environment.

• Market value: $13.2 billion
• Dividend yield: 1.2%

If you haven’t heard of Devon Energy (DVN, $27.03), you’ll be glad to learn about it now.

Devon originally was a natural-gas-focused firm, which was fine until nat-gas prices – thanks to fracking’s efficiency – tanked hard in the late aughts. DVN shares were put on the backburner.

To counteract this, Devon management plowed into a variety of shale oil plays including the Eagle Ford, as well as Oklahoma’s “STACK” region, Delaware Basin and in the Rocky Mountains. It also sold natural gas assets. As a result, 63% of its production (as of the end of 2017) comes from crude oil and NGLs.

This has been a boon operationally. Devon recently reported a big profit beat and produced $807 million in operating cash flow during the quarter. This fully funded its drilling program with about $250 million left over.

DVN shares have chronically underperformed the rest of the sector, anyway. But Devon could be a sneaky play. The company has a $4 billion share repurchase program that should finish in early 2019 – a program that will reduce its outstanding common stock by about 20% in total.

• Market value: $27.6 billion
• Dividend yield: 2.0%

The current oil-price environment means Anadarko Petroleum (APC, $52.90) has a target on its back yet again.

If you were to take Exxon and break it apart, Anadarko would be the part that actually pulls out the oil – and it does so all over the world. So if you were an Exxon or a Chevron and needed expand your own production profile, you could move the needle by acquiring APC. Moreover, the recent rout in energy stocks has made Anadarko more affordable at less than $30 billion.

There are several other reasons to believe an energy giant might come to the table and eat. Anadarko has reduced its costs and increased its percentage of crude oil production thanks to shale. Its operations are so good that their breakeven points are in the $20- to $30-per-barrel range. Across all assets, APC sees incremental cash flows above $50 per barrel. And with Anadarko recently selling off its midstream assets, it looks more like a pure E&P player every day. That’s exactly what a company like Exxon might want.

Even if a buyout doesn’t happen, APC’s continued improvements have resulted in shrinking losses. Moreover, the company – which had to reduce its dividend from 27 cents quarterly to 5 cents in 2016 – restored it to 25 cents in 2018, and even raised it up to 30 cents.

• Market value: $2.8 billion
• Dividend yield: N/A
• Chesapeake Energy (CHK, $2.92) is the most aggressive play on this list, and in fact, you could call it a “lottery ticket” stock. In fact, at just less than $3 per share currently, it’s priced like one.

Chesapeake’s low price is a result of numerous missteps.

Chesapeake is one of the biggest shale drillers of natural gas in the U.S. But to gain its size, it binged on debt. At one point, it had more than $21 billion in IOUs to its name. That wrecked Chesapeake when natural gas and oil cratered in 2014-15. The firm went on an asset-selling spree to raise funds so it could still drill while reducing that huge burden. It did clip that net debt down to around $9.4 billion – not great considering its total shareholder equity is around $3.4 billion, but it is a marked improvement.

Cash is improving, too. Higher-margin oil now represents around 19% of production. That helped Chesapeake record more than $504 million in cash from operating activities last quarter. Continued moves into shale have management predicting that 30% of its production will come from oil in 2019.

CHK is improving. There’s still a lot of risk – most notably, that debt – but it has the potential to be one of the bigger-reward energy stocks to buy in 2019.

Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.B), likes to say that his ideal holding period is “forever.” But he never has been shy about dumping stocks that no longer hew to his high standards, even if they are some of the bluest of blue-chip stocks.

The Oracle of Omaha has famously held American Express (AXP), a member of the Dow Jones Industrial Average, since 1963. He added Coca-Cola (KO), another Dow stock, to Berkshire Hathaway’s portfolio in 1988 and has held tight ever since. But for every American Express and Coca-Cola, there many more just-as-famous blue chips that Buffett has banished from Berkshire’s portfolio.

Warren Buffett typically doesn’t like to say too much about the reasoning behind Berkshire Hathaway’s buying and selling of individual securities. And it’s not always clear who is acting on Berkshire Hathaway’s behalf because Buffett shares responsibility for the company’s portfolio with lieutenants Ted Weschler and Todd Combs.

One thing, however, is for sure: When Warren Buffett makes a mistake, he’s quick to rectify it. If a company flounders because of management missteps, the industry turns against it or Warren Buffett is just plain wrong in his reading of the economic cycle, he will not hesitate to cut and run, no matter how illustrious the name.

Here are 10 examples of Warren Buffett bailing out on some of the biggest blue-chip stocks.

Data is as of May 2, 2018. Click on ticker-symbol links in each slide for current share prices and more.

Buffett sold the last of Berkshire’s holdings in Deere & Company (DE, $134.75) in the first quarter of 2017. It was a stunningly fast about-face for the legendary value investor, who built up a 24.7 million-share stake in the tractor maker back only in 2014.

So what went wrong?

A global farm recession made Deere look like a beaten-down bargain when Buffett first came calling. After all, it seemed only a matter of time before the agricultural business cycle would turn around. Alas, global ag woes only deepened in the ensuing years and Deere’s stock plummeted.

When shares finally returned to 2014 levels, Buffett saw his chance to get out.

Warren Buffett dumped the last of Berkshire’s 41 million shares – worth about $3.7 billion at the time – in Exxon Mobil (XOM, $76.80) at the end of 2014.

At first blush, it might seem stunning that the great value investor would bail out of the nation’s biggest oil company and longtime member of the Dow Jones Industrial Average. But it’s not surprising at all when you recall what happened to oil prices four years ago. A barrel of benchmark Brent crude that fetched about $110 at the beginning of 2014 went for just $50 by year’s end. That crash in oil sent many smaller energy firms into bankruptcy, and crippled the stocks of even the largest, most financially solvent energy players.

Oil prices have recovered somewhat since, but Exxon’s stock hasn’t. Shares still are down 17% since the end of 2014.

Buffett sold Berkshire’s remaining 10.6 million-share stake in General Electric (GE, $14.18) in the second quarter of 2017, and no one was much surprised.

General Electric was never the same after the Great Recession. In response to tightening regulations, management was compelled to sell off the company’s sprawling financial operations – a powerful source of profits.

The company’s prospects significantly worsened over the past few years. In 2017, CEO Jeff Immelt stepped down amid increasing problems with General Electric’s operational performance. In fact, analysts even sounded the alarm on GE’s dividend, and sure enough, it halved it in November to free up capital. The General Electric that’s left is a sputtering industrial conglomerate, and investors aren’t quite sure what to make of its future.

Although not one to try and time the market, Buffett’s timing was nevertheless impeccable. GE’s stock is down 50% over the past year.

It was an affair so brief that it’s easy to forget Warren Buffett once had an interest in Intel (INTC, $52.31).

Berkshire Hathaway acquired almost 11.5 million shares in the chipmaker over the course of 2011, only to dump the entire stake in the first quarter of 2012. It was a profitable – if short-lived – investment, though it’s not clear whether it was made by Buffett or one of his lieutenants, Ted Weschler or Todd Combs.

But it sure was well-timed. Not long after Berkshire’s exit, shares in Intel went on to drop 30% over the course of six months. The company, which missed out on the shift to mobile computing, continues to grapple with declining sales of PCs.

After years of telling Berkshire shareholders that he didn’t really understand technology stocks, it was big news when Warren Buffett first bought about $10 billion worth of International Business Machines (IBM, $142.45) back in 2011.

He should have remained tech-averse.

By the end of 2016, Berkshire owned 81.2 million shares, amounting to 8.5% of the company’s outstanding stock. As of today, Berkshire holds just 2 million shares in Big Blue – a mere 0.2% stake in the tech giant that’s worth less than $300 million.

IBM is struggling to play catch up in the age of Big Data and cloud computing. Years of declining sales and a share price that’s off 30% over the past five years make the Dow stock a rare blown call for Buffett.

Warren Buffett’s interest in Johnson & Johnson (JNJ, $123.50) peaked more than a decade ago. Now, the diversified health-care giant represents nothing more than a token holding.

You can blame management missteps. J&J struggled with manufacturing problems and allegations of illegal marketing practices in 2010 and 2011. Buffett was critical of the company for those gaffes, as well as for using too much of its own stock in its 2011 acquisition of device-maker Synthes.

Disenchanted with Johnson & Johnson, Buffett dumped most of Berkshire’s stake in 2012. Back in 2007, Berkshire’s position in JNJ topped out at 64.3 million shares. Today, Berkshire’s stake comes to just 327,100 shares (~$40 million), which represents less than 0.01% of the company.

Berkshire Hathaway was a major shareholder in Gillette when Procter & Gamble (PG, $70.94) bought the razor company in 2005. Buffett called it a “dream deal,” as Berkshire came to own 100 million shares in the consumer products company.

However, his ardor for P&G soon faded. Procter & Gamble’s earnings and sales stagnated in the Great Recession and its aftermath as consumers opted for cheaper brands. Buffett took notice and gradually chipped away at Berkshire’s stake.

At the end of 2012, Berkshire held just 52.5 million PG shares. Less than two years later, Buffett would sell those shares back to Procter & Gamble for $4.7 billion in return for its Duracell battery business.

Today, Berkshire retains just 315,400 shares in P&G worth roughly $22 million, or about 0.01% of the consumer products company.

Give Warren Buffett credit for admitting when he’s screwed up.

His ill-fated bet on a British supermarket chain was a doozy. The Oracle of Omaha sure wasn’t clairvoyant in 2006, when he plunged Berkshire Hathaway into shares of Tesco (TSCDY, $9.56), the U.K.-based grocer and general merchandise retailer. Even a surprise profit warning couldn’t scare Buffett away from upping his stake in the troubled chain; at the end of 2012, Berkshire owned 415 million shares.

Buffett eventually sold the shares over the course of 2013 and 2014, as an accounting scandal engulfed Tesco. But the Oracle admitted that he moved much too slowly. In his 2014 shareholder letter, Buffett said his “thumb sucking” cost Berkshire an after-tax investment loss of $444 million.

Buffett’s favorite holding period might be “forever,” but that doesn’t mean he can’t run out of patience fast. Witness Berkshire Hathaway’s dalliance with Verizon (VZ, $47.75).

Buffett first bought a stake of 11 million shares in the telecommunications giant in the first quarter of 2014. By the end of 2016, he’d all but liquidated the position. Verizon’s stock underperformed the Standard & Poor’s 500-stock index during Berkshire’s tenure. Some observers concluded that Buffett simply lost patience with the lumbering telco amid escalating industry price wars.

Today, Berkshire holds a token 928 shares in VZ worth $44,000.

Warren Buffett first invested in Walmart (WMT, $86.34) in 2005 with a stake of more than 19 million shares. By 2012, Berkshire Hathaway held nearly 55 million shares in the world’s largest retailer.

But times change.

The rise of Amazon.com (AMZN) and e-commerce led Buffett to rethink the future of brick-and-mortar retail. After years of paring his investment in Walmart, Buffett dumped most of Berkshire’s remaining stake at the end of 2016.

Today, Buffett is full of praise for Amazon chief Jeff Bezos, and Berkshire’s WMT holdings are down to 1.4 million shares, or about 0.05% of the big-box chain.

The United States of America is one of the largest wealth creation machines in the history of the world. According to Credit Suisse, American stocks returned an inflation-adjusted annualized 6.5% between 1900 and 2014 – behind only Australia and South Africa, which lead all international stocks at 7.4% each. Go, ‘Merica!

But while American stocks have been the better long-term bet, they’re not always the best bargain. In fact, the U.S. market is priced to deliver subpar returns over the next decade, whereas many international stocks are downright cheap.

The cyclically adjusted price-to-earnings ratio (“CAPE”) is more than double its long-term average. And according to John Del Vecchio, co-manager of the AdvisorShares Ranger Equity Bear ETF (HDGE), “The median price/sales ratio on the S&P 500 is the highest it has ever been in history. We are three standard deviations above the average. You don’t need to be a math whiz to understand that this is a big deal.”

But while U.S. stocks are looking bubbly, investors can find bargains overseas.

“The U.S. market has been the best performing stock market in the world since the Great Financial Crisis, but that has led U.S. stocks into expensive territory,” says Meb Faber, chief investment officer of Cambria Investment Management. “The good news is that historically, U.S. vs. foreign stock outperformance is a coin flip in any given year. And with valuations abroad being much lower (particularly in emerging markets), we could see foreign stocks outperform over the next several years and even accelerate.”

Today, we’ll look at 10 solid international dividend stocks for investors looking to add foreign exposure to their portfolios. Investors will want to note that international taxes may apply, and that overseas stocks have much more varied payout schedules than the balanced quarterly routine of most U.S. companies. Still, even if Wall Street defies the laws of gravity and continues to outperform its international peers, these stocks will provide a steady stream of dividend income while we wait for market leadership to shift.

Data is as of Jan. 22, 2017. Yields represent the trailing 12-month yield, which is a standard measure for international stocks. Click on ticker-symbol links in each slide for current share prices and more.

• Dividend yield: 5.5%

British oil major BP (BP, $43.39) has been something of a pariah stock ever since the 2010 Deepwater Horizon Gulf of Mexico oil spill. On Jan. 16, BP announced it was taking another $1.7 billion hit to earnings because of the ongoing costs of the legal settlement. The total cost to BP for the disaster is now estimated to be about $65 billion, making it by far the most expensive disaster in history for a company.

But here’s the thing: All of this was priced into the stock years ago. Sure, a bad headline like this can move prices for a day or two. But this is a major integrated oil major trading at a price-to-sales ratio of 0.6. To put that in perspective, rival Exxon Mobil (XOM) trades at a ratio of 1.7 – nearly three times higher.

BP also yields a very attractive 5.5%. And as crude oil prices continue to normalize and as the company’s legal liabilities get resolved, BP may reward its patient investors by raising its dividend.

This oil giant is not completely without risks, of course. Energy prices have been punishingly volatile over the past three years, and BP is more aggressively leveraged than its oil-major peers. But if you like a good turnaround story, BP is the stock for you.

• Dividend yield: 4.7%

Along the same lines, French integrated oil major Total SA (TOT, $58.96) is an attractive play.

You don’t hear much about Total on this side of the Atlantic, but it is one of the world’s largest oil and gas company. As a fully integrated oil major, the company operates through three segments: Upstream (exploration and production), Refining & Chemicals, and Marketing & Services.

Total currently is exploring or producing in more than 50 countries worldwide, and its sprawling Refining & Chemicals segment makes an assortment of petrochemicals and polymer derivatives such as polyethylene and polypropylene. The company also operates approximately 16,000 service stations.

Energy companies tend to be big dividend payers, and Total is no exception. The stock offers a yield of 4.7% and has managed to continue growing its payout despite a very difficult pricing environment for oil and gas. Total has improved or maintained its dividend every year since 1982.

France isn’t always the most business-friendly locale, which is one of the reasons TOT often trades at a slight discount to its supermajor peers in other countries. But if you believe that European stocks are likely to outperform their American counterparts over the next few years, Total gives you the opportunity to collect a market-beating dividend while you wait.

• Dividend yield: 2.7%

Most readers have probably never heard of ABB (ABB, $27.99), but this part-Swedish, part-Swiss company has a presence in more than 50 countries and builds a lot of the “guts” that make the modern economy function. ABB builds power grid systems and assorted robotics and automation systems, among things.

This is no “old economy” relic. Robotics and automation are thought to be among the most potentially explosive market drivers of the next few years. ABB also is very active in building electric vehicle charging stations as well as equipment to harness solar, wind and other alternative energies. If you believe in a greener future, ABB will be a big part of that.

As you might expect for an electrical infrastructure company, ABB gets a large share of its revenues from the developing world. Emerging markets made up 46% of revenues in 2016, the most recent annual data available. So, in ABB, you get a nice combination of mature European management and attractive emerging-market growth.

ABB delivers a current dividend of 2.7%, and has steadily grown the payout despite a very tumultuous couple of years in most of the developing world. From 2013-17 – a period in which most EM economies struggled – ABB raised its dividend by about 9%.

As growth returns to the developing world, ABB’s electrical infrastructure will be more important than ever. This is a stock you should be able to buy, hold and forget about for the next decade.

• Dividend yield: 2.7%

Few companies in the world boast products as ubiquitous as those of Anglo-Dutch consumer staples company Unilever (UL, $57.03). Its empire includes personal care brands such as Axe, Dove and Vasoline, and food and drink brands such as Lipton iced tea, Hellmann’s mayonnaise and Ben & Jerry’s ice cream, among many, many others.

There really is only one consumer brands company in the world that matches Unilever’s name recognition and sheer breadth of product lines, and that is America’s Procter & Gamble (PG).

Unilever has one major advantage over its American rival. Due in part to old colonial connections and to forward thinking by generations of management, Unilever has a massive presence in emerging markets. EMs account for fully 57% of Unilever’s business, and that figure will only get bigger with time.

UL offers a current dividend of 3.1%, and the company has a long history of raising its payout. Since moving to a quarterly payment schedule in late 2009, Unilever has hiked its dividend by 88%.

Don’t expect much growth for Unilever from developed markets like the United States or Europe. Realistically, growth in these markets depends on population growth – it’s not like we go out and buy more canned soup or body wash with our bonuses. But in emerging markets, there still is significant room for growth as millions of consumers enter the ranks of the global middle class and buy branded products for the first time. Unilever will be there to serve them.

• Dividend yield: 5.0%

Britain’s National Grid (NGG, $57.18) is a mainstay in many international dividend ETFs and funds. It’s easy enough to understand why. As one of the largest electricity and gas companies in the United Kingdom and United States, it’s considered a stable and reliable dividend machine.

Utilities might not be the most glamorous sector, but they have incredible barriers to entry. National Grid owns and operates 7,200 kilometers of power lines, 1,500 kilometers of underground cable and 7,660 kilometers of high-pressure gas pipelines, among many other assets, in the U.K. alone. It would be cost-prohibitive and impractical for any would-be competitor to try to replicate that.

It’s not all sunshine and roses for the utilities sector, of course. As a highly regulated sector, utility companies generally are at the mercy of their respective governments. Furthermore, the push to integrate solar and other renewable energy sources is a large, open-ended risk to the traditional model.

That said, the bad news would seem to be priced in. At current prices, National Grid is trading near five-year lows and yields a very respectable 5%.

You won’t get rich buying National Grid, but it’s worth considering as an income-generating workhorse.

• Dividend yield: 2.7%

If you consider yourself a contrarian value investor, it’s hard not to like the auto industry right now. Globally, it’s one of the few remaining industries that can credibly be called “cheap.” In a market that has favored technology and growth plays, the staid, old-economy automaking industry hasn’t exactly stirred the animal spirits.

But it should.

While Tesla Motors (TSLA) steals all the headlines these days, traditional automakers also are quickly rolling out electric and driverless prototypes. And unlike Tesla, they already have the infrastructure in place to mass-produce them and bring them to market.

One foreign automaker worth your attention is Japanese giant Toyota (TM, $139.40), the maker of the namesake Toyota brand and the Lexus luxury brand. Toyota is in a three-horse race with rivals Volkswagen (VLKAY) and the Renault-Nissan-Mitsubishi alliance to be the world’s largest automaker.

TM currently trades for about 11 times earnings, which is on the lower end of its historical range, and it pays a respectable 2.7% dividend. Toyota manages this dividend conservatively, too, with a policy of paying out about 30% of profits as dividends. But this hasn’t stopped the company more than doubling its distribution since 2013.

We are on the cusp of a golden age of innovation in the auto industry. Buying a proven winner like Toyota only makes sense.

• Dividend yield: 4.5%

Any story about dividend stocks naturally will include some allocation to the telecommunications sector. Along with utilities and real estate investment trusts (REITs), telecoms are some of the most reliable dividend payers in the world. A smartphone with a data plan is all but a necessity for modern living, so it makes sense to stuff a dividend portfolio with companies that provide this vital service.

This brings me to Spanish telecom giant Telefonica (TEF, $10.28), which is roughly comparable to an AT&T (T) or Verizon (VZ). The company provides mobile phone service, home and business internet service and paid TV, with a presence in 48 countries and full operations in 17, primarily in Europe and Latin America.

Telefonica’s presence in Europe is not especially compelling to me. Like the United States, Europe is a mature market in which virtually the entire population already owns a smartphone and has home internet access. But the company’s exposure to Latin America is a very different story. Brazil and broader Latin America collectively make up 45% of Telefonica’s revenues, and that figure will only grow with time.

Mobile phone penetration is already quite high in Latin America. For example, one recent estimate put Brazil’s smartphone penetration rate at 138%, above the world average of 115%. That doesn’t mean there isn’t substantial room for growth. Many working-class Latin American consumers have prepaid or entry-level data plans for basic messaging or browsing. But as incomes continue to rise in the region, you can bet they will upgrade to faster and more comprehensive plans for media streaming and other features. Telefonica will be there to provide it.

• Dividend yield: 5.5%

Along the same lines, China Mobile Limited (CHL, $51.97) is a worthy contender for an international dividend portfolio. China Mobile is the world’s largest mobile telecom company both by market capitalization and by number of subscribers. The company sports a market cap of $212 billion and has nearly 900 million current subscribers.

Like many emerging-market stocks, China Mobile has had a difficult time getting any traction in recent years. Its U.S.-traded ADRs have hardly budged in five years, which means the 5%-plus dividend has been the primary source of returns. But after trading sideways for so long, shares finally are starting to show signs of life, up about 5% year-to-date.

It’s understandable to have reservations about investing in China. The country is notorious for cooking its books, and U.S.-Chinese relations aren’t exactly the friendliest these days. But China’s economy finally appears to be shaking out of its multiyear funk, growing at 6.9% last year. And investors also are warming up to Chinese stocks, due in no small part to MSCI’s decision to finally include Chinese A shares (companies listed on mainland China exchanges) in its popular emerging-market indexes. This should mean hundreds of billions of dollars in inflows into the country’s stock market in the years ahead.

China Mobile is an H share, trading in Hong Kong, and not a mainland-traded A share. But this rising tide should lift all boats, with investor enthusiasm for A shares spilling over into the Hong Kong market, too.

• Dividend yield: 4.7%

One last telco pick, South Africa’s MTN Group (MTNOY, $11.34), is worth a good look.

African stocks are not for the faint of heart. This still is very much the Wild West of investing, but that’s also what makes African stocks so appealing. Sub-Saharan Africa is one of the few regions of the world that can realistically expect to grow at “China-like” rates in the decades ahead. Mobile communication is a big part of that story.

One of the reasons for Africa’s lack of development is its harsh geography, which makes building infrastructure very difficult and very expensive. But mobile technology allows large parts of Africa to essentially skip several developmental steps and jump with both feet into the modern world.

As a local company that understands the continent, MTN has major advantages over rivals like Britain’s Vodafone (VOD). Inflation and instability in the South African rand is a problem, unfortunately. But if you’re willing to be patient and accept a little currency volatility, MTNOY is a stock you could consider buying and essentially dropping in a drawer and forgetting about for the next decade.

Buy MTN, collect its fat 4.7% dividend, and watch one of the great growth stories of our time unfold.

• Dividend yield: 4.8%*

Emerging markets are just now emerging from a dark period of commodity price instability, political chaos and weaker-than-usual growth. Starting a little over a year ago, EM stocks finally started rising again.

If you time a bull market in emerging-market stocks correctly – admittedly not an easy task – you can reap massive gains in just a few years. And it’s likely we’re in the early stages of one of those moves.

If you want in on the action, the iShares Emerging Markets Dividend ETF (DVYR, $45.07) is a solid option. This portfolio of roughly 100 stocks includes Chinese real estate company R&F Properties, Russian oil and gas company Surgutneftegas and MTN, among others, and charges just 0.49%, or $49 annually for every $10,000 invested.

Yes, “emerging markets” and “dividend stocks” make an odd couple. Emerging markets tend to be volatile and risky, whereas dividend stocks are something bought for conservative retirement income.

But that’s what’s great about DVYE. It provides exposure to emerging markets, but pays investors for putting their capital at risk via an attractive 4.8% dividend.

*Yield represents the trailing 12-month yield, which is a standard measure for exchange-traded funds.

Charles Sizemore was long DVYE as of this writing.

The U.S. is near full employment and global economies are in synchronized growth mode. That's going to make life trickier for income investors, as these trends will spark higher interest rates, which will weigh on bonds and classic dividend plays such as companies that sell toothpaste. Fortunately, there’s a fix: Buy energy stocks.

Many energy companies not only deliver sizable yields, but they now have potential to grow again as energy prices rebound, powered by these drivers:

Growing demand. Expanding economies use more energy. Americans are driving bigger cars. And in emerging markets, more people are joining the middle class. They’re naturally demanding energy-hungry basic amenities, such as cars and electric lighting.

Slowing supply growth. As oil wells age, production naturally declines by as much as 5% a year overall, says Jonathan Waghorn, who helps manage the Guinness Atkinson Global Energy Fund (GAGEX). This means energy companies must run hard just to stay in place. However, when oil plunged a few years ago, big energy companies pulled back investments in projects that take a few years to develop. The “air pocket” of missing wells in the pipeline will bite into supply growth soon. Meanwhile, U.S. shale production, while prolific, is growing less than expected, says Mike Breard, an energy analyst at Hodges Capital Management in Texas. Also, the Organization of the Petroleum Exporting Countries’ (OPEC) compliance on production cuts has been great, and that’s not likely to stop, Breard predicts.

Political instability. It’s no secret that oil comes from countries wrought with political instability – and not just Venezuela, Nigeria, Libya and Iraq. Oil recently jumped when Saudi Arabia’s Crown Prince Mohammad bin Salman (MBS) locked up rivals in a domestic power grab. Investors worried his maneuver could spill over into regional conflict. The MBS oil price move may fade a bit. But the risk of political conflict that disrupts supply won’t.

Here are seven energy stocks to buy that should benefit from these bullish oil trends, while paying you annual yields of between 2% and 9%.

Data is as of Nov. 13, 2017. Stocks are listed in alphabetical order. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Click on ticker-symbol links in each slide for current share prices and more.

• Dividend yield: 3.7%

The starting point for anyone building an energy-sector dividend portfolio has to be Exxon Mobil (XOM, $82.89). This energy giant’s low cost of capital and savvy approach to building long-lived assets and reserves around the globe give it some of the best returns on capital in the business.

While Exxon Mobil lost its former CEO, Rex Tillerson, to the administration of President Donald Trump, it’s now in the capable hands of Darren Woods, who came up the ranks in the refining and chemical division. Under his leadership, Exxon Mobil recently announced it is spending $1 billion a year on green energy and biofuel research, though profitable breakthroughs may be years away.

More important to the here and now, Exxon has been investing more heavily “unconventional” shale plays in the Permian and Bakken, says Breard, of Hodges Capital Management. Since these wells can be brought online more quickly, this gives the company better flexibility to increase production when oil and gas prices rise. And unlike a lot of smaller exploration and production companies, Exxon Mobil isn’t just in upstream energy production – it has a huge presence in downstream refining and chemical manufacturing.

Together, these factors mean that Exxon Mobil generates strong and consistent cash flow even when oil falls – exactly what you want to see if you are investing in an energy company for dividends. Morningstar analyst Allen Good thinks Exxon can cover its dividend at oil prices as low as $40 per barrel. (However, a drop back to such levels seems unlikely.)

• Dividend yield: 6%
• BP (BP, $39.88) has a lot of debt. It’s still paying billions of dollars each year in fines for the 2010 Deepwater Horizon oil spill disaster in the Gulf of Mexico. And it’s selling off the family jewels to help cover these payments.If all of this makes you question the safety of the company’s 6% dividend yield, however, stop right now. BP announced a share buyback at the end of October, which is all we need to know about the dividend’s security. Companies don’t buy back shares when they are in danger of cutting dividends.

Thanks to cost discipline and higher oil prices, BP’s free cash flow has been growing substantially. Production grew 11% in the third quarter. Barring a sharp decline in oil, the company’s rich dividend yield is safe. By its latest estimate, BP has enough cash to cover capital spending and dividends when Brent crude oil is as low as at $49 a barrel. It recently traded for around $63.50 a barrel.

As for those Gulf of Mexico oil spill payments, they’re going to drop sharply to $2 billion in 2018 and a little more than $1 billion in 2019, from around $5.5 billion this year.

BP investors have the option of accepting dividends in “scrip,” or shares. Whether you take shares or cash is a personal choice depending on your cash flow needs and tax planning. But for some perspective, only about 20% of shareholders take stock.

• Dividend yield: 5.7%

Investor negativity on energy suggests money managers have vastly underweighted positions, says Jim Paulsen, chief investment strategist at the Leuthold Group. As fundamentals continue to improve, they’ll be forced to lift portfolio exposures, he says.

That will have them scrambling for the shares of companies like Royal Dutch Shell (RDS.B, $65.92).

Europe’s energy giant beat analyst expectations again in the third quarter, with a 47% increase in net profits to $4.1 billion. More importantly, for dividend investors, Shell continues to be a cash flow machine. Over the 12 months through the end of the third quarter, it produced $40 billion in operating cash flow (cash left over from operations, excluding capital expenditures and other investments). That was with Brent crude at an average of $51 per barrel – far lower than it is now. In contrast, dividends cost the company about $15 billion a year.

Shell also purchased energy firm BG Group in 2016, which gave it access to lower-cost assets, and the company subsequently targeted about $4.5 billion in merger-related savings.

Shell offers two share types: A-class American depository receipts, which fall under Dutch laws, or B-class ADRs, which fall under U.K. laws. Go with the B shares because you won’t have to pay Dutch withholding tax on the dividends.

• Dividend yield: 2.3%
• PetroChina (PTR, $70.20) is China’s state-owned exploration and production giant. The Chinese government owns 86% of its stock. For a lot of investors, that’s a show-stopper right there; they reason that PetroChina may exist to serve Chinese society as much as create shareholder value.

But there are advantages to being government-run. First off, PetroChina is a monopoly. The Chinese government restricts foreign companies from exploring inside its borders. This gives PetroChina an obvious leg up. Next, PetroChina owns the lion’s share of China’s oil and gas pipeline network, a cash machine. It’s spinning some of those pipelines off to raise capital, but maintaining a controlling stake. Abroad, PetroChina may get preferred access to energy reserves in countries where China’s government offers foreign aid, Breard says.

Besides, while investor sentiment on PetroChina has been negative – setting it up as a potential contrarian bet – there’s no reason to think it can’t benefit from higher oil prices as much as any company. To wit: PetroChina just posted a 291% increase in third-quarter profits at the end of October on a 17% increase in revenue, thanks to rising crude oil prices and cost controls. Despite the negativity surrounding this company, it’s reasonable to expect more of the same, if oil keeps moving higher.

• Dividend yield: 2.3%

Energy services company Baker Hughes sure came up with a clunky name when it merged with a portion of General Electric’s (GE) energy business last July. But the resulting company – Baker Hughes, A GE Company (BHGE, $31.88) – should be great for shareholders.

That’s because the company is under new management – and the business has plenty of room to improve. Baker Hughes has a “very long history of running its business poorly,” Morningstar analyst Preston Caldwell says.

Now it’s in the hands of Lorenzo Simonelli, an alum of GE, which prides itself in developing some of the best management talent in the world. This signals there’s a good chance Simonelli will work some magic, cut costs and boost profits. “We believe the upside is considerable,” Caldwell says.

Baker Hughes serves the booming U.S. shale sector, where growth will continue to be hot – especially if oil prices go higher. The company’s high-tech drilling and completion equipment will be in demand because it can carry out complex tasks, faster. “We continue to believe that our advanced drilling capabilities will differentiate us in the marketplace,” Simonelli told investors in the most recent conference call.

As an added plus, an insider recently purchased shares not too far below current prices. And the new Baker Hughes just signaled that it wants to play nice with shareholders – by launching a massive $3 billion share buyback which could eventually sop up 8% of its outstanding shares. This suggests the company will hike dividends regularly, too.

• Distribution yield: 8.6%

I love to follow insider buying to find ideas for my stock newsletter Brush Up on Stocks. Tallgrass Energy Partners (TEP, $44.19) first popped up in my system in May 2013, and I put it in my letter at $22.50. It now trades for more than $44. Nice returns, but there could be more to go because insiders still are buying.

CEO David Dehaemers Jr. has purchased $1.7 million worth of stock (technically called “units”) around current prices since August. CFO Gary Brauchle also was buying. In fact, insiders have done nothing but purchase shares all the way up since 2013. Continued buying on strength is a particularly bullish signal in insider analysis. Insider selling is less meaningful – and it’s not always a negative. But it’s worth pointing out there has been zero insider selling here in the past four years.

Tallgrass is an energy infrastructure company with two vast networks of pipelines called the Rockies Express Pipeline and the Pony Express spanning the country from Ohio to Colorado and Wyoming. They pipe energy from some of the most prolific oil and gas plays in the country, including the Marcellus, Utica Powder River, Bakken and Denver-Julesburg basins.

Tallgrass is a master limited partnership, which means there may be complications if you own it in tax-protected accounts. And MLPs definitely complicate matters at tax time. Technically, pipeline companies pay “distributions,” not dividends, because as MLPs, they are distributing profits to you without paying tax on them – one of the reasons yields are so high. As a result, investors who receive income from MLPs typically must deal with the additional K-1 form come tax time.

• Distribution yield: 5.8%

Pipeline companies pay such nice yields, it’s worth considering more than one for any energy sector dividend portfolio. Another one I’ve recently highlighted in my stock letter is Plains GP Holdings (PAGP, $20.88).

Investors soured on Plains GP this summer because it cut distributions due to problems in its supply and logistics business. But CEO Greg Armstrong, a director, and the general counsel were significant buyers in the weakness. They purchased $1.5 million worth of Plains GP units in August at around $21.50. Betting alongside insiders who challenge the market by buying weakness often is a winning tactic, and that should be the case here.

Plains GP may not get back to hiking distributions for a year or two. But it pays a nice distribution yield in the meantime, and you’re likely to see outperformance in its units as investors get more comfortable with the company again. That’s clearly what the insider buying suggests. The ace in the hole here: Plains operates pipelines and storage facilities that serve the Permian Basin – America's lowest-cost and most prolific shale basin, which should have years of growth ahead of it.

Brush has suggested TEP and PAGP in his stock newsletter, Brush Up on Stocks, as of this writing.

Finding a company with a long track record of consistent dividend payments is only part of the winning formula for investing in dividend stocks. Dividend growth matters, too. Rising dividends not only make a stock more attractive to new income investors, but steady dividend hikes also reward existing investors on shares purchased at lower prices in the past.

It's not hard to find well-known names with long track records of annual dividend growth. Just start with the Dividend Aristocrats, a list of 50 companies in Standard & Poor's 500-stock index that have hiked their dividends every year for at least 25 consecutive years. A number of huge companies top this list, including AT&T (T), Exxon Mobil (XOM) and Procter & Gamble (PG). But there's a world of smaller, lesser known stocks that boast consistent dividend growth of four decades or more. We culled the following sometimes surprising names from among the 25 smallest Dividend Aristocrats. Check out these 17 stocks whose dividends have increased annually for at least 40 consecutive years.

(Dividend yields and other figures are as of June 30, 2017. Companies are listed in order of market capitalization—share price times total shares outstanding—starting with the highest. Analysts’ ratings provided by Zacks Investment Research. The full list of 50 Dividend Aristocrats is maintained by S&P Dow Jones Indices. Dividend history based on company information and S&P data.)

• Symbol: SYY
• Share price: $53.86
• 52-week range: $47.15 - $57.07
• Dividend yield: 2.4%
• Market cap: $30 billion
• Analysts’ opinion: 4 strong buy, 0 buy, 5 hold, 0 underperform, 1 sell

Sysco, a food services and restaurant supply company, is ramping up revenues by making acquisitions. The company bought European services and supplies company Brakes Group last year, as well as the Supplies on the Fly e-commerce platform. Sales for the quarter ended April 1 were up 12.7% to $13.5 billion, due in large part to contributions from Brakes Group. Sysco has paid a quarterly dividend every quarter since going public in 1970, and the annual payout has risen every year since 1976.

• Symbol: PPG
• Share price: $110.78
• 52-week range: $89.64 - $113.49
• Dividend yield: 1.5%
• Market cap: $29 billion
• Analysts’ opinion: 11 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell

Paints and coatings company PPG Industries is on the prowl for a big acquisition after Dutch firm Akzo Nobel rejected its $25 billion offer. Potential targets could be closely held Kelly-Moore Paints or Brazil’s Tintas Suvinil, a division of BASF, according to UBS. Either way, the company is under pressure to get bigger after Sherwin-Williams, a fellow Dividend Aristocrat and competitor in the paint business, recently acquired Valspar. PPG has raised its dividend for 45 consecutive years.

• Symbol: ED
• Share price: $80.82
• 52-week range: $68.76 - $85.13
• Dividend yield: 3.4%
• Market cap: $25 billion
• Analysts’ opinion: 0 strong buy, 0 buy, 6 hold, 0 underperform, 3 sell

Utility stocks have long been known as ideal investments for widows and orphans thanks to slow-but-steady growth secured by the near-monopolistic nature of the business. Founded in 1823, Consolidated Edison fits the profile. It provides electric, gas and steam service for the 10 million customers in New York City and Westchester County. ConEd’s dividend has gone up annually for 42 straight years and counting.

• Symbol: ADM
• Share price: $41.38
• 52-week range: $39.01 - $47.88
• Dividend yield: 3.1%
• Market cap: $24 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 8 hold, 0 underperform, 1 sell

Archer-Daniels-Midland processes ingredients for food and feed, including corn sweeteners, starches and emulsifiers such as lecithin. It also has a commodities trading business. Following a pattern of growing through acquisitions, in January 2017 ADM bought Crosswind Industries, a company that specializes in pet treats, pet food and related ingredients. It didn’t disclose terms. ADM has increased its payout to shareholders every year for 42 years.

• Symbol: BCR
• Share price: $315.58
• 52-week range: $203.63 - $316.80
• Dividend yield: 0.3%
• Market cap: $23 billion
• Analysts’ opinion: 0 strong buy, 0 buy, 14 hold, 0 underperform, 0 sell

Get to know C.R. Bard before it disappears from the list of Dividend Aristocrats. The medical products company agreed in April to be acquired by bigger rival Becton, Dickinson (BDX) for $24 billion. The deal, which is currently undergoing review by regulators, is expected to close in the fall of 2017. Meantime, C.R. Bard is still paying out a dividend that has gone up every year for 46 straight years. Oh, and in case you’re wondering, acquirer Becton, Dickinson is a fellow Dividend Aristocrat with 45 straight years of dividend growth.

• Symbol: VFC
• Share price: $57.60
• 52-week range: $48.05 - $65.28
• Dividend yield: 3.0%
• Market cap: $23 billion
• Analysts’ opinion: 6 strong buy, 0 buy, 11 hold, 1 underperform, 1 sell

Even if you don’t have the stock in your investment portfolio, you probably have the company’s products in your closet. V.F. Corp. is an apparel maker whose well-known brands include Lee, Wrangler, Nautica, Vans and The North Face. Name recognition aside, the ongoing – and, arguably, accelerating – struggles of bricks-and-mortar retailers is taking a toll on business, with first-quarter profits and revenues declining year over year. What isn’t declining is the dividend growth. V.F. has lifted its annual payout to investors every year for 44 years.

• Symbol: SWK
• Share price: $142.89
• 52-week range: $103.86 - $143.84
• Dividend yield: 1.6%
• Market cap: $22 billion
• Analysts’ opinion: 8 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell

Stanley Black & Decker is widely recognized as a maker of tools, but the company also operates diverse businesses ranging from security systems to pipeline services. Management is pursuing a strategy of growth through acquisitions, with a goal of doubling annual sales to $22 billion by 2022. Stanley Black & Decker bought Newell Tools from Newell Brands (NWL) for $2 billion last year, and in January negotiated the purchase of Craftsman tools from Sears Holdings (SHLD) for a total of $775 million over three years and a percentage of annual sales. Stanley, which has paid a dividend since 1877, has lifted its dividend every year since 1968.

• Symbol: NUE
• Share price: $56.13
• 52-week range: $44.81 - $68.00
• Dividend yield: 2.8%
• Market cap: $18 billion
• Analysts’ opinion: 10 strong buy, 0 buy, 3 hold, 0 underperform, 0 sell

Despite a strong rally in the broader stock market, shares of the steelmaker have bounced around in 2017 on worries over steel prices and a global steel glut. On June 15, Nucor warned that its second-quarter profits would come in below first-quarter levels due in part to cheap imports. However, management is holding out hope that the U.S. government will take action to deter foreign dumping and prop up domestic steel prices. Meanwhile, Nucor continues to hike its dividend every year, as it has done since 1974.

• Symbol: HRL
• Share price: $33.94
• 52-week range: $32.90 - $40.00
• Dividend yield: 2%
• Market cap: $18 billion
• Analysts’ opinion: 3 strong buy, 0 buy, 5 hold, 0 underperform, 0 sell

Even if you don’t know Hormel, you certainly know its signature product: Spam. But the canned ham is far from the only company offering you’ll find on supermarket shelves. Other products run the gamut from deli meats to canned chili and stew. Zacks recently cautioned investors about the stock due to slumping turkey prices, which have hampered Hormel’s Jennie-O brand. Management expects the oversupply of turkeys to eat into 2017 profits more than expected. Meantime, Hormel continues its streak of annual dividend increases, which currently stands at 51 years in a row and counting.

• Symbol: CLX
• Share price: $140.12
• 52-week range: $111.24 - $141.76
• Dividend yield: 2.4%
• Market cap: $18 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 10 hold, 1 underperform, 0 sell

Clorox, whose brands include its namesake bleaches, Glad trash bags and Hidden Valley salad dressing, continues to enjoy robust sales and earnings gains in 2017. The upbeat results are being driven in part by new products such as OdorShield trash bags, according to Morningstar, and management expects sales and earnings to stay strong for the rest of the year. Clorox, which boosted its quarterly cash dividend by 5% in May, has raised its dividend annually for 40 consecutive years.

• Symbol: GPC
• Share price: $91.27
• 52-week range: $86.61 - $105.97
• Dividend yield: 2.8%
• Market cap: $14 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 6 hold, 1 underperform, 0 sell

The company is best known for its NAPA Auto Parts chain, which has 6,000 locations in the U.S., but Genuine Parts also makes industrial replacement parts, office products and electrical materials. The business diversity can help fuel growth. In October, it bought Braas Company, a distributor of products and services for industrial automation and control. The deal is expected to generate an extra $90 million a year in sales. A long-time dividend machine, Genuine Parts has bumped up its dividend annually for 61 years in a row.

• Symbol: DOV
• Share price: $80.95
• 52-week range: $63.93 - $84.40
• Dividend yield: 2.1%
• Market cap: $13 billion
• Analysts’ opinion: 4 strong buy, 1 buy, 8 hold, 0 underperform, 0 sell

The global manufacturer operates in four industries: energy, fluids, engineered systems and refrigeration equipment. You might have fueled up your car from one of its gas pumps or bought groceries from one of its refrigerated display cases. Since Dover sells to customers worldwide, unfavorable foreign exchange rates have hurt sales of late. A strong dollar means sales made overseas lose value when converted back into U.S. currency. But that hasn’t stopped the company from maintaining it focus on dividend growth. Dover has recorded 61 straight years of dividend increases.

• Symbol: CINF
• Share price: $72.38
• 52-week range: $68.11 - $79.60
• Dividend yield: 2.7%
• Market cap: $12 billion
• Analysts’ opinion: 0 strong buy, 0 buy, 1 hold, 0 underperform, 1 sell

Cincinnati Financial’s stock performance has gotten off to a disappointing start to 2017. The share price is down 3% year to date, even as Standard & Poor’s 500-stock index is up 9%. Widespread storms in the South and Midwest hurt first-quarter profits at the property and casualty insurer. But short-term operating setbacks didn’t hurt the company’s reliable dividend. Cincinnati Financial has lifted its cash payout annually for 56 years and counting.

• Symbol: PNR
• Share price: $66.49
• 52-week range: $53.80 - $69.03
• Dividend yield: 2.1%
• Market cap: $12 billion
• Analysts’ opinion: 3 strong buy, 0 buy, 9 hold, 1 underperform, 1 sell

Dividend investors will want to keep an eye on all the changes afoot at Pentair. The diversified industrial manufacturer sold its valves and controls business to Emerson Electric (EMR) in April for more than $3 billion. Soon after, management announced plans to split Pentair into two separate companies by the second quarter of 2018. One company will focus on water operations and the other on electrical technology. Quarterly payouts will continue in the meantime, though the dividend will be re-evaluated once the split is completed. Pentair has raised its dividend every year for 41 consecutive years.

• Symbol: GWW
• Share price: $174.66
• 52-week range: $168.58 - $262.71
• Dividend yield: 2.8%
• Market cap: $10 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 10 hold, 0 underperform, 3 sell

W.W. Grainger sells all manner of equipment and supplies to industrial customers. Its product catalog is more than 3,000 pages. But looming online competition from (who else?) Amazon.com (AMZN) has investors nervous and has forced the company to trim prices to stay competitive. First-quarter profits failed to beat analysts' earnings estimates in April, and management warned investors that sales will improve more slowly this year than previously thought. The share price has been falling ever since and is currently one-third below its 52-week high. W.W. Grainger has boosted its annual dividend payout every year for 46 straight years.

• Symbol: FRT
• Share price: $126.39
• 52-week range: $120.50 - $171.08
• Dividend yield: 3.1%
• Market cap: $9 billion
• Analysts’ opinion: 6 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell

Federal Realty Investment Trust is a real estate investment trust that specializes in leasing space to retailers. Its biggest tenants include Ahold, a supermarket operator, discounter TJX Cos. (TJX) and apparel seller The Gap (GPS). And while bricks-and-mortar retail is a shaky industry at the moment, Federal Realty diversifies its risk by leasing to non-retail tenants such as gyms and movie theaters. Since REITs are required to pay out most of their earnings as dividends in exchange for certain tax benefits, they are a go-to source for income. No REIT has been steadier than Federal Realty, which has lifted its payout annually for 49 years in a row.

• Symbol: LEG
• Share price: $52.97
• 52-week range: $44.02 - $54.97
• Dividend yield: 2.7%
• Market cap: $7 billion
• Analysts’ opinion: 2 strong buy, 0 buy, 3 hold, 0 underperform, 0 sell

Leggett & Platt makes components for manufacturers of upholstered furniture, beds and other home furnishings. It’s not a particularly famous name or a particularly glamorous business, but the stock has been a star for long-term shareholders. Shares have more than doubled the return of the S&P 500 over the past 10 years. Leggett & Platt has increased its dividend payout every year for 46 consecutive years. According to the company, dividends rose at a compound annual rate of 13% over that period.

Generous dividend stocks that reliably raise their payouts year after year can be an important piece of an income portfolio. A smart way to identify attractive dividend stocks is to focus on the Dividend Aristocrats, 50 companies in Standard & Poor’s 500-index that have raised dividends for at least 25 years in a row.

Big Dividend Aristocrats with yields of more than 3% are well known to income investors and feature prominently in many retirement portfolios. (Think AT&T (T), Exxon Mobil (XOM), Procter & Gamble (PG), Coca-Cola (KO) and the like.) But there are many smaller Dividend Aristocrats with above-average yields that can go unnoticed. Take a look at five surprising dividend stocks with 3%-plus yields whose dividends have increased annually for 25 years or more.

(Dividend yields and other figures are as of June 30, 2017. Companies are listed in order of market capitalization—share price times total shares outstanding—starting with the highest. The following five stocks were selected from among the 25 smallest Dividend Aristocrats by market cap. The full list of all 50 Dividend Aristocrats is maintained by S&P Dow Jones Indices. Dividend history based on company information and S&P data. Analysts’ ratings provided by Zacks Investment Research.)

• Symbol: ED
• Share price: $80.82
• 52-week range: $68.76 - $85.13
• Dividend yield: 3.4%
• Market cap: $25 billion
• Analysts’ opinion: 0 strong buy, 0 buy, 6 hold, 0 underperform, 3 sell

Utility stocks have long been known as ideal investments for widows and orphans thanks to slow-but-steady growth secured by the near-monopolistic nature of the business. Founded in 1823, Consolidated Edison fits the profile. It provides electric, gas and steam service for the 10 million customers in New York City and Westchester County. ConEd’s dividend has gone up annually for 42 straight years and counting.

• Symbol: ADM
• Share price: $41.38
• 52-week range: $39.01 - $47.88
• Dividend yield: 3.1%
• Market cap: $24 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 8 hold, 0 underperform, 1 sell

Archer-Daniels-Midland processes ingredients for food and feed, including corn sweeteners, starches and emulsifiers such as lecithin. It also has a commodities trading business. Following a pattern of growing through acquisitions, in January 2017 ADM bought Crosswind Industries, a company that specializes in pet treats, pet food and related ingredients. It didn’t disclose terms. ADM has increased its payout to shareholders every year for 42 years.

• Symbol: VFC
• Share price: $57.60
• 52-week range: $48.05 - $65.28
• Dividend yield: 3.0%
• Market cap: $23 billion
• Analysts’ opinion: 6 strong buy, 0 buy, 11 hold, 1 underperform, 1 sell

Even if you don’t have the stock in your investment portfolio, you probably have the company’s products in your closet. V.F. Corp. is an apparel maker whose well-known brands include Lee, Wrangler, Nautica, Vans and The North Face. Name recognition aside, the ongoing – and, arguably, accelerating – struggles of bricks-and-mortar retailers is taking a toll on business, with first-quarter profits and revenues declining year over year. What isn’t declining is the dividend growth. V.F. has lifted its annual payout to investors every year for 44 years.

• Symbol: TROW
• Share price: $74.21
• 52-week range: $62.97 - $78.95
• Dividend yield: 3.1%
• Market cap: $18 billion
• Analysts’ opinion: 3 strong buy, 0 buy, 5 hold, 0 underperform, 3 sell

T. Rowe Price faces many of the same challenges as other asset managers; namely, losing market share to indexed funds, particularly the type of low-cost U.S. index funds offered by the likes of Vanguard. The company is managing to offset some of the outflows from its actively managed U.S. funds with more inflows into its international offerings. Rising advisory fees, as well as a strong U.S. stock market that has boosted assets under management, are helping, too. T. Rowe Price has hiked its payout every year for 31 years.

• Symbol: FRT
• Share price: $126.39
• 52-week range: $120.50 - $171.08
• Dividend yield: 3.1%
• Market cap: $9 billion
• Analysts’ opinion: 6 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell

Federal Realty Investment Trust is a real estate investment trust that specializes in leasing space to retailers. Its biggest tenants include Ahold, a supermarket operator, discounter TJX Cos. (TJX) and apparel seller The Gap (GPS). And while bricks-and-mortar retail is a shaky industry at the moment, Federal Realty diversifies its risk by leasing to non-retail tenants such as gyms and movie theaters. Since REITs are required to pay out most of their earnings as dividends in exchange for certain tax benefits, they are a go-to source for income. No REIT has been steadier than Federal Realty, which has lifted its payout annually for 49 years in a row.

There’s never really a bad time to invest in companies that regularly raise dividends year after year. Reliable dividend growth is a sign of financial strength and a steady source of income in markets both good and bad. According to Richard Turnill, BlackRock’s global chief investment strategist, now is an especially good time to buy as the Federal Reserve continues its campaign to boost interest rates. “[Dividend growers] tend to be more resilient amid rising rates and outperform when rising rates are driven by higher inflation,” he says.

A smart way to identify attractive dividend stocks is to focus on the Dividend Aristocrats, 50 companies in Standard & Poor’s 500-index that have raised dividends for at least 25 years in a row. The biggest Dividend Aristocrats are well known to income investors and feature prominently in many retirement portfolios. (Think AT&T (T), Exxon Mobil (XOM), Procter & Gamble (PG), Coca-Cola (KO) and the like.) However, the smaller Dividend Aristocrats tend to fly under the radar. Take a look at 25 surprising companies whose dividends have increased annually for a quarter-century or more.

(Dividend yields and other figures are as of June 20, 2017. Companies are listed in order of market capitalization—share price times total shares outstanding—starting with the highest. Analysts’ ratings provided by Zacks Investment Research. The list of 50 Dividend Aristocrats is maintained by S&P Dow Jones Indices. Dividend history based on company information and S&P data.)

• Symbol: SHW
• Share price: $357.96
• 52-week range: $239.48 - $360.58
• Dividend yield: 1.0%
• Market cap: $33 billion
• Analysts’ opinion: 6 strong buy, 0 buy, 4 hold, 1 underperform, 0 sell

While its yield is modest, its track record of annual dividend hikes is anything but. Sherwin-Williams has boosted its dividend every year for 38 straight years. The company recently completed an $11 billion acquisition of Valspar, which expands its business in both North America and overseas and solidifies its position as a global leader in paints and coatings. With the stock trading near its 52-week high, patient income investors might want to wait for a price dip before buying.

• Symbol: AFL
• Share price: $78.71
• 52-week range: $66.50 - $79.86
• Dividend yield: 2.2%
• Market cap: $31 billion
• Analysts’ opinion: 2 strong buy, 1 buy, 7 hold, 0 underperform, 1 sell

The insurer, which does business in Japan and the U.S., is better known for its Aflac Duck ad campaigns than for its dividend. And yet, the stock sports a higher yield than the S&P 500 as a whole. Rising rates should help financial results, since insurers earn interest on the premiums they collect before they are paid out in claims. Shareholders should also benefit from the company’s plan to buy back between $1.3 billion and $1.5 billion of its stock in 2017. Aflac has hiked its dividend 34 years in a row.

• Symbol: SYY
• Share price: $53.86
• 52-week range: $47.15 - $57.07
• Dividend yield: 2.4%
• Market cap: $30 billion
• Analysts’ opinion: 4 strong buy, 0 buy, 5 hold, 0 underperform, 1 sell

Sysco, a food services and restaurant supply company, is ramping up revenues by making acquisitions. The company bought European services and supplies company Brakes Group last year, as well as the Supplies on the Fly e-commerce platform. Sales for the quarter ended April 1 were up 12.7% to $13.5 billion, due in large part to contributions from Brakes Group. Sysco has paid a quarterly dividend every quarter since going public in 1970, and the annual payout has risen every year since 1976.

• Symbol: PPG
• Share price: $110.78
• 52-week range: $89.64 - $113.49
• Dividend yield: 1.5%
• Market cap: $29 billion
• Analysts’ opinion: 11 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell

Paints and coatings company PPG Industries is on the prowl for a big acquisition after Dutch firm Akzo Nobel rejected its $25 billion offer. Potential targets could be closely held Kelly-Moore Paints or Brazil’s Tintas Suvinil, a division of BASF, according to UBS. Either way, the company is under pressure to get bigger after Sherwin-Williams, a fellow Dividend Aristocrat and competitor in the paint business, recently acquired Valspar. PPG has raised its dividend for 45 consecutive years.

• Symbol: ED
• Share price: $84.96
• 52-week range: $68.76 - $85.13
• Dividend yield: 3.3%
• Market cap: $25 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 5 hold, 0 underperform, 3 sell

Utility stocks have long been known as ideal investments for widows and orphans thanks to slow-but-steady growth secured by the near-monopolistic nature of the business. Founded in 1823, Consolidated Edison fits the profile. It provides electric, gas and steam service for the 10 million customers in New York City and Westchester County. ConEd’s dividend has gone up annually for 42 straight years and counting.

• Symbol: BEN
• Share price: $44.51
• 52-week range: $30.56 - $45.21
• Dividend yield: 1.8%
• Market cap: $25 billion
• Analysts’ opinion: 2 strong buy, 0 buy, 4 hold, 0 underperform, 1 sell

The name Franklin Resources might not ring a bell with investors, but it should. Along with its subsidiaries, the asset manager is better known by the more familiar name Franklin Templeton Investments, founded in 1947. Today, Franklin Resources and other companies that operate mutual funds have come under pressure because more and more customers are eschewing traditional stock-pickers in favor of indexed investments. Franklin currently has $745 billion in assets under management, down from $764 billion at the end of 2015. On the plus side, the reliable dividend has gone up every year since 1982.

• Symbol: CAH
• Share price: $76.31
• 52-week range: $62.70 - $85.52
• Dividend yield: 2.5%
• Market cap: $24 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 11 hold, 0 underperform, 0 sell

Despite pressure from state and federal authorities over its distribution of painkillers, Cardinal Health posted good results for the quarter ended March 31, with sales improving and profits beating analysts’ expectations. Earlier this year, the company agreed to a $20 million settlement with West Virginia over a lawsuit tied to opiate abuse in the state. Last December, it agreed to pay $44 million to the U.S. Department of Justice to settle allegations that it failed to report suspicious drug orders. Easing the pain for shareholders, Cardinal Health has raised its dividend annually for 29 years in a row.

• Symbol: ADM
• Share price: $41.48
• 52-week range: $39.01 - $47.88
• Dividend yield: 3.1%
• Market cap: $24 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 8 hold, 0 underperform, 1 sell

Archer-Daniels-Midland processes ingredients for food and feed, including corn sweeteners, starches and emulsifiers such as lecithin. It also has a commodities trading business. Following a pattern of growing through acquisitions, in January 2017 ADM bought Crosswind Industries, a company that specializes in pet treats, pet food and related ingredients. It didn’t disclose terms. ADM has increased its payout to shareholders every year for 42 years.

• Symbol: BCR
• Share price: $315.58
• 52-week range: $203.63 - $316.80
• Dividend yield: 0.3%
• Market cap: $23 billion
• Analysts’ opinion: 0 strong buy, 0 buy, 14 hold, 0 underperform, 0 sell

Get to know C.R. Bard before it disappears from the list of Dividend Aristocrats. The medical products company agreed in April to be acquired by bigger rival Becton, Dickinson (BDX) for $24 billion. The deal, which is currently undergoing review by regulators, is expected to close in the fall of 2017. Meantime, C.R. Bard is still paying out a dividend that has gone up every year for 46 straight years. Oh, and in case you’re wondering, acquirer Becton, Dickinson is a fellow Dividend Aristocrat with 45 straight years of dividend growth.

• Symbol: VFC
• Share price: $54.89
• 52-week range: $48.05 - $65.28
• Dividend yield: 3.0%
• Market cap: $23 billion
• Analysts’ opinion: 6 strong buy, 0 buy, 12 hold, 1 underperform, 1 sell

Even if you don’t have the stock in your investment portfolio, you probably have the company’s products in your closet. V.F. Corp. is an apparel maker whose well-known brands include Lee, Wrangler, Nautica, Vans and The North Face. Name recognition aside, the ongoing – and, arguably, accelerating – struggles of bricks-and-mortar retailers is taking a toll on business, with first-quarter profits and revenues declining year over year. What isn’t declining is the dividend growth. V.F. has lifted its annual payout to investors every year for 44 years.

• Symbol: SWK
• Share price: $142.89
• 52-week range: $103.86 - $143.84
• Dividend yield: 1.6%
• Market cap: $22 billion
• Analysts’ opinion: 8 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell

Stanley Black & Decker is widely recognized as a maker of tools, but the company also operates diverse businesses ranging from security systems to pipeline services. Management is pursuing a strategy of growth through acquisitions, with a goal of doubling annual sales to $22 billion by 2022. Stanley Black & Decker bought Newell Tools from Newell Brands (NWL) for $2 billion last year, and in January negotiated the purchase of Craftsman tools from Sears Holdings (SHLD) for a total of $775 million over three years and a percentage of annual sales. Stanley, which has paid a dividend since 1877, has lifted its dividend every year since 1968.

• Symbol: BF.B
• Share price: $49.38
• 52-week range: $43.72 - $59.71
• Dividend yield: 1.5%
• Market cap: $19 billion
• Analysts’ opinion: 0 strong buy, 0 buy, 6 hold, 0 underperform, 1 sell

Brown-Forman is one of the largest producers and distributors of alcohol in the world. Jack Daniel’s whiskey and Finlandia vodka are just two of its best-known brands. After the U.S., its biggest markets are the United Kingdom, Australia and Mexico. It’s this international profile that exposes the company to the ill effects of a stronger dollar, since sales made overseas if foreign currencies are worth less when converted into U.S. currency. Sales and profits fell for the fiscal year ended April 30, but management remains upbeat for the current fiscal year. Brown-Forman has boosted its dividend annually for the last 33 years. We'll drink to that.

• Symbol: NUE
• Share price: $56.13
• 52-week range: $44.81 - $68.00
• Dividend yield: 2.8%
• Market cap: $18 billion
• Analysts’ opinion: 10 strong buy, 0 buy, 3 hold, 0 underperform, 0 sell

Despite a strong rally in the broader stock market, shares of the steelmaker have bounced around in 2017 on worries over steel prices and a global steel glut. On June 15, Nucor warned that its second-quarter profits would come in below first-quarter levels due in part to cheap imports. However, management is holding out hope that the U.S. government will take action to deter foreign dumping and prop up domestic steel prices. Meanwhile, Nucor continues to hike its dividend every year, as it has done since 1974.

• Symbol: HRL
• Share price: $33.94
• 52-week range: $32.90 - $40.00
• Dividend yield: 2%
• Market cap: $18 billion
• Analysts’ opinion: 3 strong buy, 0 buy, 5 hold, 0 underperform, 0 sell

Even if you don’t know Hormel, you certainly know its signature product: Spam. But the canned ham is far from the only company offering you’ll find on supermarket shelves. Other products run the gamut from deli meats to canned chili and stew. Zacks recently cautioned investors about the stock due to slumping turkey prices, which have hampered Hormel’s Jennie-O brand. Management expects the oversupply of turkeys to eat into 2017 profits more than expected. Meantime, Hormel continues its streak of annual dividend increases, which currently stands at 51 years in a row and counting.

• Symbol: CLX
• Share price: $140.12
• 52-week range: $111.24 - $141.76
• Dividend yield: 2.4%
• Market cap: $18 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 10 hold, 1 underperform, 0 sell

Clorox, whose brands include its namesake bleaches, Glad trash bags and Hidden Valley salad dressing, continues to enjoy robust sales and earnings gains in 2017. The upbeat results are being driven in part by new products such as OdorShield trash bags, according to Morningstar, and management expects sales and earnings to stay strong for the rest of the year. Clorox, which boosted its quarterly cash dividend by 5% in May, has raised its dividend annually for 40 consecutive years.

• Symbol: TROW
• Share price: $73.34
• 52-week range: $62.97 - $78.95
• Dividend yield: 3.1%
• Market cap: $18 billion
• Analysts’ opinion: 3 strong buy, 0 buy, 5 hold, 0 underperform, 3 sell

T. Rowe Price faces many of the same challenges as other asset managers; namely, losing market share to indexed funds, particularly the type of low-cost U.S. index funds offered by the likes of Vanguard. The company is managing to offset some of the outflows from its actively managed U.S. funds with more inflows into its international offerings. Rising advisory fees, as well as a strong U.S. stock market that has boosted assets under management, are helping, too. T. Rowe Price has hiked its payout every year for 31 years.

• Symbol: GPC
• Share price: $91.27
• 52-week range: $86.61 - $105.97
• Dividend yield: 2.8%
• Market cap: $14 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 6 hold, 1 underperform, 0 sell

The company is best known for its NAPA Auto Parts chain, which has 6,000 locations in the U.S., but Genuine Parts also makes industrial replacement parts, office products and electrical materials. The business diversity can help fuel growth. In October, it bought Braas Company, a distributor of products and services for industrial automation and control. The deal is expected to generate an extra $90 million a year in sales. A long-time dividend machine, Genuine Parts has bumped up its dividend annually for 61 years in a row.

• Symbol: CTAS
• Share price: $130.07
• 52-week range: $91.24 - $131.41
• Dividend yield: 1.0%
• Market cap: $14 billion
• Analysts’ opinion: 6 strong buy, 0 buy, 4 hold, 0 underperform, 1 sell

Cintas’s business isn’t flashy, but it is a necessity for its customers. The company provides corporate clients primarily in the foodservice, hospitality, automotive and health care industries with uniforms, safety equipment and restroom supplies. Cintas solidified itself as a leader in the space with its $2.2 billion acquisition of rival G&K Services. The deal, which closed in March, gained Cintas an additional 170,000 customers and nearly $1 billion in annual revenues. Since going public in 1983, Cintas has raised its payout to investors every single year.

• Symbol: DOV
• Share price: $80.95
• 52-week range: $63.93 - $84.40
• Dividend yield: 2.1%
• Market cap: $13 billion
• Analysts’ opinion: 4 strong buy, 1 buy, 8 hold, 0 underperform, 0 sell

The global manufacturer operates in four industries: energy, fluids, engineered systems and refrigeration equipment. You might have fueled up your car from one of its gas pumps or bought groceries from one of its refrigerated display cases. Since Dover sells to customers worldwide, unfavorable foreign exchange rates have hurt sales of late. A strong dollar means sales made overseas lose value when converted back into U.S. currency. But that hasn’t stopped the company from maintaining it focus on dividend growth. Dover has recorded 61 straight years of dividend increases.

• Symbol: MKC
• Share price: $101.10
• 52-week range: $88.64 - $107.84
• Dividend yield: 1.9%
• Market cap: $13 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell

McCormick makes the flavoring staples found in many American kitchens, from its extensive line of namesake spices to Lawry’s seasoned salt and Old Bay seasoning. It also markets lesser-known spice blends for making Asian, Latin and other cuisines to home cooks and restaurant chefs worldwide. Business is off to a good start in 2017, with first-quarter profits topping analysts’ expectations. McCormick’s history of paying dividends dates back 93 years, and its track record of raising its dividend annually dates back 31 years.

• Symbol: CINF
• Share price: $72.38
• 52-week range: $68.11 - $79.60
• Dividend yield: 2.7%
• Market cap: $12 billion
• Analysts’ opinion: 0 strong buy, 0 buy, 1 hold, 0 underperform, 1 sell

Cincinnati Financial’s stock performance has gotten off to a disappointing start to 2017. The share price is down 3% year to date, even as Standard & Poor’s 500-stock index is up 9%. Widespread storms in the South and Midwest hurt first-quarter profits at the property and casualty insurer. But short-term operating setbacks didn’t hurt the company’s reliable dividend. Cincinnati Financial has lifted its cash payout annually for 56 years and counting.

• Symbol: PNR
• Share price: $66.49
• 52-week range: $53.80 - $69.03
• Dividend yield: 2.1%
• Market cap: $12 billion
• Analysts’ opinion: 3 strong buy, 0 buy, 9 hold, 1 underperform, 1 sell

Dividend investors will want to keep an eye on all the changes afoot at Pentair. The diversified industrial manufacturer sold its valves and controls business to Emerson Electric (EMR) in April for more than $3 billion. Soon after, management announced plans to split Pentair into two separate companies by the second quarter of 2018. One company will focus on water operations and the other on electrical technology. Quarterly payouts will continue in the meantime, though the dividend will be re-evaluated once the split is completed. Pentair has raised its dividend every year for 41 consecutive years.

• Symbol: GWW
• Share price: $174.66
• 52-week range: $168.58 - $262.71
• Dividend yield: 2.8%
• Market cap: $10 billion
• Analysts’ opinion: 1 strong buy, 0 buy, 10 hold, 0 underperform, 3 sell

W.W. Grainger sells all manner of equipment and supplies to industrial customers. Its product catalog is more than 3,000 pages. But looming online competition from (who else?) Amazon.com (AMZN) has investors nervous and has forced the company to trim prices to stay competitive. First-quarter profits failed to beat analysts' earnings estimates in April, and management warned investors that sales will improve more slowly this year than previously thought. The share price has been falling ever since and is currently one-third below its 52-week high. W.W. Grainger has boosted its annual dividend payout every year for 46 straight years.

• Symbol: FRT
• Share price: $123.84
• 52-week range: $120.50 - $171.08
• Dividend yield: 3.1%
• Market cap: $9 billion
• Analysts’ opinion: 6 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell

Federal Realty Investment Trust is a real estate investment trust that specializes in leasing space to retailers. Its biggest tenants include Ahold, a supermarket operator, discounter TJX Cos. (TJX) and apparel seller The Gap (GPS). And while bricks-and-mortar retail is a shaky industry at the moment, Federal Realty diversifies its risk by leasing to non-retail tenants such as gyms and movie theaters. Since REITs are required to pay out most of their earnings as dividends in exchange for certain tax benefits, they are a go-to source for income. No REIT has been steadier than Federal Realty, which has lifted its payout annually for 49 years in a row.

• Symbol: LEG
• Share price: $52.97
• 52-week range: $44.02 - $54.97
• Dividend yield: 2.7%
• Market cap: $7 billion
• Analysts’ opinion: 2 strong buy, 0 buy, 3 hold, 0 underperform, 0 sell

Leggett & Platt makes components for manufacturers of upholstered furniture, beds and other home furnishings. It’s not a particularly famous name or a particularly glamorous business, but the stock has been a star for long-term shareholders. Shares have more than doubled the return of the S&P 500 over the past 10 years. Leggett & Platt has increased its dividend payout every year for 46 consecutive years. According to the company, dividends rose at a compound annual rate of 13% over that period.

Finding a company with a long track record of consistent dividend payments is only part of the winning formula for investing in dividend stocks. Dividend growth matters, too. Rising dividends not only make a stock more attractive to new income investors, but steady dividend hikes also reward existing investors with increasingly higher yields on shares purchased at lower prices in the past.

It’s an opportune time to target dividend growers, according to Heidi Richardson, an investment strategist for BlackRock. Companies raising dividends are attractive in an aging bull market, when the pace of shareholder-friendly stock buybacks and mergers can slow. Dividend growers, she adds, can also offer an edge when interest rates are going up: "Stocks with a history of consistently growing their dividends have historically tended to perform well and exhibit less volatility in a rising-rate environment." Kiplinger expects at least two Federal Reserve rate hikes in 2017.

Identify reliable dividend stocks by concentrating on the Dividend Aristocrats, 50 companies in Standard & Poor's 500-stock index that have hiked their dividends every year for at least 25 consecutive years. Since size, longevity and familiarity can provide comfort amid market uncertainty, here are the 25 biggest Dividend Aristocrats by market capitalization. Dominated by household names, the list is a good starting point to find high-quality companies for your long-term portfolio.

(Dividend yields and other figures are as of February 8, 2017, unless otherwise indicated. Companies are listed in order of market cap—share price times total shares outstanding—starting with the highest. Analysts’ ratings provided by Zacks Investment Research. The list of 50 Dividend Aristocrats is maintained by S&P Dow Jones Indices.)

• Symbol: XOM
• Market cap: $338 billion
• Dividend yield: 3.7% (S&P 500: 2.1%)
• Analysts’ opinions: 2 strong buy, 1 buy, 11 hold, 0 underperform, 2 sell

A descendant of John D. Rockefeller's Standard Oil, today’s ExxonMobil remains one of the world's largest oil companies and the single largest company among the 50 Dividend Aristocrats. As a dividend stalwart—Exxon has paid a dividend since 1882—it continued to hike its payout even as oil prices declined in recent years. Over the last 34 years, Exxon’s dividend payment has increased at an average annual rate of 6.4%.

• Symbol: JNJ
• Market cap: $309 billion
• Dividend yield: 2.8%
• Analysts’ opinions: 7 strong buy, 2 buy, 9 hold, 0 underperform, 1 sellJohnson & Johnson, founded in 1886 and public since 1944, operates in several different segments of the health care industry. In addition to pharmaceuticals, it makes over-the-counter consumer products such as Band-Aids and Listerine. It also manufactures medical devices used in surgery. Like many health care companies, a radical change in Obamacare under the Trump administration could hurt business, so it's comforting that J&J has raised its dividend every year for 54 straight years.

• Symbol: T
• Market cap: $253 billion
• Dividend yield: 4.7%
• Analysts’ opinions: 5 strong buy, 1 buy, 12 hold, 0 underperform, 0 sellTelecommunications stocks are synonymous with dividend payments. Customers pay for service every month, which ensures a steady stream of cash to fund dividends. AT&T has been raising its dividend every year for more than three decades. It also happens to have one of the highest dividend yields in the entire S&P 500.

• Symbol: PG
• Market cap: $236 billion
• Dividend yield: 3%
• Analysts’ opinions: 6 strong buy, 2 buy, 7 hold, 0 underperform, 1 sellWith major brands such as Tide detergent, Pampers diapers and Gillette razors, Procter & Gamble is among the world's largest consumer products companies. Although the economy ebbs and flows, demand for products such as toilet paper, toothpaste and soap tends to remain stable. That hardly makes the company recession-proof, but it has proven to be a reliable dividend payer for over a century. P&G has paid shareholders a dividend since 1891 and has raised its dividend annually for 60 years in a row.

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• Symbol: CVX
• Market cap: $211 billion
• Dividend yield: 3.9%
• Analysts’ opinions: 10 strong buy, 2 buy, 4 hold, 0 underperform, 0 sellChevron, like its competitors, was hurt when oil prices started to tumble. The company has been forced to slash spending, but—reassuringly—it hasn’t slashed its dividend. The outlook for oil remains uncertain, with Kiplinger forecasting that prices will stay below $60 a barrel at least through the spring. But with 31 consecutive years of dividend growth under its belt, Chevron's track record instills confidence that the payouts will continue.

• Symbol: WMT
• Market cap: $208 billion
• Dividend yield: 2.9%
• Analysts’ opinions: 7 strong buy, 0 buy, 9 hold, 0 underperform, 3 sellThe world's largest retailer isn't conceding the race to Amazon.com, even as the online juggernaut claims an ever-larger piece of the retail pie. Walmart went on the offensive in 2016 by spending more than $3 billion to acquire Jet.com, an up-and-coming online retailer. More recently, Walmart took another jab at Amazon by unveiling free two-day shipping on more than 2 million items—no membership fee required. (Amazon charges $99 a year for a Prime membership, which includes free two-day shipping among other perks.) Walmart has increased its dividend every year since 1974.

• Symbol: KO
• Market cap: $181 billion
• Dividend yield: 3.3%
• Analysts’ opinions: 3 strong buy, 0 buy, 9 hold, 1 underperform, 1 sellCoca-Cola has long been known for quenching consumers’ thirst, but it’s equally effective at quenching investors’ thirst for income. The company has paid a quarterly dividend since 1920, and that dividend has increased annually for the past 54 years. With the U.S. market for carbonated beverages on the decline for more than a decade, according to market research, Coca-Cola has responded by adding bottled water, fruit juices and teas to its product lineup to keep the cash flowing.

• Symbol: PEP
• Market cap: $152 billion
• Dividend yield: 2.8%
• Analysts’ opinions: 8 strong buy, 1 buy, 3 hold, 0 underperform, 0 sellLike Coke, Pepsi is working against a long-term slide in soda sales. It, too, has responded by expanding its offerings of non-carbonated beverages. One advantage Pepsi has is that it also owns Frito-Lay, and demand for salty snacks remains solid. Through the nine months ended Sept. 5, 2016, Frito-Lay's sales rose 3% year-over-year even as Pepsi’s overall sales fell 3%. Founded in 1965, Pepsi has increased its dividend 46 years in a row.

• Symbol: MMM
• Market cap: $106 billion
• Dividend yield: 2.5%
• Analysts’ opinions: 3 strong buy, 0 buy, 7 hold, 0 underperform, 2 sellIndustrial conglomerate 3M, which makes everything from adhesives to electric circuits, has been hurt by the renewed strength of the U.S. currency. Since the company sells its products worldwide, a strong dollar makes 3M’s goods more expensive to overseas buyers and reduces revenue when foreign sales made in local currencies are converted into greenbacks. Foreign-currency translation reduced sales by 1.2% in 2016. Still, the company has weathered tough times before without sacrificing a dividend that dates back a century and has increased annually for 58 consecutive years.

• Symbol: MDT
• Market cap: $104 billion
• Dividend yield: 2.2%
• Analysts’ opinions: 12 strong buy, 1 buy, 8 hold, 0 underperform, 1 sellMedtronic is one of the world’s largest makers of medical devices, ranging from insulin pumps for diabetics to stents used by cardiac surgeons. Look around a hospital and there's a good chance you'll see its products. The company is focused on the health of its shareholders as well as its patients: Medtronic has been steadily increasing its dividend every year over the past four decades.

• Symbol: MCD
• Market cap: $104 billion
• Dividend yield: 2.9%
• Analysts’ opinions: 4 strong buy, 1 buy, 8 hold, 0 underperform, 1 sellThe world's largest hamburger chain also happens to be a dividend stalwart. Changing consumer tastes will always be a risk, but McDonald's dividend dates back to 1976 and has gone up every year since. Fast-food competition remains intense, but in 2017 the company is looking to hold on to the momentum it gained from the introduction of all-day breakfast in the U.S.

• Symbol: ABBV
• Market cap: $98 billion
• Dividend yield: 3.9%
• Analysts’ opinions: 4 strong buy, 1 buy, 8 hold, 0 underperform, 1 sellYou might not recognize the AbbVie name, but its corporate heritage will ring a bell. The pharmaceutical maker was spun off from Abbott Laboratories in 2013. (More on Abbott’s dividend later.) Including its time as part of Abbott, AbbVie has increased its dividend payment for 46 consecutive years. Best-selling treatments include Humira for rheumatoid arthritis and AndroGel, a testosterone replacement therapy.

• Symbol: WBA
• Market cap: $88 billion
• Dividend yield: 1.8%
• Analysts’ opinions: 10 strong buy, 2 buy, 4 hold, 0 underperform, 0 sellThe nation's largest drugstore chain by store count is about to get even bigger. A deal to buy Rite Aid is expected to close later this year, adding thousands more locations to the 13,000-plus stores that Walgreens already operates in 11 countries. Tracing its roots back to a single drugstore founded in 1901, Walgreens has boosted its dividend every year since 1975. It merged with Alliance Boots in 2014 to form the current company.

• Symbol: ABT
• Market cap: $73 billion
• Dividend yield: 2.5%
• Analysts’ opinions: 10 strong buy, 1 buy, 4 hold, 0 underperform, 0 sellFollowing its 2013 spin-off of AbbVie, another Dividend Aristocrat on this list, today’s Abbott is focused on branded generic drugs, medical devices, nutrition and diagnostic products. The company, which dates back to 1888, first paid a dividend in 1924. Abbott has raised its dividend for 46 straight years.

• Symbol: LOW
• Market cap: $63 billion
• Dividend yield: 1.8%
• Analysts’ opinions: 7 strong buy, 2 buy, 9 hold, 0 underperform, 0 sellHome improvement chain Lowe’s has paid a dividend every quarter since going public in 1961, and that dividend has increased annually for more than half a century. Rival Home Depot is also a longtime dividend payer, but its string of annual dividend increases only dates back to 2009. In a sign that Lowe’s has plenty of excess cash to support ongoing dividend hikes, the company recently announced plans to spend up to $5 billion on share repurchases.

• Symbol: CL
• Market cap: $59 billion
• Dividend yield: 2.3%
• Analysts’ opinions: 1 strong buy, 1 buy, 12 hold, 0 underperform, 0 sellSelling staples ranging from toothpaste to dish detergent, demand for Colgate-Palmolive’s products tends to remain stable in economies both good and bad. However, the company derives the vast majority of its sales from outside the U.S., making it vulnerable to a strong dollar like the one we have today. (The value of foreign sales gets diminished when local currencies are converted into dollars.) Over the long haul, however, you can count on Colgate’s dividend, which dates back more than a century to 1895 and has increased annually for 53 straight years.

• Symbol: GD
• Market cap: $55 billion
• Dividend yield: 1.7%
• Analysts’ opinions: 10 strong buy, 1 buy, 3 hold, 0 underperform, 0 sellDefense contractor General Dynamics is one of the newest members of the Dividend Aristocrats, having been added to the elite list of dividend growers at the end of January. Shares in the company are up 19% since the November presidential election, and analysts are generally bullish on its prospects under the new Trump administration. With a payout ratio of just 31%—the payout ratio reflects dividends as a percentage of net income—General Dynamics should have ample room for more dividend hikes. The S&P 500 has an average payout ratio of 40%.

• Symbol: ITW
• Market cap: $45 billion
• Dividend yield: 1.9%
• Analysts’ opinions: 7 strong buy, 0 buy, 6 hold, 0 underperform, 0 sellFounded in 1912, Illinois Tool Works makes construction products, car parts, restaurant equipment and more. Cost cuts, asset sales and share buybacks helped its stock rise 41% over the past year vs. a 24% gain for the broader market. Illinois Tool Works has hiked its dividend every year since 1964.

• Symbol: KMB
• Market cap: $44 billion
• Dividend yield: 3%
• Analysts’ opinions: 0 strong buy, 0 buy, 8 hold, 1 underperform, 1 sellKimberly-Clark's brands include Huggies diapers and Kleenex tissues. Like other makers of staple consumer products, Kimberly-Clark holds out the promise of delivering slow but steady growth along with a healthy dividend to drive total returns. Sales slowed down in 2016, in part due to heavier competition, but they're expected to rebound a bit in 2017. Kimberly-Clark has raised its dividend annually for the past 45 years.

• Symbol: ADP
• Market cap: $43 billion
• Dividend yield: 2.2%
• Analysts’ opinions: 5 strong buy, 0 buy, 10 hold, 1 underperform, 1 sellIf you get a paycheck, you probably know Automatic Data Processing. It's the world's largest payroll processing firm, with 56,700 employees in the U.S. and overseas. One of its great advantages is its "stickiness." It's difficult and expensive for corporate customers to change payroll service providers. In addition to that competitive advantage, ADP has been a dependable dividend payer, with annual raises for shareholders since 1976.

• Symbol: EMR
• Market cap: $40 billion
• Dividend yield: 3.1%
• Analysts’ opinions: 3 strong buy, 0 buy, 11 hold, 0 underperform, 2 sellEmerson Electric makes a wide variety of industrial products, ranging from control valves to electrical fittings. The prolonged downturn in oil prices weighed on Emerson last year, as energy companies continued to cut back on spending. However, the company reported some improvement in orders from North American energy customers toward the end of 2016. Emerson has boosted its dividend payout for 60 straight years.

• Symbol: BDX
• Market cap: $38 billion
• Dividend yield: 1.5%
• Analysts’ opinions: 8 strong buy, 1 buy, 5 hold, 0 underperform, 0 sellMedical-devices maker Becton, Dickinson bulked up with its 2015 acquisition of CareFusion, a complementary player in the same industry. The company is increasingly looking for growth to be driven by markets outside the U.S., including China. Annual dividend increases stretch back 45 years and counting, a track record that should offer peace of mind to antsy income investors.

• Symbol: TGT
• Market cap: $36 billion
• Dividend yield: 3.6%
• Analysts’ opinions: 5 strong buy, 0 buy, 8 hold, 0 underperform, 2 sellThe number-two discount retail chain after Walmart recently had to cut its latest profit and sales forecasts due to some disappointing developments during the holiday shopping season. A generally weak retail environment is also weighing on sales, but investors can still have confidence in the dividend. Target paid its first dividend in 1967, seven years ahead of Walmart, and has raised its dividend annually since 1971.

• Symbol: ECL
• Market cap: $35 billion
• Dividend yield: 1.2%
• Analysts’ opinions: 7 strong buy, 0 buy, 6 hold, 0 underperform, 1 sellCount Ecolab as yet another company grappling with a strong dollar and the effects of low oil prices. It provides water treatment and other industrial-scale maintenance services for the oil and gas industry. Like Emerson Electric, another Dividend Aristocrat on this list, Ecolab's fortunes can wane when energy companies pare spending. Over the long haul, though, this stock has proven to be a winner, thanks in no small part to a dividend that dates back 80 years. According to Ecolab, this is its 25th consecutive year of dividend growth.

• Symbol: APD
• Market cap: $30 billion
• Dividend yield: 2.5%
• Analysts’ opinions: 8 strong buy, 0 buy, 5 hold, 0 underperform, 0 sellAir Products and Chemicals spent much of last year restructuring, spinning off some businesses under pressure from investors. The slimmed-down company now focuses on industrial gases. Air Products was founded in 1940 and has raised its dividend annually for 35 years in a row.

It’s been a strange year for high-yielding stocks. In the first half of 2016, the Dow Jones utility average, a proxy for hefty dividend payers, was a market leader, rising 26%. Since then, however, it has tumbled 6%. And it has been a notable laggard during the post-election rally, falling 1% since November 8, while the broad market, as measured by Standard & Poor’s 500-stock index, advanced 6%.

What’s a yield-seeking investor to think now, with a lot of hot money chasing stocks that should benefit from rising rates (such as financials) and faster economic growth (such as industrial manufacturers and producers of steel, copper and other materials)?

Portfolio managers suggest that in this environment it makes sense to invest in companies that should deliver both above-average dividend growth and above-average earnings. We analyzed the 65 stocks in the Dow Jones industrial, transportation and utility averages and came up with 10 that meet those criteria and should provide investors with solid returns. We focused on this universe because inclusion in one of the Dow averages is a testament to a company’s size and financial strength. The market capitalization of the smallest company on our list is $55.7 billion.

The stocks have an average yield of 2.7%, and all but one yield more than the average 2.1% yield of the S&P 500 index.

Our picks are listed in descending order of their dividend yield. All figures are as of December 20. Revenues are for the past 12 months. Price-earnings ratios are based on estimated year-ahead earnings, starting with the current quarter.

• Symbol: CVX
• Price: $117.95
• Market capitalization: $222.9 billion
• Annual revenues: $112 billion
• Estimated 2017 earnings growth: 313%
• Price-earnings ratio: 23
• Dividend yield: 3.7%

If you’re bullish on oil prices, Chevron is attractive, says Paul Franzen, a senior analyst with the Commerce Value Fund. And it looks much more appealing than ExxonMobil (XOM), the world’s biggest publicly traded energy company and also a member of the Dow Jones industrials.

Chevron should see annual production of oil and gas rise by 5% over the next three years, compared with 1% per year for Exxon. In addition, Exxon has a lot of exposure to refining and chemicals, which Chevron does not. That would be a relative plus for Chevron because rising crude prices pressure refining and chemical profits.

Chevron has a number of assets that should deliver solid returns with oil prices back in the $50-a-barrel area and perhaps heading higher. One particularly attractive holding is the roughly 2 million acres it owns in the Permian Basin in Texas and New Mexico, the second-largest oil field in the world. Analyst Pavel Molchanov of Raymond James thinks this holding could be worth $30 billion, or about 14% of the company’s market cap.

Beyond the Permian Basin, one of Chevron’s two huge liquefied natural gas facilities in Australia just went online, and the other one will go online soon. Another advantage for Chevron is that a relatively small amount of its assets are in global hot spots or politically unattractive locations. For instance, only 2% of its reserves are in the Middle East (compared with 13% for its competitors, other enormous multinational energy companies), and none are in Russia (compared with 12% for its rivals).

Don’t put too much stock in the 313% earnings growth that analysts expect Chevron to deliver next year. The figure is large because profits remained depressed in 2016 due to the recent crash in oil prices. By the same token, because of the profit slump, Chevron’s unappetizing price-earnings ratio is inflated by weak profits. Even during tough times, though, Chevron has been a generous dividend payer. It has boosted its payout by an average of 9% annually since 2005.

Ultimately, the price of oil will be the key driver of Chevron’s share price. Molchanov, who thinks oil will average $80 a barrel in 2017, compared with $52.40 today, says Chevron is more sensitive to crude prices than its main competitors. “It’s good to be oily,” he says.

See Also: 27 Best Stocks to Buy Now for 2017

• Symbol: CSCO
• Price: $30.56
• Market capitalization: $153.4 billion
• Annual revenues: $48.9 billion
• Estimated earnings growth in the fiscal year that ends in July 2017: 1.3%
• Price-earnings ratio: 13
• Dividend yield: 3.4%

The networking giant’s stock price is almost exactly where it was 10 years ago. Growth remains sluggish, with revenues having climbed just 1% in the first quarter of fiscal 2017 (ending in October) over the same period a year earlier.

Tax cuts favored by President-elect Donald Trump, including a lower corporate tax rate and a cut in taxes on profits repatriated from outside the U.S., would help Cisco, but there are other reasons to like the stock. Cisco is beginning to emerge as a network-security powerhouse. That business generated $2 billion in revenues in fiscal 2017, and security revenues rose 11% in the August-October quarter. Granted, many old tech companies, such as Microsoft (MSFT), are heralding their security chops, but Cisco’s annual haul is already bigger than that of Palo Alto Networks (PANW), the leading standalone security firm.

In the switching and router markets, meanwhile, Cisco is fighting against companies making hot new machines and others just trying to replicate Cisco’s offerings at a lower price. Cisco’s solution? It is trying to bundle software with its hardware and convince customers to pay for the software via an annual subscription payment. Overall, subscription revenues grew by 33% in the fiscal year that ended in July 2016, and Cisco now derives half of its security revenues from software or by subscription (the rest is from hardware sales). “The strategy is working,” says Jennifer Chang, manager of the Cullen High Dividend Equity Fund.

Chang thinks the company can deliver mid- to high-single-digit earnings growth over the next three to five years. “The dividend can grow even faster,” she says. In fact, Cisco in February raised its quarterly payout by an eye-popping 24%. And the stock looks cheap, selling for 30% less than the S&P 500’s P/E of 17.

• Symbol: NEE
• Price: $119.30
• Market capitalization: $55.7 billion
• Annual revenues: $16.5 billion
• Estimated 2017 earnings growth: 5.8%
• Price-earnings ratio: 19
• Dividend yield: 2.9%

Some people might think the election results precipitated a perfect storm for NextEra Energy. As a member of the Dow utility average, not only is the stock sensitive to interest rates—which have been rising since Election Day—the company is also the utility sector’s renewable-energy leader. And Trump seems to favor fossil fuels much more than renewable energy sources, such as wind and solar.

NextEra’s stock has fallen nearly 4%% since the election. But that may not be just an overreaction; instead, it may be a move in the wrong direction. Many of the tax credits that the company—and its customers—get for solar and wind projects will last through the end of 2019, then start to phase out, eventually disappearing at the end of 2022. And many wind and solar projects make economic sense without any tax credits at all.

In addition to serving fast-growing Florida, NextEra has grown by signing 20-year energy deals with industrial clients such as General Electric (GE). Many more agreements should follow. The company expects its earnings per share to rise by 6% to 8% a year through 2018, with dividends growing considerably faster, at an annual rate of 12% to 14%.

See Also: 8 Great Dividend-Paying Stocks in the Russell 2000 Index

• Symbol: JNJ
• Price: $115.66
• Market capitalization: $314.6 billion
• Annual revenues: $71.6 billion
• Estimated 2017 earnings growth: 5.2%
• Price-earnings ratio: 17
• Dividend yield: 2.8%

If you’re worried that drug prices might be subject to government price controls but still want to own a large pharmaceutical company, you’ll be hard-pressed to find a better choice than Johnson & Johnson. That’s because in J&J’s most recently reported quarter (July-September), the company derived only 47% of its sales from drugs. Medical devices accounted for 35%, and consumer products, such as Band-Aids, Listerine and Tylenol, were responsible for the rest.

And if you are looking for dividend growth and dependability, you need look no further. J&J has increased its annual payout for 53 consecutive years. A tax cut on repatriated earnings might help boost the payout further, given that almost all of the more than $40 billion in cash and securities on J&J’s balance sheet is held overseas.

With revenues and earnings expected to grow at a mid-single-digit rate over the next few years, it is reasonable to expect annual dividend growth of 6% to 8%. J&J has achieved $1 billion in productivity gains over the past three years. And in January, it announced that it would eliminate 3,000—or 6%—of the jobs in its medical-devices division.

Bears worry about the loss of J&J’s patent for the company’s top-selling drug, Remicade, a rheumatoid arthritis treatment that generates $6.6 billion in annual sales. After a judge invalidated the patent in August, Pfizer introduced a rival drug (called a biosimilar because it is made from biological components) in November. But Pfizer priced the drug only 15% lower than Remicade, less of a discount than investors initially feared. And J&J says that it has positioned itself to withstand the assault, noting that patients with commercial insurance pay just $5 per dose with a Remicade co-pay card (a discount card issued by the drug’s manufacturer) and that 48% of Remicade patients with commercial insurance have no co-pay whatsoever.

Analysts say J&J has a strong pipeline of drugs in development, so the company, which was founded 130 years ago, may have another century or two of growth ahead of it. And, who knows, it might raise its dividend annually for the next 53 years as well.

• Symbol: UPS
• Price: $117.52
• Market capitalization: $81.0 billion
• Annual revenues: $60.0 billion
• Estimated 2017 earnings growth: 5.2%
• Price-earnings ratio: 19.6
• Dividend yield: 2.7%

Known as Brown, for the color of its ubiquitous trucks and the uniforms of their drivers, UPS is a powerhouse not just in the U.S. Only three companies move packages internationally—FedEx (FDX) and DHL are the others—and UPS is by far the most efficient. Plus, overseas revenues are growing faster than in the U.S. From 2016 to 2019, the company expects revenues in the U.S. to rise by 5% to 6% a year, compared with international revenue growth of 6% to 9% annually. It expects earnings to increase by 9% to 13% annually.

Another plus for UPS: It pays a high federal corporate tax rate of 34% to 36%, so it could benefit from tax reform. “It is one of the reasons you could see profit-margin expansion,” says Matt Moulis, manager of the Fidelity Select Transportation Fund, which has UPS as its second-largest holding. Moreover, he says, “a significant portion of the business is recurring, including the shipment of staples and holiday gifts.”

Since going public in 1999, UPS, a member of the Dow transportation average, has lifted its dividend at a 10% annual pace. Expect that to continue.But what about future competition from Amazon, which has been buying cargo planes of late? So far, it seems the e-commerce giant is simply trying to find a way to make on-time deliveries at peak gift-giving times. Still, e-commerce now accounts for more than 40% of UPS business, and investors have to be alert to changes afoot at Amazon. But UPS has shown it can be flexible. To execute “not-at-home” deliveries, it has created 27,000 worldwide access points where customers can pick up their packages.

• Symbol: MSFT
• Price: $63.54
• Market capitalization: $494.3 billion
• Annual revenues: $85.4 billion
• Estimated 2017 earnings growth in the fiscal year that ends in June 2017: 1.1%
• Price-earnings ratio: 22
• Dividend yield: 2.5%

At Microsoft’s last shareholders meeting, in November, CEO Satya Nadella said that by 2025 the world will produce 180 zettabytes of data. (A zettabyte is sextillion bytes, or 10 to the 21st power bytes.) No wonder the world needs the cloud. And Microsoft’s mastery of the cloud is a big part of the company’s growth story. “Microsoft’s cloud is now competitive with Amazon Web Services,” says Ramona Persaud, manager of the Fidelity Dividend Growth Fund.

At the end of the fiscal year that ended June 30, Microsoft was generating cloud revenue at an annualized rate of more than $12 billion, an increase of slightly more than 50% from the previous year. Nadella says cloud revenue will reach $20 billion by the fiscal year that ends in June 2018. As the business expands, profit margins should improve.

Other parts of the business are also prospering and offsetting weak sales of operating systems and applications software for the stagnant personal computer market. Sales of the Surface tablet rose by 65% in fiscal 2016, to $3.6 billion; 49 million customers subscribe monthly to Xbox Live; and search engine Bing just became profitable. Analysts also think Microsoft will be able to find new sources of revenue from LinkedIn, the business- and employment-oriented social network that it recently purchased for $26 billion.

Analysts and fund managers are effusive in their praise for Nadella, who became CEO in 2014. “Nadella is very shareholder-friendly,” says Fidelity’s Persaud. And investors may soon realize just how friendly. Microsoft has $137 billion in cash and securities on its balance sheet, almost all of it held abroad. If the tax on repatriated earnings is reduced, Microsoft shareholders are likely to see more dividend increases and share buybacks.

• Symbol: UTX
• Price: $110.65
• Market capitalization: $91.1 billion
• Annual revenues: $57 billion
• Estimated 2017 earnings growth: -0.6%
• Price-earnings ratio: 17
• Dividend yield: 2.4%

If you screen for companies that are expected to generate superior earnings growth in 2017, you won’t find United Technologies. In fact, profits at the industrial conglomerate—which owns, among other things, aircraft-engine maker Pratt & Whitney, Otis Elevator and Carrier, the maker of heating and air-conditioning systems—are likely to be flat to down next year, with revenues climbing only modestly.

The culprit, says Don Taylor, manager of the Franklin Rising Dividend Fund, is Pratt & Whitney’s investment in its new PurePower Geared Turbofan jet engines, which reduce fuel use and ground noise in jetliners. The revolutionary jet engine burns 16% less fuel than conventional engines and reduces noise by 75%, while also significantly cutting carbon dioxide emissions. The company has invested about $10 billion in the new engines, and sales are just starting to ramp up.

United Technologies is well-positioned to benefit from the growth of commercial aviation all over the world. Increased defense spending during a Trump administration would also help. The company projects that Pratt & Whitney sales will rise at an annual rate of 10% or more from 2016 through 2020. And the company is optimistic about its other divisions as well. It sees annual sales gains of 5% to 7% in aerospace systems, 4% to 5% in climate controls and security (in addition to providing heating and cooling systems, the company is a key player in the creation of intelligent, energy-efficient buildings), and 4% to 5% for Otis elevators, escalators and moving walkways. If those growth targets are achieved, United Technologies should deliver double-digit earnings growth and raise its dividend by 8% to 9% a year starting in 2018.

United made headlines recently because of the deal its Carrier division struck with President-elect Trump and Vice President-elect Mike Pence, still Indiana’s governor, to keep some jobs at Carrier’s Indiana furnace plant. How this drama will play out for Carrier and the rest of United Technologies once Trump and Pence take office remains uncertain. In the meantime, investors can pick up this blue-chip industrial company, which will benefit from any pickup in global growth, at a reasonable price.

• Symbol: JPM
• Price: $86.53
• Market capitalization: $309.8 billion
• Annual revenues: $104.2 billion
• Estimated 2017 earnings growth: 9.8%
• Price-earnings ratio: 14
• Dividend yield: 2.2%

Like other financial stocks, JP Morgan has been on a tear since the election, rising 24%. But it may not be too late to hop aboard. The company should benefit from rising interest rates and less-demanding regulation, as well as faster economic growth, if that materializes. As its business has improved, the banking giant has been adding capital to its balance sheet. Each year, regulators have been allowing the bank to return more cash to shareholders, a trend that should continue, with a positive impact on dividends and stock buybacks.

If the corporate tax rate goes down to 20%, JP Morgan’s earnings, by one estimate, would rise by about 20%. And if the Federal Reserve does indeed raise short-term interest rates three times in 2017, as it recently suggested it would, that would also boost the bank’s earnings and, presumably, its stock price. More good news: CEO Jamie Dimon told the Wall Street Journal recently that JPMorgan’s bond-trading business has been much stronger lately. Bond-trading revenues have dropped 35% from their 2009 peak, and Dimon now thinks the company can recover half of that decline.

In evaluating JP Morgan, it’s important to recognize that European bank regulators have been tougher than their counterparts in the U.S. This has given JP Morgan a big edge over rivals such as Barclays (BCS) and Deutsche Bank (DB). Another positive that hasn’t shown up in earnings yet but may someday is the slew of dreadful headlines earned by competitor Wells Fargo (WFC). “JP Morgan is the best of the big banks,” says Commerce Value’s Franzen.

• Symbol: UNP
• Price: $104.65
• Market capitalization: $86.2 billion
• Annual revenues: $20.0 billion
• Estimated 2017 earnings growth: 10.3%
• Price-earnings ratio: 19
• Dividend yield: 2.3%

Like other railroads, Union Pacific has had a grim 2016, a result of low energy prices. Industrywide, the number of carloads fell 6.9% in the first nine months of 2016 (compared with the first nine months of 2015), with coal and oil shipments leading the decline. Union Pacific stock is 15% off its record high, set in February 2015.Cheap energy prices have been hurting Union Pacific in two ways. Low prices led many power plants to shift to natural gas instead of coal. And low gasoline prices made truckers a more attractive alternative for the shipment of some goods.

But with the rise in the price of natural gas and oil, analysts have become more bullish on Union Pacific and, on average, are calling for a 10% earnings gain next year. And that estimate may be low if the economy turns out to be stronger than expected and oil prices rise further or even remain stable.

The company handled the downturn wisely, reducing capital expenditures in the face of declining demand. But UP continued to reward shareholders, raising its dividend by 10% and boosting its share repurchase plan. The company has bought back 305 million shares since 2007 at an average price of $59.63, well below the current level. Union Pacific’s high tax rate may also make it an attractive investment. Its 2015 tax rate was 37.7%, so it could see a significant earnings pop if corporate tax rates are reduced.

New federal regulations on truckers may also help the company. By the end of 2017, the nation’s truckers will have to install an electronic logging device that will monitor vehicle speeds and locations. That will make it much harder for a driver to spend more hours on the road in a day than regulations permit.

• Symbol: DD
• Price: $75.26
• Market capitalization: $65.4 billion
• Annual revenues: $24.7 billion
• Estimated 2017 earnings growth: 13.4%

Price-earnings ratio: 21

Dividend yield: 2.0%

DuPont is not your grandfather’s chemical company. Today, 45% of its revenues come from agriculture, with another 10% from its electronics and communications division.

McKinsey & Company projects that crop demand for human consumption and animal feed will at least double by 2050. Given that 20% of what used to be farmland is no longer available for that purpose because of erosion and pollution, according to McKinsey, companies, such as DuPont, that improve agricultural efficiency will become increasingly valuable.

DuPont is also profiting from the trend toward healthier eating. It is a major player in nutritional additives, including vitamins. It is also helping dieters. When combined, two of its additives—Supro Soy Protein and Litesse dietary fiber—make consumers feel fuller for longer after a meal, thus reducing their cravings for more food. Meanwhile, the stock is actually cheaper than its P/E of 21 suggests. DuPont is scheduled to complete its merger with Dow Chemical (DOW) in the first quarter of 2017. If the two companies were combined today, they would have a blended P/E of 17 and a combined dividend yield of 2.6%. Moreover, in late 2018 or early 2019, the chemicals behemoth will become three separate public companies: One will focus on agriculture; the second, material sciences (among other things, this unit creates new materials, such as DuPont’s Kevlar bulletproof vests); and the third, specialty products in nutrition and electronics.

Bill Selesky, a senior analyst at Argus Research, is bullish on DuPont. He thinks the merger will help DuPont and Dow realize $3 billion in cost cuts and at least $1 billion in additional revenues. “The two companies are talking about raising the dividend,” he says, “and some major trends should help them. The world’s population will grow from 7.3 billion today to 9.7 billion by 2050, which should significantly benefit its huge agriculture business."

QUIZ: How Well Do You Know Dividends?

What is a value stock, really? “I know it when I see it,” says Robert Waid, who heads up the index business at investment consulting firm Wilshire Associates. “It’s like the difference between pornography and art.”

All kidding aside, Waid admits that determining what constitutes a bargain stock—and its counterpart, a growth stock—is complicated. In simplest terms, a value stock is one that is cheap in relation to such basic measures of corporate performance as earnings, sales, book value and cash flow. Examples of what are commonly viewed as value stocks are Citicorp (C), ExxonMobil (XOM)and JPMorgan Chase (JPM). Growth companies, by contrast, boast rapidly expanding profits and revenues, and their stocks typically command high valuations. Think Amazon.com (AMZN) and Facebook (FB).

Several firms, including Wilshire and S&P Dow Jones Indices, maintain indexes that divide the stock market into growth and value segments. They do so by ranking stocks on a variety of factors, such as profit and sales growth, price-earnings ratios, and so on. Financial and energy stocks tend to fall in the value camp; technology and health care land in the growth group./p>

But there’s plenty of room for interpretation. Are Alphabet (GOOGL) (the former Google) and Microsoft (MSFT) growth stocks or value stocks? Apparently, they are both. Dodge & Cox Stock (DODGX), a classic value fund, and Harbor Capital Appreciation (HACAX), which focuses on fast growers, own both stocks.

As once-small firms turn into behemoths, growth companies often turn into value stocks. That was certainly the case with such former technology luminaries as Cisco Systems, EMC and Intel. And that may be happening today with Apple (AAPL) and biotech giant Gilead Sciences (GILD). At its June 30 close of $96, Apple was selling for 11 times estimated year-ahead earnings, and Gilead, at $83, was trading for a seemingly absurd 7 times forecast profits. The overall U.S. stock market sells for 17 times estimated earnings. And although earnings growth at both companies has stalled, index sponsors for the most part still consider both firms to be growth stocks.

Until April 26, only three publicly traded companies warranted a coveted triple-A bond rating. But on that day, the number fell to two when Standard & Poor’s downgraded the rating of ExxonMobil (symbol XOM) to double-A-plus. How did stock investors react? Essentially by letting out a collective yawn. The stock actually rose on the day the downgrade was announced, by all of 30 cents a share.

Sure, the energy giant’s debt load has more than tripled over the past two years. And yes, lower oil prices drag down the bottom line. But this is Exxon we’re talking about—a company that supplies about 4% of the world’s energy needs, producing the equivalent of more than four million barrels of oil and natural gas a day. Most energy producers would be thrilled to earn a double-A rating. S&P may have landed a punch with its downgrade, but it will take a lot more than that to knock down Exxon’s stock. (Moody’s, which continues to rate Exxon triple-A, put it on a negative ratings outlook in February and may be next to downgrade the firm. The other remaining triple-A-rated companies, according to both S&P and Moody’s, are Johnson & Johnson and Microsoft.)

In fact, Exxon is one of the few stocks likely to deliver solid returns for the next decade or more. With a market value of $367 billion, the Irving, Tex.-based firm towers over every other energy producer, both globally and in the U.S. Analysts expect the company to haul in $222 billion in revenues this year. That’s down sharply from record sales of $468 billion in 2011, but it still beats almost every other company on the planet. At current production rates, the firm’s proven oil-and-gas reserves would last for the next 16 years.

Smaller energy companies offer more growth potential. And their stocks would surge much more if oil prices jump back to $70 per barrel or more, up from the current price of $45.30. Yet most major producers have posted steep losses as oil prices crashed, taking their stocks down by 30% or more. Exxon has managed to stay profitable, reporting $16.1 billion in net income last year. The stock, at $88.49, has held most of its value, too, trading just 15% below its all-time high of $104 a share, reached in June 2014. (All current prices are as of April 27.)

A good source of dividend income

Amid the carnage in the oil patch, Exxon even managed to hike its dividend in 2015—the 33rd straight year it had done so. Its stock now yields 3.3%, well above the 2.2% yield of Standard & Poor’s 500-stock index. Exxon announced another dividend increase on April 27, hiking its quarterly payout from 73 cents a share to 75 cents. Although profits have come down sharply, the company reported first-quarter results on April 29 that beat Wall Street forecasts.

Even though Exxon may not have much growth in its tank, the company should generate piles of cash. Indeed, oil doesn’t have to budge much above current prices for Exxon to maintain current production levels and fund its dividend with profits from oil-and-gas and refined product sales through 2020, according to Bank of America Merrill Lynch. If the price of oil rebounds into the $70s, Exxon’s financial picture would look much brighter.

Exxon does face some steep challenges. After spending heavily on acquisitions, share buybacks and production in recent years, Exxon now carries an estimated $36.2 billion in long-term debt, up from $11.7 billion in 2014—one reason S&P downgraded the firm. That wouldn’t be so bad if the company wasn’t spending more than it’s making on an operating basis. Yet Moody’s expects Exxon’s capital expenses and dividends to exceed its operating cash flow by about $10 billion in 2016. Moody’s expects Exxon to remain in the hole in 2017, albeit at a diminished level.

The future looks bright

Long-term, Exxon will have to spend more heavily to replenish its reserves. Exxon replaced just 67% of its reserves in 2015, largely because of a decline in natural-gas drilling in North America. The company has replaced 115% of reserves over the past decade, and it will need to boost drilling sharply just to replenish 100% of the oil and gas it extracts.

Buying smaller energy producers or snapping up their assets would help the firm refill its coffers. Still, Exxon cut spending on exploration and production as oil prices sank; the company plans to shell out $23.2 billion this year, down from $31.1 billion in 2015. Eventually, Exxon will have to make acquisitions or ramp up spending, potentially choking profits if oil prices don’t climb.

Yet even in a low-price environment, Exxon’s competitive advantages should help it thrive. The firm’s cost of producing a barrel of oil or the equivalent amount of gas is lower than that of most major competitors. Its return on capital (a measure of profitability) has beaten every other big rival in recent years. Exxon’s refinery system—capable of processing 6.4 million barrels of crude oil a day—also benefits from lower oil prices, helping the firm’s overall profits stay afloat.

Exxon is likely to be the sole major producer to report a profit in the first quarter of 2016, says Merrill Lynch. Exxon earned 43 cents a share in the quarter. That’s a steep 63% decline from the $1.17 a share the firm earned in the same period a year earlier. Yet Exxon’s profits stand in sharp contrast to the rest of the industry, which is likely to be in the red.

Exxon will never be a sizzler in the energy patch. But the firm’s diversified businesses and financial resilience should make it a solid long-term bet. Over the past 15 years through April 27, the shares returned an annualized 6.4%, including dividends, compared with 5.2% annualized for the average large diversified energy company, according to Morningstar. Assuming that the world doesn’t stop burning fossil fuels, Exxon’s returns over the next 15 years shouldn’t be any different.

Two bucks buys you a gallon of gas in many parts of the country these days. But if you think that’s a bargain, check out the deals on energy stocks, which haven’t looked this attractive since the mid 1980s, when Dallas’s J.R. Ewing was scheming to crush his enemies and expand his empire.

Collapsing crude prices have vaporized energy-company profits, pushing down stocks in the sector by 12% in the past year. But the sell-off may have gone too far. Today, stocks of large energy companies trade at an average of 1.6 times book value (assets minus liabilities). That’s 33% below the sector’s 30-year average price-to-book-value ratio of 2.4, according to Bank of America Merrill Lynch. (The situation is similar to the mid 1980s, when a supply glut pushed the price of a barrel of oil to less than $10.) If book values return to normal, Merrill Lynch says, energy stocks could climb about 50% from here.

Granted, oil won’t miraculously jump back to $100 a barrel tomorrow. Kiplinger forecasts that West Texas Intermediate crude will fetch $45 to $55 a barrel in 2016, up only slightly from the current price of $40. Producers are simply pumping too much oil for global economies to absorb. And even with demand at record highs, global oil stockpiles recently hit a record 3 billion barrels—a “massive cushion” that won’t be relieved soon, according to the Paris-based International Energy Agency.

Yet it doesn’t take a leap of faith to see prices gradually recovering. Companies are drilling far fewer wells in North America. U.S. oil production has slumped from a peak of 9.6 million barrels a day last June to an estimated 9.2 million in November. Companies have also scaled back sharply on drilling and exploration in high-cost areas, such as the Arctic and deep-water regions of the Gulf of Mexico. The upshot: Supplies aren’t likely to increase as fast in the future, bringing the market closer to equilibrium and supporting higher prices.

Even if oil doesn’t recover to $80 a barrel or more, many energy companies can fare well. Below are our seven top picks, starting with the biggest producers, followed by smaller oil drillers and other players in the energy patch, such as refiners and gas-pipeline stocks. As a bonus, all but one of our picks deliver above-average dividend yields. Clean-energy companies, such as solar-panel makers, didn’t make our cut because the businesses still look too speculative. (All prices are as of November 30.)

1. ExxonMobil (symbol XOM, $82, yield 3.6%) Exxon, the supertanker of energy stocks, earns money from both oil-and-gas production, known as the upstream part of an energy company, and such downstream businesses as refining and gas stations. By the time the books are closed on 2015, revenues are expected to have tumbled by 38%, to an estimated $255 billion. But Exxon is getting leaner, slashing operating costs and trimming its budget for new projects to help shore up profits. Exxon is also one of only three publicly traded companies with a higher credit rating than Uncle Sam (though Standard & Poor’s says it may trim the firm’s triple-A rating within the next two years).

Exxon’s oil-and-gas production isn’t rising as fast as that of smaller companies. But Exxon still aims to boost 2017 production by 5% from 2015 levels. The business has historically earned higher returns on capital (a measure of profitability) than major rivals. And Exxon’s financial strength gives it flexibility to buy distressed companies with assets that could boost its bottom line.

Exxon also pays investors to wait for a rebound with a dividend that’s sacrosanct. Even with profits expected to plunge 46% in 2015, the company hiked its payout by 5.8% in April, pushing its streak of annual dividend increases to 33 years.

2. Chevron (CVX, $91, 4.7%) Chevron, another colossus, made some massive bets in recent years, plowing more than $107 billion into projects ranging from a liquefied natural gas plant in Australia to oil wells off the coast of West Africa. With several of those projects now up and running, the payoff to investors should be on the way. Chevron expects to boost oil-and-gas production by 13% to 15% in 2016 and in 2017, propelling earnings from an estimated $3.32 per share in 2015 to $6.04 in 2017.

In the near term, Chevron isn’t making enough money to fully cover its dividend. But CEO John Watson says his priority is to keep payments intact and raise the dividend over time. To bridge the funding gap, the company is scaling back on natural-gas drilling in the U.S. and on other projects, and it’s cutting its budget for oil-and-gas development from an estimated $35 billion in 2015 to no more than $28 billion in 2016. Those moves should help shore up its finances until 2017, when Chevron expects free cash flow (cash flow minus the capital expenditures needed to maintain or expand the business) to cover its dividend. Chevron’s strength remains its “steady plan” to engage in projects with high profit margins, says Deutsche Bank, which rates the stock a “buy.”

3. Occidental Petroleum (OXY, $76, 4%) One of the largest domestic energy companies, Occidental is like a “mini major,” with a mix of oil-and-gas production, pipelines and chemical refineries. Its balance sheet is relatively healthy, with $6.8 billion in long-term debt offset by $2.5 billion in cash. Moreover, although most domestic drillers are spending more on capital projects than they are generating in cash flow simply to keep production flat, Oxy should be able to both boost production and deliver robust levels of free cash flow, says BMO Capital Markets.

Underpinning its business, Oxy owns a deep inventory of wells in the Permian region of Texas and New Mexico, one of the areas in the U.S. that is most conducive to the economic production of oil. If oil manages to stay above $60 a barrel—a price at which it becomes profitable to drill a lot more wells—Occidental estimates that it has 27 years’ worth of production in that region alone. Occidental also owns a 40% stake in a natural-gas production business in the United Arab Emirates, and it’s expanding into chemical production with a new ethylene plant slated to start up in 2017.

Oxy’s stock isn’t the cheapest—at 1.9 times book value, it trades above the industry average. But the company is one of the best positioned to weather a long period of low oil prices, making the stock compelling, says BMO, which recently raised its 12-month price target from $75 to $85. Oxy should also be able to keep hiking its dividend, which it has raised 13 years in a row.

4. EOG Resources (EOG, $83, 0.8%) EOG may not make much money if oil stays in the $40s. But the domestic U.S. producer has some key advantages that could make it a home-run investment if the commodity rebounds.

EOG owns some of the premier oil-shale locations in the U.S., says Barclays, with vast acreage in areas such as North Dakota’s Bakken region, as well as the Permian and Eagle Ford basins of Texas. EOG runs a tight ship, too. It isn’t laden with debt, so it has the ability to buy assets. And it’s well managed financially, earning an 8.8% return on invested capital, compared with an industry average of 4.8%.

Low oil prices are forcing EOG to slash spending on exploration, and Wall Street expected the company to post a loss of $3.5 billion in 2015, largely due to some big asset write-offs. Yet rather than pump more oil at rock-bottom prices, EOG is waiting for a rebound before completing 320 of its wells. Moreover, EOG can make money with oil in the $50s: Its “best and largest” well opportunities generate 40% after-tax returns with oil priced at $50 per barrel, according to Barclays, which rates the stock a “buy.”

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5. Valero Energy (VLO, $72, 2.8%) The world’s largest independent refiner, Valero is raking in profits these days. Falling prices for crude oil and natural gas (its primary “feedstocks”) have boosted profit margins on its refined products. And with demand running strong, Valero reported net income of $1.4 billion in the third quarter of 2015, up 30% from the same period a year earlier. Valero also hiked its quarterly dividend by 25%, to 50 cents a share, bringing its total payout increase for 2015 to a whopping 82%.

One of Valero’s big advantages is the prime location of its refineries, which are along the Gulf Coast of Texas and Louisiana and not far from oil fields in the region. Valero also looks well positioned to export more refined products to Latin America and other areas where demand is climbing, says Robert Thummel, a fund manager at Tortoise Capital Advisors, an investment firm in Kansas City, Kan., that specializes in energy.

Valero’s good times would end if oil rebounded to $70 a barrel; profit margins would shrink, and demand for various fuel products could slump. Yet Valero has other revenue streams to help it stay afloat. It controls Valero Energy Partners (VLP), a master limited partnership that owns pipelines as well as storage and logistics businesses. Valero also sells fuel at more than 7,000 gas stations and operates 11 ethanol plants. Even if oil prices rise modestly, says Thummel, the stock “should continue to be a strong performer.”

6. Spectra Energy Partners (SEP, $42, 5.9%) As a master limited part­nership, Spectra shells out most of its available cash to investors every three months. Its 5.9% yield isn’t the highest among MLPs, which pay 8.5% on average. But Spectra has hiked its distribution for 32 quarters in a row, and it shows no signs of ending the streak, with plans to raise its distribution at an annual rate of 8% to 9% through 2017.Fueling growth are plans to spend $20 billion on new pipelines and other projects. Spectra already owns key pipelines in the Marcellus/Utica shale regions of Pennsylvania and Ohio, where gas production is thriving. Plans are under way to expand the network to deliver more gas to customers in the Northeast and Canada, along with manufacturing plants in the South, where demand for the commodity is high. Moreover, low gas prices aren’t a problem for Spectra because 95% of its pipeline capacity has been booked in advance, and customers pay by the volume of gas shipped, not the price.

All told, Spectra has “one of the most visible slates of opportunities” in the business, says Credit Suisse analyst John Edwards, who rates the stock a “buy,” with a 12-month price target of $61. (Keep in mind that MLPs have tricky tax consequences; consult your tax adviser before investing.)

7. Schlumberger (SLB, $77, 2.6%) There’s no sugarcoating the fact that things look bleak for Schlumberger, the world’s largest energy-services company. Customers are cutting spending on drilling and exploration, the industry has excess capacity, and prices are being squeezed. Yet business won’t stay this bad forever. Spending on oil-and-gas projects is likely to revive in 2017, fueling a rebound in sales, says RBC Capital Markets. Paris-based Schlumberger bought oil-well equipment maker Cameron International in 2015, expanding its suite of services. Even before that deal, Schlumberger had industry-leading technologies to help drillers squeeze more oil from wells and trim production costs. The firm’s non-U.S. business should improve, too, boosted by drilling projects that may not make money here with oil at $50, but can do so overseas.

Betting on Schlumberger won’t pay off if oil prices stay in the tank. But analysts see sales climbing 12% from 2016 to 2017, reaching $36.4 billion, with profits jumping 34% (after slumping in 2015 and 2016). At its current share price, Schlumberger’s “upside opportunity” beats the downside risk, says RBC analyst Kurt Hallead, who sees the stock hitting $92 within 12 months.

Funds for playing the recovery

Picking stocks isn’t the only way to play a recovery in oil. funds can get the job done, too. One way to keep it simple: Stick with a passively managed exchange-traded fund, such as Energy Select Sector SPDR ETF (symbol XLE). Tracking the energy stocks in Standard & Poor’s 500-stock index, the ETF recently held 38% of its assets in three global giants: ExxonMobil, Chevron and Schlumberger. The fund yields 3.0%, but that didn’t prevent it from losing 12.5% over the past year. Its annual expense ratio is just 0.15%. (Returns are through November 30.)

Another worthy unmanaged fund is iShares U.S. Oil & Gas Exploration & Production ETF (IEO). Focusing mainly on domestic producers, the ETF had 27% of its assets in re­finers, such as Phillips 66 and Valero. These businesses make more money when oil prices are low, giving the ETF some support if the commodity stays depressed. The fund, which charges 0.43% annually, lost 12.0% over the past year.

If you prefer an actively managed fund, consider Fidelity Select Energy Portfolio (FSENX). The fund, which lost 10.8% over the past year, beat 92% of its rivals over the past five years. Manager John Dowd says he’s focusing on high-quality domestic drillers with “prime acreage” in major U.S. shale regions—stocks that should climb sharply if oil prices eventually perk up. Annual fees of 0.79% are reasonable.

Energy stocks have been a horror show this year, eaten by the blob of low-priced oil. Many stocks have slumped 30% or more as oil prices have plunged and industry profits have trickled away. Don’t expect much relief in 2016 either; Kiplinger expects the price of West Texas crude to range from $45 to $55 a barrel, compared with the September 15 close of $44.59.

Painful as this may be, the major oil-and-gas producers are strong enough to survive. And Big Oil knows what investors want in lean times like these: a safe and secure dividend. Although industry profits have practically evaporated, corporate bosses are taking steps to maintain their dividend streams: tapping into cash on balance sheets, cutting costs and using other financial means to keep paying. Assuming the dividends keep rolling in, investors can effectively get paid to wait for a recovery in oil prices. If crude eventually does climb, the stocks will pay off handsomely. (All share prices are as of September 15.)

Start with Exxon Mobil (symbol XOM, $72.86), the largest U.S. oil-and-gas company, with a market value of $304 billion and a dividend yield of 4.0%. Hammered by a decline in profits from oil-and-gas production, Exxon’s earnings plunged by 52% in the second quarter from the same period a year earlier, to $4.2 billion. But profits from its “downstream” business—refining and petrochemical production—climbed by $795 million, to $1.5 billion.

Overall, Exxon reported $3.9 billion of free cash flow in the quarter (calculated as cash profits from operations and asset sales, less capital spending and other expenses). That was enough to cover the $3.1 billion in dividends Exxon paid. Moreover, free cash flow is likely to pick up in coming years as profit margins increase and Exxon lowers annual spending on oil-and-gas projects, says Morningstar analyst Allen Good.

Exxon could take other measures to cover its dividend in a pinch: tapping into the $4.3 billion in cash on its balance sheet, issuing more debt, and reducing or suspending share buybacks. Even if oil plunges again, the dividend will be the last thing to go. Exxon has raised its dividend for 32 years in a row, hiking it even when oil prices collapsed to $32 a barrel during the 2007-09 recession.

Shares of Chevron (CVX, $77.17), the second-largest U.S. energy company, boast a juicy 5.6% dividend yield. Chevron is not as financially solid as Exxon, with about 50% more long-term debt on its balance sheet and lower annual earnings. Chevron has also been spending heavily to boost sales, including $54 billion on a liquefied-natural-gas plant in Australia—a project that has drained cash and won’t turn a profit for years.

But Chevron isn’t likely to cut its dividend. With spending on some major oil-and-gas projects winding down, profit margins and earnings should pick up. By 2017, the company expects free cash flow to cover its dividend. Until then, it’s taking other steps to fund payments: trimming its budget for exploration and production, selling assets and suspending stock repurchases. Wall Street expects profits to climb by 33% in 2016, to $4.59 per share.

ConocoPhillips (COP, $47.28) offers a slightly higher yield, paying 6.3%. Revenues are on track to hit $37.5 billion this year—down sharply from $55.5 billion in 2014—and analysts expect Conoco to lose 33 cents a share for the full calendar year.

Despite the red ink, Conoco hiked its quarterly dividend in July by a penny per share, to 74 cents. At the time, CEO Ryan Lance told investors not to fret, saying “the dividend is safe. Let me repeat that.” For now, the company is using cash on its balance sheet to shore up payments; it ended the second quarter with $3.8 billion in cash, down from $5.1 billion at the start of the year.

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Conoco also plans to shelve some drilling projects and cut its exploration-and-development budget by about $1 billion a year until oil prices rebound. Earnings, meanwhile, should get a lift in 2016 as production picks up in North America and a new liquefied-natural-gas plant starts up in Australia. If oil prices recover modestly over the next few years, Conoco should have no trouble covering its dividend, says Brian Peery, comanager of the Hennessy Cornerstone Value Fund (HFCVX). “It’s a big ship and turning it around is difficult, but the company has done a good job,” he says.

Sitting atop the dividend ladder is British Petroleum (BP, $31.11), offering a stunning 7.7% yield. At $2.40 per year for each of BP’s American depositary shares, the dividend costs the company about $6.5 billion annually, a prodigious amount that, on the face of it, BP cannot afford. After shelling out $19.6 billion on oil-and-gas projects this year, the London-based company will lose $7 billion on a free-cash-flow basis, estimates Fadel Gheit, an energy analyst at investment firm Oppenheimer & Co. That means BP won’t generate enough cash to cover all its expenses, including its dividend.

BP’s finances should improve, however. The company recently agreed to pay $18.7 billion to settle state and federal charges related to the 2010 Gulf of Mexico oil spill. BP has now racked up $54.6 billion in pretax charges related to the spill, potentially putting the bulk of claims behind it

In the years ahead, BP is likely to focus on squeezing more costs from its business, boosting production and selling assets, says Gheit. With $32.6 billion in cash on its balance sheet, the company can use some of that money to help pay the dividend and plug any holes in its operating budget. Its free cash flow deficit should slip to $3.7 billion in 2016. Moreover, BP looks cheaper than other oil giants, says Gheit, who estimates that BP trades at 12.6 times estimated earnings, compared with an industry average of 13.9. He has an “outperform” rating on the stock and expects it to reach $45 over the next 12 to 18 months.

BP has a wild card in its back pocket as well: a nearly 20% stake in the Russian oil giant Rosneft. BP is developing some major oil-and-gas projects with Rosneft, a Kremlin-controlled company that pays dividends to BP. Doing business with the Kremlin is risky, of course, but if BP can help Rosneft lift sales and profits, BP’s stake in the company will gain value and the stock “should be a home run,” says Charles DyReyes, an energy analyst with Brandywine Global Investment Management in Philadelphia. “Investors view BP as a mismanaged collection of assets,” he adds. “We think that’s just not true.”

So much is happening in so many places—from Wall Street to Europe to America’s fracking fields—that your portfolio is probably suffering from motion sickness. Consider that in the first 25 trading days of 2015, the Dow Jones industrial average posted triple-digit moves on 17 occasions.

Then again, high-quality bonds, both taxable and tax-free, and high-yielding stocks, including utilities and real estate investment trusts, have begun the year in fine form. There has also been some good news on the energy front: Even as their profits slide because of the collapse in oil prices, energy giants such as ExxonMobil (symbol XOM) and Chevron (CVX) have resisted the temptation to cut dividends. Rather, they’re postponing exploration projects and paring share buybacks. Meanwhile, energy-related master limited partnerships continue to increase cash payouts.

On the fixed-income side, I grant that many bonds are expensive. How could they not be when the benchmark 10-year Treasury bond yields just 1.9%? Yet my fellow Kiplinger’s columnist James Glassman posits that the yield on the 10-year bond will sink below 1%. If he’s right, holders of long-term bond funds will reap additional capital gains because bond prices move in the opposite direction of yields.

It’s a different story if you’re seeking steady income. A 1% yield for 10 years just doesn’t cut it. You can get as much in an insured online savings account (see Best of the Online Banks).

Happily—and this is my primary message this month—you can do better than a 1% yield without taking extraordinary risks. Naturally, you’ll have to go beyond the bank for better cash returns. As always, I strongly advise against tearing up any successful income plan because of transitory news events. A broadly balanced collection of dividend stocks, high-quality bonds, and securities that pass along energy and real estate income is as sensible a strategy today as it was last year.

We offer four worthy holding tanks for your cash—three mutual funds and one exchange-traded fund—listed in descending order of current yield. Each pays you monthly. I suggest putting 25% of your short-term, low-risk money in each. (Yields and returns are through February 6.)

Fidelity Floating Rate High Income (symbol FFRHX; current 30-day yield, 4.4%; one-year total return, 0.6%), the original no-load bank-loan fund, delivers a generous yield. The fund carries some credit risk; the loans it invests in are made to companies with subpar credit ratings. But because the rates on those loans adjust regularly, the fund should maintain its share price in the unlikely event that short-term rates surge.

William Blair Income Fund (WBRRX; yield, 1.7%; one-year return, 2.7%) owns mortgage securities and high-quality corporate bonds with an average maturity of about four years. It provides decent yield without taking on too much interest-rate risk.

Metropolitan West Low Duration Bond Fund (MWLDX; yield, 1.1%; one-year return, 1.2%) sports a modest yield, but its low average maturity pretty much eliminates any price erosion from a bump in short-term rates.

Vanguard Short-Term Bond ETF (BSV; yield, 0.9%; one-year return, 1.2%) tracks an index of government and corporate bonds with one- to five-year maturities. It pays a hair less than 1%, but on any given day, the yield can climb above 1%. Because it’s an ETF, you can get in and out of it during the trading session. Annual expenses are a rock-bottom 0.10%.

Plunging oil and gas prices wreaked havoc with energy stocks in 2014. Seven of the 10 worst-performing companies in Standard & Poor's 500-stock index either provide drilling services or explore for oil and gas.

And unlike in other years, when a big share-price drop might lead to a rebound the following year, analysts maintain that many of 2014's worst performers are likely to fare poorly in 2015 as well. "Offshore drillers had bad fundamentals that got worse with the drop in oil prices," says Robert Pinkard, an analyst with RBC Capital Markets. "There could be even more downside in the first half of the coming year."

Three offshore drillers are on the list of the S&P 500's worst performers. Transocean (symbol RIG, $18.79) surrendered 56%, making it the S&P 500's biggest loser. Noble Corp. (NE, $17.30) dropped 43%, and Ensco Plc. (ESV, $30.72) declined 41%. (The list of the 10 worst performers is based on data as of December 26; share prices and returns, which include dividends, are as of December 29 and are courtesy of Morningstar.)

All three are international operations that contract with big oil and gas producers—outfits such as ExxonMobil (XOM) and Chevron (CVX)—to operate offshore wells. As energy prices fall, the firms' customers are less likely to launch new projects, putting pressure on the drillers.

Ironically, a year ago all of these companies appeared to be hot properties. That's because energy prices had been unusually stable; oil sold for roughly $80 to $100 per barrel for the better part of three years. That sparked demand for offshore and deep-water drilling and led to predictions of rapid growth for the industry. But as oil prices started to slide, from $105 per barrel in July to $55 in late December, those expectations were shattered. On the bright side, offshore drillers typically operate on long-term contracts, which can't be quickly canceled, so most drillers will continue to make money. But at best they will generate only tepid revenue and profit growth.

All of the other energy companies on the list of shame are involved in exploration and production, so their share prices closely follow swings in oil and gas prices. Shares of Denbury Resources (DNR, $8.22), a production company operating in the Rocky Mountains and Gulf Coast, surrendered 48% in 2014. Denbury has already announced that it will cut capital spending by 50% and keep production relatively flat over the next two years to conserve its resources while oil prices remain low.

The stock of QEP Resources (QEP, $20.01), which operates in shale basins in North Dakota, Oklahoma and elsewhere, dropped 34% in 2014. QEP recently sold its so-called midstream business—pipelines and energy-storage facilities—making it a pure play on the production of oil and gas. Wall Street worries that both Denbury and QEP may have trouble meeting their debt obligations if oil prices remain low for long.

Range Resources (RRC, $56.00) landed on the 10th spot of the worst-performers list, losing 33%. But Range may have better prospects than the market imagines because it has long-term leases on 1 million prime acres in the Marcellus shale basin in western Pennsylvania. That allows the company to commit to long-term production contracts required by big power utilitities. With production rising 20% to 25% a year, Range has both the experience and the reserves to be a major global player in natural gas, says Karl Chalabala, an analyst with CanaccordGenuity, a Canadian investment banking firm. His one-year price target: $76.

The market may also have unjustly punished the stock of Freeport McMoRan (FCX, $23.26), which lost 35% in 2014. Freeport primarily mines for copper, gold and other metals, but it increased its stake in the energy business through a 2013 acquisition. Moreover, Freeport is almost immune to the recent slide in oil prices, says UBS analyst Brian MacArthur, because it has used hedging to lock in prices of $70 to $90 per barrel on 80% of its crude oil production for 2015. Meanwhile, the price of copper, which has been weak, has begun to stabilize. MacArthur thinks Freeport's stock is a great buy and expects it to reach $33 within a year.

The remaining companies that make up the list of top losers have no one to blame but themselves for their sorry performance, and they appear to have significant challenges to overcome before they can stage a turnaround.

The shares of Genworth Financial (GNW, $8.46), the S&P 500's sixth-biggest loser, plunged 46% in 2014. The insurer offers a range of financial products, from life and disability coverage to mortgage insurance and annuities. But this year's results are all about long-term-care insurance, says Steven Schwartz, an analyst with Raymond James. In mid 2014, Genworth launched a thorough review of its long-term-care business and determined that it had significantly underestimated the amount of money the company needed to set aside to handle future claims. During the third quarter, Genworth boosted reserves by more than $500 million and posted a loss of $844 million. The stock, which hit the skids in July when the company first announced the long-term-care review, got slammed again when the third-quarter results came out. Can the stock recover? Yes, says Schwartz. "But long-term care is going to be a long-term saga," he says. "It's going to be many years before anyone truly knows what the profitability is on these contracts."

Avon Products (AVP, $9.56), by contrast, has been experiencing a long, slow slide into oblivion. The beauty-products company, whose shares lost 43% in 2014, has been plagued by increased competition and a deteriorating base of sales representatives, who have become increasingly disgruntled because of the company's inability to deliver orders accurately and on time. With everyone from Esteé Lauder to Procter & Gamble and Unilever going after the same consumers, Avon has lost its competitive edge, says Morningstar analyst Erin Lash. Even at today's depressed stock price, Lash says the shares are "fairly valued."

Likewise, Mattel (MAT, $30.77) has begun to look as dated as Barbie, the buxom plastic doll that has fueled the toymaker's growth since 1959. During the first nine months of 2014, Mattel's revenue dropped 14%, while profits plunged 35%. The company recently announced initiatives aimed at getting its executives out of conference rooms and back to the business of developing toys, and it replaced its marketing director with someone who successfully boosted Barbie sales in the past, says Linda Bolton Weiser, an analyst with the investment bank B. Riley & Co. Though both moves are positive, it could be a while before they result in improved profitability. For now, Weiser considers the stock a "hold."

Mr. Market often takes investors for a wild ride that instills them with fear and drives them away from stocks. But giving in to your market-phobia means missing out on big wins and losing out to future inflation.

Instead, add a more-reliable brand of stock to your portfolio. Here are ten low-volatility stocks that will deliver consistent returns over the long haul without all the drama. They all have betas of less than 1, which suggests that their moves are less than the market's (beta is a measure of volatility compared with a particular market, in this case the U.S. stock market, as measured by Standard & Poor’s 500-stock index).

On top of having low volatility, the companies tend to pay generous dividends and increase them regularly. They usually boast pristine balance sheets, with loads of cash and little debt. Plus they are industry leaders and have been around for a long time, so you’ll no doubt find their products and services familiar. Take a look:

Year company was founded: 1882 (ExxonMobil merger was in 1999)

52-week high: $86.42

52-week low: $66.80

Consecutive years of dividend increases: 13

Yield: 2.8%

Beta: 0.50

ExxonMobil may have ceded its claim as the world’s most valuable company to Apple (AAPL), but the energy giant has something Apple doesn’t: a corporate history spanning more than a century and a reputation for safety befitting a stock with a market value of $400 billion. Plus, it is one of just four companies with a perfect, AAA credit rating from Standard & Poor’s.

Exxon is not without some challenges. The company has cut back its refining business, for example, as demand for oil in developed countries shrinks. Another hurdle is a huge stake in North American natural gas production at a time when a glut has pushed gas prices to ten-year lows. And opportunities for energy production growth overall are limited.

But the company’s functional and geographical diversity, along with deep pockets and extensive expertise, give it unparalleled muscle to compete globally. Analysts at International Strategy & Investment call the company’s balance sheet a “fortress,” strengthened with $13 billion in cash. Exxon has a long policy of returning cash to investors via share buybacks and dividends, and analysts speculate that Exxon is poised to boost the dividend significantly.

Year company was founded: 1856 (as Minneapolis Milling Company)

52-week high: $40.73

52-week low: $34.15

Consecutive years of dividend increases: 29

Yield: 3.2%

Beta: 0.18

The brands of consumer food giant General Mills are strong enough to withstand competitive pressures from cheaper generic brands. Is there really any substitute for Cheerios? Other brands include Lucky Charms, Progresso soups, Green Giant vegetables and Betty Crocker baking mixes. A weak economy and high commodity prices are challenges. A slightly muted outlook for the fiscal year that ends May 2013 in part reflects increased spending to shore up the company’s recently acquired Yoplait yogurt division, a laggard in the trendy Greek yogurt category. But General Mills is cutting costs elsewhere and using its formidable cash position to expand in faster-growing emerging markets and to finance dividends, share buybacks and acquisitions -- most recently a Brazilian food maker that is expected to more than double the company’s annual sales in Latin America, to nearly $1 billion.

Year company was founded: 1911 (as Computing-Tabulating Recording Company)

52-week high: $208.63

52-week low: $155.65

Consecutive years of dividend increases: 17

Yield: 1.8%

Beta: 0.66

Big Blue has been around for a century and knows how to weather economic storms. The company offers a wide range of computer hardware, software and services, making it a one-stop shop for many corporate information-technology departments. Cloud computing could challenge IBM’s high-end hardware business. But the company continues to innovate. It spent $6.3 billion on research last year and won more U.S. patents (6,180) than any other company.

Year company was founded: 1886

52-week high: $65.48

52-week low: $58.04

Consecutive years of dividend increases: 45

Yield: 3.7%

Beta: 0.53

A slew of recent product recalls at Johnson & Johnson has given investors headaches lately. But it’s probably nothing that a couple of Tylenol tablets and a dividend check can’t cure. Both the medical-devices unit and the consumer segment are well on the road to recovery, says Cowen and Co. analyst Ian Sanderson.

The prognosis for the company’s pharmaceuticals franchise is strong, with promising drugs coming to treat cancer, schizophrenia and hepatitis C. Sanderson sees J&J’s sales and earnings growth reaccelerating in 2013.

J&J’s financial condition is the picture of health, with $32 billion of cash in the till and easy access to debt (it’s one of those four companies with a triple-A credit rating) to pursue opportunistic acquisitions, buy back shares or raise the dividend. The distribution rate has climbed by one third over the past four years.

Year company was founded: 1949

52-week high: $56.07

52-week low: $43.48

Consecutive years of dividend increases: 36

Yield: 2.9%

Beta: 0.70

ADP is a bet on an improving economy and a rosier employment picture. The world’s largest provider of outsourced payroll services, it's another of the four triple-A-rated companies left standing.The annual dividend has grown from $1.16 per share in 2008 to a rate of $1.58 this year.

A recessionary relapse would be bad news for ADP. But employment numbers in the U.S. are trending up. And untapped markets among small and midsize businesses, as well as overseas, provide plenty of running room for ADP.

Year company was founded: 1886

52-week high: $76.94

52-week low: $62.19

Consecutive years of dividend increases: 23

Yield: 2.7%

Beta: 0.52

You can order a Coke almost anywhere. Coca-Cola Co. delivers its soft drinks, which also include Sprite, Fanta, Tab and Fresca, to thirsty consumers in some 200 countries. (Other brands include Minute Maid orange juice, Powerade energy drink and Dasani bottled water.) And the company is investing billions of dollars more in overseas markets (which account for 70% of sales), especially in China, Russia, Brazil and other big emerging markets.

Coke battled higher commodity prices last year but recently announced a plan to shave annual costs by $550 million to $650 million by the end of 2015. Analysts, on average, expect Coke to generate annualized earnings growth of nearly 8% over the next three to five years. Some, such as analyst Caroline Levy, at Credit Agricole Securities, think Coke can achieve a double-digit earnings growth rate over the long haul. The stock, at 18 times estimated earnings, isn’t cheap. But the bulls say that because of Coke’s steadiness, it deserves an even higher price-earnings ratio.

Year company was founded: 1940

52-week high: $100.25

52-week low: $79.76

Consecutive years of dividend increases: 36

Yield: 3.2%

Beta: 0.42

The golden arches continue to rise in emerging markets. But McDonald’s continues to gain market share even in the developed world, where restaurant demand is muted. The world’s number-one chain in total sales, McDonald’s enjoys huge economies of scale and wields significant bargaining clout with suppliers. According to Morningstar, McDonald’s restaurants, on average, generate about $2.7 million per year, easily trumping the fast-food industry average of just over $1 million per location. Nobody does fast food better.

Since 2007, McDonald’s has returned more than $27 billion to shareholders via share buybacks and dividends, funded by strong profits and refranchising activity (the latter involves selling corporate-owned stores to franchisees). The stock has served up tasty gains over the past ten years, returning 14.7% annualized, an average of nearly ten percentage points per year ahead of the S&P 500.

Year company was founded: 1847 (went public in 1881)

52-week high: $89.50

52-week low: $60.06

Consecutive years of dividend increases: 4

Yield: 3.7%

Beta: 0.87

You’ll find the shares of Philip Morris International tempting if you have no concerns about investing in tobacco. Consider this telling prediction, from Morningstar: By 2020, there will be 1.4 billion smokers globally, up from 1.3 billion today, even if the percentage of the population that smokes declines 1% annually. Not counting China and the U.S., the market share of Marlboro, PMI’s best-selling brand, rose to 9% last year. And Parliament, a luxury brand with a high profit margin, saw sales volume increase 12%. Midprice L&M has been gaining market share in the European Union since 2009 and is the second-largest brand there.

Unfortunately for smokers, cigarette price hikes are a frequent fact of life. But that pricing power helps PMI offset pockets of declining sales in Europe. And it contributes to the large profits that fund an aggressive stock-repurchase program and regular dividend increases, including a 20% boost in the payout rate last year.

Year company was founded: 1837

52-week high: $67.33

52-week low: $57.09

Consecutive years of dividend increases: 10

Yield: 3.8%

Beta: 0.45

Check your pantry or laundry room and you'll probably find this company's products lining the shelves. P&G has more brands generating at least $1 billion in annual sales -- including Tide, Duracell and Charmin -- than any other household-goods maker.

P&G hasn’t been immune to consumer belt-tightening in the U.S. and Europe and slower growth in emerging markets. As with many multinationals, currency swings have cut into revenues. The company recently warned that sales and profits for the fiscal year that ends in June 2013 would be less than previously expected. But P&G has responded with some belt-tightening of its own. The company is engineering a $10 billion, five-year cost-savings program aimed at plumping profit margins. And executives have vowed to focus on core markets and businesses, as well as on dreaming up the next game-changing product you don’t yet know you need.

Disappointing short-term projections have pushed the stock to bargain levels, say long-term bulls. If P&G’s plan works, shareholders could come out winners as earnings growth re-accelerates. Meanwhile, investors are paid to wait for progress with a generous dividend on a stock that is less than half as volatile as the overall market.

Year company was founded: 1962

52-week high: $68.58

52-week low: $47.47

Consecutive years of dividend increases: 15

Yield: 2.3%

Beta: 0.31

Behold the largest retailer in the world, posting annual sales of more than $400 billion. Every week, more than 100 million people walk into a Wal-Mart store. Its stock seems to have shaken off worries about any long-term effects of an investigation into the company’s Mexico operations. Look for Wal-Mart Express stores to penetrate urban and smaller rural markets, while the company’s Internet division readies itself to take on Amazon.

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Is Apple, the world's most valuable company, on its way toward an unprecedented market capitalization of $1 trillion? Or is Mapplegate, the fiasco surrounding the error-filled map app on Apple's new iPhone, a sign that the aura surrounding Apple and its seemingly bulletproof stock is starting to dissipate. If Apple were to fall from its lofty perch, it certainly wouldn't be a shock, because, let’s face it, it's tough to hold on to the top spot. Companies go in and out of fashion. Stock prices rise and fall. Consider that Microsoft became number one in September 1998 when its market value was a lofty $282 billion; as of October 3, it's valued at $250 billion. In September 1993, General Electric hit the alpha-spot with $84 billion; its current market cap is $242 billion.

Over the past 20 years, seven companies have held the number-one spot in market value. How did they make it to the top, why did they fall, and which companies supplanted them? Have a look. (Please note: the periods at the top reflect broad ranges and don't take into account brief reversals due to small, temporary changes in share prices.)

When it was on top: March 1992.

The company's current name, Altria Group, wasn't coined until 2003. Marlboro remains the world's best-selling cigarette brand to this day.

Mike Miles was riding the bull when he took over as CEO in late 1991. Under his predecessor, Hamish Maxwell, Philip Morris had generated five consecutive years of earnings growth of at least 20% annually, thanks in part to acquisitions of General Foods in 1985 and Kraft in 1988. But domestic tobacco sales were slowing amid changing attitudes toward smoking. A flood of tobacco litigation also ensued.

Who pushed it aside: ExxonMobil, from April 1992 through October 1992 (more about Exxon later).

When it was on top: November 1992 through January 1993.

Twenty years ago, Wal-Mart ascended to corporate champ. The company was ringing in record sales and earnings and expanding across the country with new stores, supercenters and Sam's Clubs. But the stock ran out of steam in March 1993 and languished for the next four years.

Some blame the April 1992 passing of founder Sam Walton. Some analysts believeoverexpansion may have been an issue, too. To boost growth in 1994, the company doubled the number of its supercenters -- those now-ubiquitous discount store/grocery one-stop shopping concepts -- and increased by two-thirds the number of Sam's Clubs, its warehouse stores. But sales growth at existing stores, the traditional figure used to measure retailers, had dropped to 6% from 11% the year before. The toll was enough to unseat Wal-Mart.

Who pushed it aside: ExxonMobil, for just a few months, from January to April 1993; then AT&T (more on Exxon later).

When it was on top: May 1993 through August 1993.

This wasn't Ma Bell's first time on the throne -- she'd been queen of the markets in the early 1980s. That was before the phone giant (with a little nudging from the U.S. Department of Justice) divested its local operating companies in 1984 while retaining its manufacturing arm and long-distance operations. The breakup resulted in the creation of seven regional holding companies (aka Baby Bells), as well as a six-year stretch of steadily declining long-distance rates.

Declining toll-call revenues forced AT&T to seek other avenues of growth. In 1991, it bought computer maker NCR in anticipation of growing synergies between computing and communications. And in August 1993, AT&T announced the acquisition of McCaw Cellular Communications, then the country's largest provider of cell-phone service.

Who pushed it aside: General Electric.

When it was on top: September 1993 to August 1998, with a brief interruption in 1994, when AT&T reclaimed the top spot, and subsequent reigns occurring periodically from 2000 to 2005.

These were the reaping years for Jack Welch. He had been CEO of GE since 1981, and the fruits of his reign ripened in the 90s. He'd spent the previous decade slimming down the company and redefining it -- laying off employees, selling off manufacturing businesses and buying up financial-services firms. By the mid 90s, the conglomerate was in full swing with Six-Sigma -- the management strategy that, among other things, stressed rewarding winners and rejecting losers. General Eclectic became a market darling -- Fortune called it one of the world's "most admired companies" and Welch was named "manager of the century." Welch left the company in 2001.

Who pushed it aside: Microsoft.

When it was on top: September 1998 through March 2000.

Microsoft's ascent was fueled by 23 consecutive years of record sales and earnings (the company was founded in 1975; it went public in 1986). The colossus of Redmond had its share of lovers and haters. In June 1998, it launched its Windows 98 operating system in 40 countries. The software would end up on the overwhelming majority of new personal computers. But earlier that year, the U.S. Department of Justice filed an antitrust suit against Microsoft. About that time, the tech-stock boom of the late 1990s, fueled by the Internet and concerns about the changeover on computers to the year 2000, was accelerating.

In December 1999, a few months before the bubble burst, Microsoft shares peaked at a split-adjusted price of $58.72. The stock had doubled in 12 months and was trading at a whopping 70 times earnings (its historic average price-earnings ratio was about 30). When the party ended, Microsoft's stock suffered. It ceded its crown of most-valuable company in April 2000 -- only to regain it in June 2002 and hold it (most of the time) until September 2003. But the company has never fully recovered from tech bubble popping. As of October 3, Microsoft sells at ten times estimated 2013 earnings.

Who pushed it aside: GE, in its post-Welch days, under his successor, Jeffrey Immelt. But in 2005, GE was ousted again, this time by ExxonMobil.

When it was on top: February 2005 through August 2011.

Think rising oil prices, which hit an all-time high in 2008. That year, the company clocked record revenues and profits. ExxonMobil has ranked among the ten largest companies in the country for decades. It remains today the world's largest publicly traded energy company. The firm's history stretches back more than 125 years and includes well-known brands long-since folded into the current incarnation, including Standard Oil, MobileOil, Esso, Mobile and Exxon. But falling commodity prices have hurt ExxonMobil's stock lately, making way for another company to be crowned king.

Who pushed it aside: Apple, though Exxon briefly reclaimed the number-one spot in late 2011.

When it was on top: September 2011 through today.

Walk the streets, sit in a restaurant, ride the train -- wherever you go, you'll see people using iPhones or iPads (or both). Wildly popular products explain why Apple has climbed to the top of the heap. The company's profits have grown at a stunning annualized pace of 59% over the past ten years, and it sits on an astounding $117 billion in cash. Apple's market value of more than $620 billion exceeds that of its nearest rival, ExxonMobil, by more than $200 billion.

Who pushed it aside: ???????

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