Dividend Stocks Are Paying Off for Income Investors
Investors can weather the storm of a volatile market with dividend-paying stocks.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
When the stock market hits a rough patch, it can pay to hide out in dividend stocks. Those cash payouts to shareholders are akin to a vaccine or an underground war bunker. They may not shield you from all of the financial pain of a market in free fall due to soaring inflation and rising interest rates, but they will ensure that you'll survive the tumult.
"You can be down, but not out," says Jay Hatfield, manager of the InfraCap Equity Income Fund ETF (ICAP). Dividend-payers provide an income stream that allows you to cover expenses without selling stocks at depressed levels. And you can reinvest dividends in stocks you own at lower prices.
That weather-the-storm thesis applies to the Kiplinger Dividend 15, the list of our favorite dividend stocks. Over the past 12 months, our picks have gained 5.1%, on average, compared with a 0.6% decline in the S&P 500 index. They sport an average yield of 3.3%, more than double the 1.6% yield of the stock market benchmark.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Since early February, six members of the Dividend 15 have hiked their payouts. The biggest bump, 15.3%, came from Home Depot (HD), benefiting from the nesting trend prompted by the pandemic. Among our dividend stalwarts (companies that have raised their dividend at least 20 straight years), Procter & Gamble (PG), which has the longest streak of our favorites, raised its dividend for the 66th consecutive year. 3M (MMM), Air Products & Chemicals (APD), Johnson & Johnson (JNJ) and Walmart (WMT) also extended their streaks.
The outlook for dividends is good. The S&P 500 is on track for 11 straight years of record payouts. S&P Dow Jones Indices sees dividends for stocks in the S&P 500 rising 7.5% this year.
The biggest Dividend 15 gainer in the past 12 months was private-equity firm Blackstone (BX), up 36.4% thanks to strong gains from its real estate portfolio and from credit holdings that are less affected by inflation, such as floating-rate debt. Drugmaker AbbVie (ABBV) is a defensive play that has risen 36.3% with the help of robust performance from its immunology drugs and continued strength in Botox products. Defense contractor Lockheed Martin (LMT), which makes the Javelin anti-tank missiles used by Ukraine in its war with Russia, is up 17.1% over the past year.
But 3M was off 25.4% over the past year. The conglomerate is challenged by supply-chain and inflation headwinds and by legal costs related to its military combat earplugs. Still, its generous dividend does not appear to be in jeopardy, says InfraCap's Hatfield, and the upside of 3M's struggles is that its shares sport a plump 4.1% yield.
Walmart and McDonald's (MCD) are also facing headwinds, but we’re staying patient. Walmart, the nation's largest retailer, is down nearly 10% over the past 12 months, hurt by higher costs. McDonald's is exiting Russia after three decades of selling burgers there, and the company announced it will incur a $1.2 billion to $1.4 billion charge to do so. That's not likely to impair its payout, says Morningstar analyst Sean Dunlop: "Its dividend should be safe."
-
The Cost of Leaving Your Money in a Low-Rate AccountWhy parking your cash in low-yield accounts could be costing you, and smarter alternatives that preserve liquidity while boosting returns.
-
I want to sell our beach house to retire now, but my wife wants to keep it.I want to sell the $610K vacation home and retire now, but my wife envisions a beach retirement in 8 years. We asked financial advisers to weigh in.
-
How to Add a Pet Trust to Your Estate PlanAdding a pet trust to your estate plan can ensure your pets are properly looked after when you're no longer able to care for them. This is how to go about it.
-
Nasdaq Slides 1.4% on Big Tech Questions: Stock Market TodayPalantir Technologies proves at least one publicly traded company can spend a lot of money on AI and make a lot of money on AI.
-
Fed Vibes Lift Stocks, Dow Up 515 Points: Stock Market TodayIncoming economic data, including the January jobs report, has been delayed again by another federal government shutdown.
-
Stocks Close Down as Gold, Silver Spiral: Stock Market TodayA "long-overdue correction" temporarily halted a massive rally in gold and silver, while the Dow took a hit from negative reactions to blue-chip earnings.
-
If You'd Put $1,000 Into AMD Stock 20 Years Ago, Here's What You'd Have TodayAdvanced Micro Devices stock is soaring thanks to AI, but as a buy-and-hold bet, it's been a market laggard.
-
Nasdaq Drops 172 Points on MSFT AI Spend: Stock Market TodayMicrosoft, Meta Platforms and a mid-cap energy stock have a lot to say about the state of the AI revolution today.
-
S&P 500 Tops 7,000, Fed Pauses Rate Cuts: Stock Market TodayInvestors, traders and speculators will probably have to wait until after Jerome Powell steps down for the next Fed rate cut.
-
S&P 500 Hits New High Before Big Tech Earnings, Fed: Stock Market TodayThe tech-heavy Nasdaq also shone in Tuesday's session, while UnitedHealth dragged on the blue-chip Dow Jones Industrial Average.
-
Dow Rises 313 Points to Begin a Big Week: Stock Market TodayThe S&P 500 is within 50 points of crossing 7,000 for the first time, and Papa Dow is lurking just below its own new all-time high.
