Dividend Stocks

3 Dividend Stocks Yielding Over 3% With Multi-Decade Payout Growth Streaks

High-yield dividend stocks have consistently attracted the attention of Wall Street investors. These stocks not only provide a steady income stream but also offer the potential for capital appreciation. By reinvesting dividends, investors can benefit from compounding returns, which can significantly enhance portfolio value over time.

Among the myriad of dividend shares available, a select few stand out due to their impressive track records of dividend growth spanning multiple decades. Three such high-yield dividend stocks boast a yield of over 3% and a remarkable history of consistent payout increases.

History shows that dividends have played a significant role in the total returns of the S&P 500 Index, contributing an average of 34% from 1940 to 2023. The power of reinvested dividends and compounding has been substantial. They account for 85% of the cumulative total return of the S&P 500 Index. So, let’s explore these high-yield dividend stocks that deserve your attention in July 2024.

Pfizer (PFE)

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Biotech giant Pfizer (NYSE:PFE) boasts a robust lineup of vital pharmaceuticals and promising new treatments and vaccines in oncology, diabetes and other critical ailments. Some of its well-known therapies and drugs include Eliquis to treat blood clots, Ibrance that targets breast cancer, Xtandi that is used to treat prostate cancer and the Covid-19 vaccine Comirnaty, developed in collaboration with BioNTech (NASDAQ:BNTX). 

In its first quarter 2024 report, Pfizer reported that revenue declined 20% to $14.9 billion due to lower Comirnaty and Paxlovid sales. Yet, non-Covid product sales grew 11% operationally. Adjusted diluted EPS came in at 82 cents compared to $1.23 for the same period last year. 

Pfizer’s massive size provides key operational advantages, including cost efficiencies. The company is on track to achieve its goal of $4 billion in cost cuts by the end of 2024, which is expected to improve operating margins. These cost-cutting measures, along with steps to diversify its product portfolio, are designed to enhance Pfizer’s long-term profitability 

Importantly, PFE stock has a long and impressive dividend history. The company has consistently increased its dividends consecutively for 15 years. Currently, PFE boasts a healthy dividend yield of 6.0%. This not only provides a steady stream of income for investors but also demonstrates the company’s commitment to shareholder value.

So far in 2024, PFE stock is down 2.8%, while the shares are changing hands at 11.2 times forward earnings and 2.8 times sales. Meanwhile, the 12-month median price forecast for PFE stock stands at $30.94, a near 10% upside potential from current price of $28.28.

Johnson & Johnson (JNJ)

jnj healthcare stocks

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Johnson & Johnson (NYSE:JNJ) is a name synonymous with healthcare innovation and reliability. The company focuses on consumer health, pharmaceutical and medical technology. With a market capitalization of over $350 billion, Johnson & Johnson is a titan in the industry.

According to the first quarter 2024 results, revenues came in at $21.4 billion. That marks a 2.3% upside with an adjusted operational growth of 4.0% year-over-year (YOY). The adjusted EPS of $2.71 represented a robust increase of 12.4% compared to the year-ago quarter. And. the company continues to invest heavily in R&D, spending over $3.5 billion or 16.6% of sales in Q1 of 2024. 

Many on Wall Street highlight that one of JNJ’s most attractive features is its unwavering commitment to shareholder payouts. In April 2024, the company announced its 62nd consecutive year of increasing its quarterly dividend, a remarkable feat. This latest increase translates to a 4% rise, solidifying JNJ’s position as a top-tier dividend stock with a strong dividend yield of over 3.3%.

Yet, JNJ stock is down 6.98% year-to-date (YTD) while the shares are trading at 13.7 times forward earnings and 4.10 times sales. Presently, the 12-month median price forecast stands at $170.00 suggesting an upside potential of 16.3%.

International Business Machines (IBM)

Photo of IBM (IBM) building as seen through the canopy of a tree. IBM logo is in large letters on side of building.

Source: shutterstock.com/LCV

International Business Machines (NYSE:IBM) remains a titan of the tech industry with a rich history of innovation. From mainframes to cloud computing, IBM offers a vast array of IT services and products.  This stability, coupled with the company’s reputation for reliable dividend payouts, makes IBM stock an outstanding option for income investors seeking steady returns.

In late April, IBM reported first-quarter revenue of $14.5 billion up 3% YOY. Diluted EPS came in at $1.68 which was 24% over the same period for last year. The company enjoyed strong demand and growth in the software segment. In particular, Red Hat saw a 9% revenue increase and mid-teens bookings growth.

Further, investors are noting that IBM has been shifting its focus towards hybrid cloud computing and artificial intelligence (AI). Recently, management has announced it is acquiring HashiCorp. This acquisition aims to integrate HashiCorp’s cloud infrastructure automation tools with IBM’s hybrid cloud and AI capabilities. Also, IBM is investing in emerging technologies like Quantum computing, which could provide long-term growth opportunities.

Therefore, IBM’s commitment to dividends is a major draw for income investors. Having increased their quarterly payout for 29 consecutive years, IBM currently boasts a healthy dividend yield of over 3.8%. The company’s strong cash position further bolsters the confidence in the sustainability of their dividend payouts.

Since January, IBM stock has returned about 4.5%. The shares are trading at 17.5 times forward earnings and 2.5 times sales. Finally, the 12-month median price forecast for IBM stands at $190.00.

On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Tezcan Gecgil, PhD, began contributing to InvestorPlace in 2018. She brings over 20 years of experience in the U.S. and U.K. and has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Publicly, she has contributed to investing.com and the U.K. website of The Motley Fool.

Artificial Intelligence, Biotech, Cloud, Commodities, Consumer Discretionary, Consumer Staples, Healthcare, Quantum Computing, Retail, Software, Technology

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