Dividend stocks are income investor favorites because they not only pay cash to shareholders but also boost their payouts over time. These stocks are generally less volatile in nature and hence are often more dependable when it comes to long-term investment planning.
Dividend-paying stocks are particularly beneficial amid a low interest rate environment, as these stocks offer substantial yields on a regular basis. Moreover, such stocks are historically proven to outperform in the long term and are quite reliable in terms of wealth creation.
Yield is basically a stock’s annual dividend rate divided by its share price. A dividend yield can increase if a company boosts its payout. The yield can also rise if the share price falls. In fact, an ultra-high yield due to a plunging stock price may signal that a company is in trouble and is likely to cut or even suspend the dividend.
Hence, investors should keep in mind that not every company can retain its dividend-paying momentum. Thus, a cautious strategy needs to be in place while selecting the best dividend stocks with potential for steady returns.
Choosing the right dividend stocks can be a daunting task as it requires careful consideration of both the past performance of the company and its prospects. A stock that has delivered strong performance in the past but is likely to face troubled times ahead definitely does not qualify as an attractive pick.
We note that an impressive current-year dividend yield and a strong dividend yield history are also important for identifying strong dividend-paying stocks.
Here we have used the Zacks Stock Screener to narrow down to five stocks that offer current and historical dividend yield of more than 3%, have a favorable Zacks Rank #1 (Strong Buy) or 2 (Buy) and have a market cap of $1 billion or more.
5 Stocks Eorth Buying
CenterPoint Energy, Inc. (CNP - Free Report)
CenterPoint Energy, Inc. operates as a public utility holding company in the United States. The company’s Electric Transmission & Distribution segment serves retail electric providers, municipalities, electric cooperatives, and other distribution companies.
CenterPoint Energy currently offers a dividend yield of 4.2% and has a five-year historical dividend growth rate is 6.7%. It holds a holds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
DTE Energy Company (DTE - Free Report)
DTE Energy Company engages in the utility operations. The company’s Electric segment is involved in the generation, purchase, distribution, and sale of electricity to approximately 2.2 million residential, commercial, and industrial customers in southeastern Michigan.
This Zacks Rank #2 stock currently has an impressive dividend yield of 3.4%. The company’s five-year historical dividend growth rate is 5.5%.
The GEO Group, Inc.
The GEO Group, Inc. provides government-outsourced services and specializes in the management of correctional, detention, and re-entry facilities, and the provision of community based services and youth services in the United States, Australia, South Africa, the United Kingdom, and Canada.
The GEO Group carries a Zacks Rank #2 and currently has a robust dividend yield of 7.4%. Its five-year historical dividend growth rate is 24.1%.
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Innophos Holdings, Inc. (IPHS - Free Report)
Innophos Holdings, Inc., through its subsidiaries, produces performance-critical and nutritional specialty ingredients with applications in food, beverage, dietary supplements, pharmaceutical, oral care, and industrial end markets. It operates through Specialty Phosphates US & Canada, Specialty Phosphates Mexico, and GTSP & Other segments.
Innophos, which sports a Zacks Rank #1, currently has a dividend yield of 3.6%. The company’s five-year historical dividend growth rate is 16.3%.
Rio Tinto plc (RIO - Free Report)
Rio Tinto plc, a mining and metals company, finds, mines, and processes mineral resources.
This Zacks Rank #1 stock currently has an impressive dividend yield of 3.9%. The company’s five-year historical dividend growth rate is 9.2%.
Where Do Zacks' Investment Ideas Come From?
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