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Best Dividend Paying Stocks

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Home Depot (NYSE: HD)

The Home Depot Inc. is the world’s largest home improvement retailer. It has more than a million products and over 2,200 stores across the U.S., Canada and Mexico. The average Home Depot store is around 105,000 square feet in space and also has an e-commerce platform to help its customers shop at their convenience.

The retail stock has a market cap of $299 billion and an EPS of $10.91. It has an annual dividend yield of $6 per share. Home Depot has high liquidity and trades over 1.2 million shares per day. It generated revenue of $110 billion in 2019.

277.71 -0.09 (-0.03%)
Volume 0.00K Market Cap 298.98B
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140.63 - 292.95
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Broadcom (NASDAQ: AVGO)

Broadcom Inc. is a global leader in providing technology solutions for its customers. It designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. Its portfolio of products is used across industrial sectors such as data center, networking, software, broadband, wireless and storage.

The tech stock has a market cap of $146 billion and an EPS of $5.33. It has an annual dividend yield of $13 per share. Broadcom has high liquidity and trades more than 443,000 shares per day. It generated revenue of $22 billion in 2019.

401.58 0 (0%)
Volume 0.00K Market Cap 162.44B
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155.67 - 402.16
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MetLife (NYSE: MET)

MetLife is one of the largest insurance providers in the world, covering business clients in 5 different continents. MetLife offers life and dental insurance, plus disability, death and accident coverage. The company has a $39 billion market cap and has been in existence since 1863.

MetLife has been increasing its dividend payout since 4Q of 2013 and currently yields 4.52%. The company has been steadily decreasing its debt load since 2017 while increasing shareholder equity. With a debt to equity ratio of 0.21 and stable free cash flow, MetLife is poised to be a long-term income driver.

46.18 0 (0%)
Volume 0.00K Market Cap 41.56B
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22.85 - 53.28
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Dividend Paying Stock Movers of the Day

See where these stocks are lined up in the premarket, market and after market.

The data provided below is intended for educational purposes only, we have included the session dates for your reference.

Premarket Dividend Paying Stocks
Symbol Last Price Change % Change Trade
CRF 11.08 0.08 0.72% Trade
BEP 63.44 0.29 0.45% Trade
MBT 8.615 0.035 0.4% Trade
STX 58.64 0.16 0.27% Trade
CLM 11.2475 0.027 0.24% Trade
Symbol Last Price Change % Change Trade
WMC 3.05 -0.24 -7.3% Trade
CVX 87.155 -4.155 -4.56% Trade
UNM 22.205 -0.935 -4.05% Trade
MAIN 31.11 -1.24 -3.84% Trade
PBCT 12.38 -0.48 -3.74% Trade
CNP 23.2 -0.87 -3.62% Trade
MFA 3.685 -0.135 -3.54% Trade
CIM 10.225 -0.365 -3.45% Trade
PRU 75.42 -2.67 -3.42% Trade
MMP 41.21 -1.3 -3.06% Trade
Market Dividend Paying Stocks
Symbol Last Price Change % Change Trade
BTI 35.94 0.63 1.78% Trade
Symbol Last Price Change % Change Trade
After Hours Dividend Paying Stocks
Symbol Last Price Change % Change Trade
CVX 88 0.79 0.9% Trade
WMC 3.09 0.01 0.32% Trade
CLM 11.28 0.035 0.31% Trade
CNP 23.25 0.06 0.25% Trade
MO 39.94 0.08 0.2% Trade
ABBV 104.99 0.1 0.09% Trade
MAIN 31.16 0.03 0.09% Trade
IBM 123.6 0.06 0.04% Trade
UNM 22.25 0.01 0.04% Trade
UVV 45.51 0.02 0.04% Trade
Symbol Last Price Change % Change Trade
BEP 62 -1.54 -2.43% Trade
MFA 3.68 -0.015 -0.41% Trade
STX 58.78 -0.03 -0.06% Trade
CIM 10.2502 -0.005 -0.05% Trade
WPC 69.2187 -0.031 -0.05% Trade
GPC 98.3823 -0.028 -0.03% Trade

Dividend-paying stocks have long been a part of investment portfolios geared toward providing income instead of long-term capital appreciation. But since companies that pay big dividends are often older, more established firms, they fail to garner the same attention as the latest high-flying growth stocks. 

Stocks that pay dividends are still a crucial part of an investment strategy, especially if you’re looking for consistent income. While the price appreciation might lag the broader market, dividend-paying firms have established profits and are usually safer investments than risky growth stocks. Still, a healthy dividend isn’t a golden ticket to wealth and investors must pay close attention to the underlying numbers of the business. A big dividend combined with poor cash flow or large debt loads could end up as a very poor investment.

Overview: Dividend Paying Stocks

When a company makes a profit, it doesn’t just sit in the pockets of the CEO. When profits are announced, the company board has to decide what to do with the extra cash. Many companies reinvest the money into research or development to continue growing the firm, but some companies aren’t concerned with expansion or entering new markets.

When a company doesn’t have an internal use for its leftover profits, it will return those profits to shareholders in the form of a dividend. Most dividend-paying firms disperse dividend payments each quarter and you need to own the stock by the “ex-dividend date” to make yourself eligible for the payment.

Dividend calculations take in a number of factors, such as:

  • Sales growth projections
  • Plans for expansion
  • Average dividend yield in the sector
  • Debt levels
  • Current and future cash flow

Be cautious of companies offering dividends that seem too good to be true. A stock with a 10% dividend might have just endured a steep price decline that makes the dividend yield look more attractive. Kinder Morgan is a popular example: After piling on too much debt, the pipeline company was forced to slash its dividend by 75%, and the stock was crushed as a result.

Be sure to differentiate between ordinary dividends and qualified dividends as well. Ordinary dividends are taxed at the income level while qualified dividends are taxed at the capital gains level. For your dividends to be considered qualified dividends, you must hold the shares for at least 60 days. If you’ve held the shares for less than 60 days, you’ll receive the same dividend, but it will be taxed as income. 

Best Online Brokers for Dividend-Paying Stocks

Dividend-paying stocks aren’t difficult to find since they often have long histories and popular stories. Since dividend-paying stocks are meant for long-term investing instead of short-term trading, finding a commission-free broker isn’t as crucial since you won’t be racking up transaction costs. 

Still, if you can avoid the temptation to overtrade, a commission-free discount broker is suitable for both investors with long time horizons and investors looking to day or swing trade.

Commissions
$0
Account Minimum
$0
Get started securely through Webull’s website
Commissions
$0
Account Minimum
$0
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • Commission-free trading in over 5,000 different stocks and ETFs
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Leverage of 4:1 on margin trades made the same day and leverage of 2:1 on trades held overnight
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
Commissions
$0
Account Minimum
$0
Get started securely through TradeStation’s website
Commissions
$0
Account Minimum
$0
1 Minute Review

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders
Pros
  • Comprehensive trading platform and professional-grade tools
  • Wide range of tradable securities
  • Fully-operational mobile app
Cons
  • Confusing pricing structure to leave new traders with a weak understanding of what they pay
  • Cluttered layout to make navigating TradeStation’s platform more difficult than it should be
Commissions
$0 $6.95 for OTC Stocks
Account Minimum
$0
Get started securely through TD Ameritrade’s website
Commissions
$0 $6.95 for OTC Stocks
Account Minimum
$0
1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For
  • Novice investors
  • Retirement savers
  • Day traders
Pros
  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
Cons
  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates

Features to Look for in Dividend Paying Stocks

  1. Manageable debt load: Like with Kinder Morgan, an unsustainable debt load could spell the end of a generous dividend. If a company is overleveraged and forced to service debts, the dividend is often the first thing on the chopping block.
  1. Dividend payout growth: Since stock prices can gyrate wildly, paying attention to the dividend yield doesn’t give us as much information as the actual payout amount. Keep a close eye on the growth of the dividend payment itself; if a company has a long history of increasing dividend payouts (10-20 years), it’s probably a good bet that it will continue to increase.
  1. Enough cash flow to keep paying: This is perhaps the most important feature of any stock, let alone a dividend payer. Cash flow is king and without it, no company would be able to continue to pay its dividend. If a company you’re looking at has consistent cash flow concerns, it could mean the dividend is in trouble of being chopped.

Dividends Provide Steady Income

Dividend-paying stocks are a great addition to portfolios because they’re often less risky than growth stocks. If you’re an investor approaching the end of your time horizon, dividend-paying stocks can provide steady income AND longer-term stock price appreciation.

But dividends aren’t free and tax implications exist for different types. Qualified dividends get special tax treatment like capital gains, but ordinary dividends are taxed at the income level. If you’re receiving ordinary dividends, a tax-sheltered account like a Roth IRA is the best vehicle.

Be sure to discuss taxes with an advisor before putting dividend-paying stocks into an investment account. Understand that dividend stocks aren’t going to make big headlines or double in price in just 6 months. If you want to buy dividend stocks, you’ll need to hold them long enough to benefit from the consistent dividend payout increases. 

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