Top Performing Income Stocks

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Contributor, Benzinga
July 22, 2024

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Investors look for assets that can generate returns on their money. The stock market is a popular avenue for many investors because of the number of choices, historical returns from market indices and other factors. You can sell stocks to realize capital gains, but some stocks reward you with steady payments just for holding onto them. These stocks are known as income stocks. Discover some of the top income stocks to consider.

Quick Look at the Top Performing Income Stocks:

Deep Dive

Investors looking for consistent cash flow from their stock portfolios may want to consider these top income stocks. 

1. Procter & Gamble Co. (NYSE: PG)

Procter & Gamble Co. (NYSE: PG) has an umbrella of brands that provide staple consumer goods. The company attracts lifelong customers through its razors, laundry products, home products and other goods. 

Procter & Gamble has been one of the most reliable income stocks. The corporation has paid out dividends for 133 consecutive years. This also includes an ongoing 67-year stretch of dividend hikes. The stock’s dividend hikes have helped investors keep up with inflation, and the company has a lot more to give to investors. Shares are up by 84% over the past five years.

2. J.P. Morgan & Co. (NYSE: JPM)

J.P. Morgan & Co. (NYSE: JPM) is the largest U.S. bank by assets under management. That type of size also explains why the bank has outperformed many of its peers.

J.P. Morgan has a good history of raising its dividend, other than a brief two-year pause. The company has steadily raised its dividend by 10% or more for the past several years before the pandemic. If the company gets back to raising the dividend at that rate, long-term shareholders will continue to get rewarded.

3. Broadcom Inc. (NASDAQ: AVGO)

Broadcom Inc. (NASDAQ: AVGO) is a top semiconductor company that stands to benefit from the rise of artificial intelligence (AI). The company produces AI chips and semiconductor chips for other important devices and technologies. Broadcom has rewarded investors with an excellent dividend growth rate.

4. NextEra Energy Inc. (NYSE: NEE)

NextEra Energy offers clean energy solutions and owns the largest electric utility unit in the U.S., Florida Power & Light Company. That one utility company powers the homes of 5.8 million customers, which comes to over 12 million families across Florida. The company also has commercial nuclear power units in Florida, New Hampshire and Wisconsin. 

Annual dividend hikes of 10% or more have been normal for the company, much to the benefit of long-term investors.

5. Prudential Financial Inc. (NYSE: PRU)

Prudential Financal Inc. (NYSE: PRU) is an insurance conglomerate with steady cash flow and a generous dividend yield.

Prudential isn’t just an insurance company. The firm also offers retirement planning, asset management and other financial services. 

6. ExxonMobil Corp. (NYSE: XOM)

People need gas for their vehicles, and Exxon Mobil delivers. ExxonMobil Corp. (NYSE: XOM) was a smaller piece of the Standard Oil conglomerate, which was founded in 1870. The company’s profits depend on changes to the oil supply and overall demand for the commodity. Shares are flat for the year but have gained 33% over the past five years.

7. Stag Industrial Inc. (NYSE: STAG)

Stag Industrial Inc. (NYSE: STAG) is a commercial real estate investment trust (REIT) that invests in warehouses. Many companies like Amazon and FedEx need extra space to store goods. These tenants have the finances to continue making monthly payments. Warehouse space is one of the last costs these companies are likely to consider cutting.

These trusts, also known as REITs, must distribute 90% of their taxable income to investors. However, payouts count as ordinary income instead of qualified dividends, a key factor to consider when assessing how much you will owe in taxes.

The company owns 558 buildings in 41 states that encompass 111.1 million square feet. Those types of numbers translate into stable cash flow for investors.

Pros

Investing in income stocks has many benefits. You can receive predictable income distributions that gain value each year. Many dividend-paying companies raise their dividends each year. You can also reinvest the dividend into the stock before you retire so you get more shares. Income stocks can also appreciate and provide shareholders with long-term value.

Where to Buy

Investors can buy income stocks through several brokers. These are some of the top choices to consider.

Frequently Asked Questions 

Q

Are dividend stocks worth it?

A

Dividend stocks can be worth it. Some stocks are strictly for income, while others combine income and growth.

 

Q

What dividend stocks pay monthly?

A

Some dividend stocks pay monthly, such as STAG, a company that made this list. You can also buy multiple dividend stocks with different payment schedules to receive monthly dividends.

 

Q

How much of your income should you invest in stocks?

A

Every investor should assess their ability to cover immediate expenses and save up for 1-2 year goals before deciding how much to invest. If you feel nervous about covering bills, you may want to dial back on your investments for a bit.

Best Income Stocks Methodology

The best income stocks methodology focused on companies with dividend yields of 2% or higher. Companies with lower yields had to exhibit exceptional share price appreciation or dividend growth to make it on the list. Stocks with higher dividend yields didn’t have to exhibit those two factors, but the list avoids high-yielding stocks with declining revenue and earnings.

Marc Guberti

About Marc Guberti

Marc Guberti is an investing writer passionate about helping people learn more about money management, investing and finance. He has more than 10 years of writing experience focused on finance and digital marketing. His work has been published in U.S. News & World Report, USA Today, InvestorPlace and other publications.