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Investing can be hard. Especially if you just figured out that you want to start to do that. There are so many options – bonds, stocks, derivatives, commodities, real estate, cryptocurrencies. Which to choose? Here, we overlook some of the stocks that many of the world’s best investors have chosen to invest in, mainly because they pay out dividends.
Also, investing in companies that pay a share of their income sounds like a fair game. To be clear, unprofitable companies wouldn’t offer to pay out dividends, so this is kind of considered as a blind man’s game. However, it is not that easy.
These top five dividend-paying companies together pay out more than $70 billion to their shareholders annually. So take your time, plan, and possibly, after reading this article, you will want to invest in these kinds of companies.
Microsoft – $15.59 Billion
While on the surface Microsoft‘s (MSFT) 1.5% dividend yield doesn’t look that promising, the fact is that the company is generating massive profits year-after-year. Next year, Microsoft plans to pay out over $15 billion to its investors, and that makes it the biggest dividend-paying stock in the market and on the planet.
Experts point out that in the last years, Microsoft has switched from low-margin product sales to high-margin service revenue. Currently, they are paying out less than 40% of Wall Street’s projected 2020 earnings per share, but these experts claim that the Microsoft’s payout could and should become higher in the upcoming years.
AT&T – $14.91 Billion
AT&T (T) has a dividend yield of 5,5% and it is giving nearly $15 billion to its investors annually. Recently the company has acquired Time Warner, CNN, TNT, and TBS networks which makes it quite a large company holder. Also, the company is mainly leading the U.S. switch to 5G networks, and is one of the most popular dividend-paying stocks which is in every investor’s portfolio.
ExxonMobil – $14.72 Billion
Generally, oil and natural gas are considered to be relatively volatile commodities. However, this hasn’t stopped ExxonMobile (XON) to pay out $14.72 billion to its shareholders. It is one of the largest chemical manufacturers in the world and has a hedged business model. Basically, anything that happens to the market – the price of oil crashes, the price of gas rises or the price of crude declines – the company is benefitting in every scenario. To put it easy – it is a steady company with a very good business model.
Apple – $13.92 Billion
For those who follow Apple (AAPL), it is already known that the company is expanding its business model. It is discovering new lands in the service industry and now is not only offering products to their customers but also a handful of worthy services. For example, soon-to-be-launched AppleTV+ streaming service will come out in November 1st. Also, now the company has its own credit card and Apple Music is slowly gaining more and more traction in the music streaming industry.
Additionally, just as it the AT&T’s case – 5G technologies could be massive factor which could drive more income for the company, which means – more dividend money.
JPMorgan Chase – $11.52 Billion
First of all, this is the first central bank in the list and second – it’s dividend payout has more than doubled in the last three years. As experts point out, one of the primary factors why JPMorgan Chase (JPM) is on this top is because the Federal Reserve has lifted the federal funds rate 25 basis points nine times in three years. These moves by the Federal Reserve have allowed JPM to profit pretty nicely.
Experts claim that JPM has a very disciplined managing team and they keep the bank to enter riskier investment opportunities. Whether we can expect similar growth in the upcoming years, I’m not so sure, but experts say that we should, it is safe to say that, currently, JPM is the leader in U.S. major bank sector as the biggest dividend stock among banks.