High dividend yield stocks are attractive to investors looking for steady positive cash flows. Here are five stocks to add to your portfolio: Coca-Cola, Verizon Communications, Amgen, Broadcom, and Cisco Systems.
Dividends are one way for a company to reward its shareholders. Management’s task is to maximize shareholders’ wealth, and a company making a profit typically distributes the profit to the shareholders in the form of a dividend.
In the United States, companies pay a quarterly dividend. This contrasts with European companies, for instance, which pay either an annual or a semiannual dividend. The advantage of a quarterly dividend is that by reinvesting the proceeds by buying more shares in the company, the power of compounding leads to more income down the road.
But not all companies pay a dividend. For instance, Amazon has never paid one. However, most of them do, and some investors prefer only dividend-paying stocks like the legendary Warren Buffett.
The dividend yield is one metric to select the companies that pay the highest dividend. It is calculated by dividing the annual dividend by the stock price, and values between 2% and 4% are considered strong, while anything above might signal some problems, but not necessarily.
So here are five high dividend yield stocks from the United States to add to your portfolio: Coca-Cola, Verizon Communications, Amgen, Broadcom, and Cisco Systems.
The Coca-Cola Company (NYSE:KO) increased its annual dividend for the past 59 consecutive years. The dividend yield for 2022 is 2.77%, forecast to reach 3.08% by 2025.
Verizon Communications (NYSE:VZ) has a dividend yield higher than 4% – more precisely, 4.75%, and the payout ratio is 46.94%. Moreover, the 5-year growth rate is 2.10%, and the company increased its annual dividend for the past 17 consecutive years.
Amgen (NASDAQ:AMGN) increased its annual dividend for the past 10 consecutive years, and the dividend yield is 3.50%. On top of that, the company operates with a gross profit margin for the past twelve months of 75.16%, higher than the sector median by 33.63%.
Broadcom (NASDAQ:AVGO) increased its annual dividend for the past 10 consecutive years too. Also, the forward dividend yield is 2.84%, while the payout ratio is 53.21%.
Cisco Systems (NASDAQ:CSCO) operates with a gross profit margin higher than the sector median by 27.68%. Its forward dividend yield is 2.7%, and the company increased its annual dividend for the past 10 consecutive years.