5 Trending Dividend Stocks To Watch For Your Long-Term Income Investing Portfolio
When looking for the best dividend stocks to buy in the stock market, the yield isn’t everything. While a high yield is certainly enticing, the reality is that it could be short-lived. If you are an income investor in it for the long run, you would know that steadily rising payouts are equally as important when it comes to locating high dividend stocks to buy in 2021. After all, when it comes to dividend stocks, stability is the name of the game.
Of course, dividend stocks may not come close to keeping pace with top growth stocks as of late. Then again, when you combine the robust financial results, strong price gains, and a high dividend yield, an investment in dividend stocks wouldn’t fare too far off. More importantly, rising dividends allow investors to benefit from the magic of compounding. As Ben Franklin famously said, “Money makes money. And the money that money makes, makes money.” That’s what makes the high-yielding dividend stocks so attractive to value and long-term investors. Considering all these, do you have a list of top dividend stocks to buy in the stock market today?
Best Dividend Stocks To Watch Right Now
- Lumen Technologies (NYSE: LUMN)
- Microsoft Corporation (NASDAQ: MSFT)
- NextEra Energy Inc. (NYSE: NEE)
- Coca-Cola Co. (NYSE: KO)
- Advance Auto Parts (NYSE: AAP)
Lumen Technologies
First, up on the list, Lumen Technologies is a telecommunications company that pays a substantial dividend. As it stands, the company has a dividend yield of around 7%. But that doesn’t mean it comes without risk. Its path to grow over the medium term is still quite uncertain, but the upside is that the company is posting consistent profits. Therefore, you might say that LUMN stock could enjoy significant upside should the company’s growth continue to show signs of progress.
From its first-quarter results, revenue fell 3.8% year-over-year, and adjusted EBITDA fell 2%. Given these declines, how could LUMN stock still have gains of over 50% year-to-date? Well, that could be because of the company’s disclosure of its new product breakdown that perhaps encouraged investors. In brief, the company’s fiber-based products grew year-over-year across all channels. As a result, the growth in these newer segments has led some investors to believe that Lumen’s declining top line will eventually stabilize. The company also highlighted partnerships with major companies like IBM (NYSE: IBM) Cloud and T-Mobile. If you believe that the company could bump up its revenue growth through these partnerships, would you include LUMN stock on your watchlist today?
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Microsoft Corporation
Microsoft is a leader in artificial intelligence and cloud computing. Not many tech stocks could claim the same track record of success that Microsoft has. From its most recent quarter fiscal, the company posted annualized revenue growth of 19%. This marks its biggest quarterly increase since 2018. According to CEO Satya Nadella, massive strides in Microsoft’s gaming and cloud divisions are to thank for this performance. Its dividend yield of 0.9% may not attract serious income investors, but its low cash dividend payout ratio indicates there is plenty of room for future hikes.
Recently, LaLiga, Spain’s premier football association, and Microsoft announced an expansion of their partnership focused on digitally transforming the sports experience globally. The companies will also collaborate on developing technology solutions for the media and entertainment industry through LaLiga’s technology offering, LaLiga Tech. This deepens their engagement with millions of people around the world, while potentially bringing new business models to the market with Microsoft’s cloud and AI capabilities. By and large, could all this make MSFT stock a top dividend stock to buy right now?
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NextEra Energy
NextEra is a renewable energy company headquartered in Florida. The company owns Florida Power & Light Company, which is the largest rate-regulated electric utility in the U.S. It also owns a competitive energy subsidiary, NextEra Energy Resources, which is the world’s largest producer of solar and wind energy today. NEE stock has been trading sideways since the start of the year. However, this could be a buying opportunity for investors who believe in the long-term potential of clean energy. The company’s latest dividend yield is 2.13%.
NextEra Energy Resources is one of the company’s divisions that provides long-term, contract-based renewable power to others. The company claims it is the largest generator of solar and wind power in the world. This Florida utility is very much leading the charge in renewables and should be a major growth engine for years to come. On top of that, the company along with OPAL Fuels announced plans to build Minnesota’s first renewable natural gas facility. In detail, this could produce over 6 million gas gallon equivalents of renewable natural gas per year. With these developments, would you consider investing in NEE stock now?
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Coca-Cola
Coca-Cola is a familiar name that requires no further introduction. The beverage giant has a presence in more than 200 countries and territories. Also, the company’s portfolio of brands includes Coca-Cola, Sprite, and Fanta among others. Coca-Cola is also a dividend company that paid $7 billion to shareowners in 2020 alone. The beverage giant is also Berkshire Hathaway’s (NYSE: BRK.B) longest-tenured holding. It also makes up a significant portion of Buffett’s annual dividend income. As it stands, Coca-Cola has a dividend yield of around 3%.
From its first-quarter report, net revenue came in 5% higher year-over-year to $9 billion. The company also posted earnings per share of $0.52. Coca-Cola also ended the quarter with $1.4 billion in cash. In addition, it cited that volume trends are steadily improving each month throughout the quarter. Despite its global brand and improving fundamentals, Coca-Cola is not resting on its laurels. This is apparent with its new expansion into the hard seltzer market. With the beverage giant making a mark in the alcoholic beverage industry, will you add KO stock into your portfolio?
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Advance Auto Parts
Advance Auto Parts (Advance) is an auto parts retailer that has been resilient throughout the pandemic. The company’s stock price recently surged to an all-time high. That could simply be because the company is seeing strong demand for its products. If you have been paying close attention to the automotive market, you would know that the rise in car prices is far outstripping inflation, deterring consumers from buying new cars. As it stands, Advance currently yields a 2.1% dividend annually.
From Advance’s first-quarter earnings, sales came in 23% higher to $3.3 billion. This came as comparable-store sales surged nearly 25% from the year-ago period. Advance’s CEO mentioned that “both DIY and professional customers turned to Advance for their automotive needs amid a strong industry backdrop.” While many investors remain focused on near-term tailwinds, it’s also worth keeping in mind that a speedy transition to electric vehicles could weigh on the demand for these auto parts. But with chip shortages and production shutdowns affecting new cars, investing in AAP stock could still turn out to be a profitable endeavor.
