One of the greatest strategies for investors to follow is actually a very simple one, look for stocks that can provide solid total return. Total return is the combination of the increase in a stock’s price and any dividends the stock may pay. Obviously, stocks that don’t pay dividends only provide gains if the stock itself trades higher. While dividend-paying stocks provide income even if the stock trades sideways or down.
The UBS Quality Growth at a Reasonable Price (Q-GARP) portfolio has absolutely clobbered the S&P 500 since its inception in 2007. One of the reasons why is that the portfolio managers have selected some stocks that pay outstanding dividends. We screened the list for the four top-paying dividend stocks.
Boeing
Shares of this top aerospace industrial have dropped a whopping 14% since the beginning of the year. Boeing Co. (NYSE: BA), together with its subsidiaries, designs, develops, manufactures, sells, services and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services worldwide.
Top Wall Street analysts have increased confidence in continuing good demand, and they note that the company has made announcements in the past that support the analysts’ thesis that the productivity and margins will continue to improve. 787 execution is good as the company works through the backlog, and cash flow looks to be strong with 787 deliveries and C-17 orders. Some Wall Street analysts also point to low oil prices as a bullish indicator for the top carriers that are Boeing’s big customers.
Boeing investors are paid a very solid 3.45% dividend. The Thomson/First Call consensus price target for the stock is $137.95. The stock closed trading on Tuesday at $126.36 per share.
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Colgate-Palmolive
This top dividend payer is also a very safe play for investors. Colgate-Palmolive Co. (NYSE: CL) is the stock to buy in consumer staples. The company continues to deliver solid execution and is one of the best-positioned companies in the consumer staples sector, given its strong brands in attractive categories, particularly oral care.
More than half (52%) of total revenues at Colgate-Palmolive are derived in faster-growth emerging economies, and the company maintains leading or near-leading market shares across the Brazil, Russia, India, China (BRIC) regions. While those have slowed over the past year, a pickup in growth could be coming.
Colgate-Palmolive’s board of directors recently increased the quarterly common stock cash dividend by 3%. The company has declared a new quarterly dividend of $0.39 per share on its common stock. The dividend will be paid on May 16, 2016, to shareholders on record at the close of business on April 22, 2016.
Colgate-Palmolive investors are now paid a 2.3% dividend. The consensus price target for the stock is set at $69.26. Shares close near that on Tuesday at $68.59.
Home Depot
This company remains the undisputed leader in the home improvement retail category. Home Depot Inc. (NYSE: HD) is the world’s largest home improvement specialty retailer, with 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. In fiscal 2014, Home Depot said it had sales of $83.2 billion and earnings of $6.3 billion. The company employs more than 370,000 associates.
With the mild winter due to the el-Niño effect, and spring right around the corner, some people think that can be a benefit to Home Depot and other home improvement companies. In addition, the continued strength in the housing market could also bode well for this company. Earnings per share gains have consistently been in the 15% to 20% range, and a consensus of analysts is forecasting earning increases to continue to grow at about 15% annually for another two to three years.
Home Depot investors are paid a 2.13% dividend. The consensus price objective for the shares is at $140.55. Shares closed most recently at $129.781.
Rockwell Automation
This company is another one of the top industrials on the Q-GARP list. Rockwell Automation Inc. (NYSE: ROK) provides industrial automation power, control and information solutions. It operates in two segments. The Architecture & Software segment provides control platforms, including controllers, electronic operator interface devices, electronic input/output devices, communication and networking products, and industrial computers that perform multiple control disciplines and monitoring of applications, such as discrete, batch and continuous process, drives control, motion control and machine safety control.
The Control Products & Solutions segment offers low and medium voltage electro-mechanical and electronic motor starters, motor and circuit protection devices, AC/DC variable frequency drives, push buttons, signaling devices, termination and protection devices, relays, and timers, as well as various packaged solutions, such as configured drives and motor control centers to automation and information solutions.
Rockwell investors are paid a solid 2.70% dividend. The consensus price target is set at $97.90. The stock closed way above that level Tuesday at $107.18 per share.
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There you have it, four top companies that all stand out in their respective sectors and pay dividends. Not only do they pay them regularly, all four companies have increased their dividends on a regular basis over the years. They all make sense for more conservative growth and income accounts.
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