Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.
A recent study from the Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973-2022). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).
Stock investing is often fraught with remorse as, in many cases, investors start to size up a company, but for whatever reason, even if they think it’s a good idea, they pass on buying. Then, as so often happens, the stock takes off, and the remorse sets in.
We screened our 24/7 Wall St. dividend research database and came up with three dividend stocks we should have been buyers of last year and one we like now. All are rated Buy by top Wall Street firms.
Three dividend Stocks I wish I had bought in 2023
Verizon
Suburban Verizon Store
This communications giant was on sale last fall. Verizon Communications (NYSE: VZ) | VZ Price Prediction engages in the provision of communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide.
It operates in two segments:
- Verizon Consumer Group
- Verizon Business Group
The legacy telecom giant kicks off the list of stock that should have been grabbed in 2023. While the company is still offering investors an incredible 6.54% dividend, that figure was demonstrably higher in October of 2023, when the shares traded almost 25% lower than today.
On October 6th, 2023, Verizon printed a low of $30.14; at that level, the stock paid shareholders an incredible 8.83% dividend. The stock closed trading that day at $30.85.
Verizon and AT&T Inc. (NYSE: T) had issues with buried lead cables last year, and both companies faced some lawsuits over environmental concerns. Verizon was also accused of misleading shareholders. https://www.datacenterdynamics.com/en/news/verizon-accused-of-misleading-shareholders-over-lead-cables/
While the lawsuits may still be pending, the stock has sharply increased and closed recently at $41. 13.
Simon Property Group
North Carolina shopping mall
This real estate giant suffered the same fate as many top real estate stocks last year. Simon Property Group (NYSE: SPG) is a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment, and mixed-use destinations and an S&P 100 company.
The company’s properties across North America, Europe, and Asia provide community gathering places for millions of people every day and generate billions in annual sales.
With interest rates rising sharply over the last two years, many companies that were interest rate sensitive (real estate, utilities, and financials) were murdered, including quality companies like Simon Property Group.
By May of 2023, the shares had plunged to $102.36. In October, when the Federal Reserve announced that the rate increases that had been the headwind in the face of interest rate-sensitive stocks would be ending, the shares took off and have been up nearly 50% since the fall.
The stock was seen recently at $150.83 and still pays shareholders a handsome 5.15% dividend.
Energy Transfer LP
Oilfield worker opening valve
Despite a strong run, this energy MLP is still offering investors an outstanding entry point and a hefty 8.52% dividend. Energy Transfer LP (NYSE: ET) owns and operates natural gas transportation pipelines, natural gas storage facilities in Texas and Oklahoma, and approximately 20,090 miles of interstate gas pipelines.
It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users.
The oil and gas industry has been at odds with the current administration since 2021, and as the price for oil and gas started to weaken last year, many of the top companies, including Energy Transfer, were struck.
By June of last year, West Texas Intermediate had fallen to $67.82, Energy Transfers’ stock price had slid to $11.68, and it paid an incredible 10.78% dividend to shareholders. Since then, the shares have rallied a stunning 28% to close recently at $14.94.
One dividend stock I like now
Pfizer
Pfizer sign on New York building.
This top pharmaceutical stock was the COVID-19 sweepstakes winner but has fallen since the pandemic waned. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products in the United States, Europe, and internationally.
The company offers medicines and vaccines in various therapeutic areas, including cardiovascular, metabolic, migraine, and women’s health.
When the COVID-19 pandemic spread across the country in 2020, the frantic search for a vaccine was the biggest story of the year, and Pfizer was one of the many companies pursuing the cure. Pfizer combined with BioNTech to produce a widely used vaccine, and sales especially to the government soared.
Not only did sales start to dry up for the company, but competition from Moderna, Inc. (NASDAQ: MRNA), which is reported to elicit a more robust immune response, has taken its toll on Pfizer’s revenue.
While the shares peaked in 2021 at nearly $60, they were still trading at over $50 in January 2023. Since then, the stock has almost been cut in half and was recently seen at $28. The stock yields a magnificent and very dependable 6.10% at that price point.
For investors worried about the company, Pfizer was founded in 1849 and is one of the world’s most extensive and most profitable pharmaceutical stocks. With a vast product catalog and many widely used drugs, Pfizer will likely remain here for decades.
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