Investors love dividend stocks because they provide dependable income and a great opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or portfolio consists of income and stock appreciation.
For example, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%—10% for the increase in stock price and 3% for the dividends paid.
We screened our 24/7 Wall Street Large Cap dividend stock screen, looking for bargain-priced stocks that pay at least a 7% dividend. Passive income investors are big fans of quality stocks that pay dependable dividends, and we found five that look like solid ideas now. In addition, all of the companies are rated Buy by top Wall Street firms.
Altria
This maker of tobacco products offers value investors a great entry point now and a rich 8.81% dividend. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.
The company provides cigarettes primarily under the Marlboro brand;
- Cigars and pipe tobacco, principally under the Black & Mild brand
- Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
- on! Oral nicotine pouches.
It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.
Altria owns over 10% of Anheuser-Busch InBev (NYSE: BUD), the world’s largest brewer. Last week, the company announced it would sell 35 million of its 197 million shares through a global secondary offering.
Energy Transfer
The top master limited partnership is a safe way for investors looking for energy exposure and income, as the company pays a massive 9.40% distribution. Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins.
The company is a publicly traded limited partnership with core operations that include:
- Complementary natural gas midstream
- Intrastate and interstate transportation and storage assets
- Crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets
- NGL fractionation and various acquisition and marketing assets
Energy Transfer owns and operates more than 114,000 miles of pipelines and related assets in 41 states, all of which are significant U.S.-producing regions and markets. This further solidifies its leadership position in the midstream sector.
Through its ownership of Energy Transfer Operating, L.P., the company also owns Lake Charles LNG Company, the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco LP (NYSE: SUN), and the public partner interests and 39.7 million standard units of USA Compression Partners, LP (NYSE: USAC).
Plains All American Pipeline
This stock has been locked in a tight trading range, looks ready to break out, and pays a fat 7.60% dividend. Plains All American Pipeline, L.P. (NYSE: PAA), through its subsidiaries, transports, terminals, stores, and gathers crude oil and natural gas liquids (NGL) in the United States and Canada through pipelines.
The company operates in two segments:
- Crude Oil
- Natural Gas Liquids (NGL)
The Crude Oil segment offers:
- Gathering and transporting crude oil through pipelines
- Gathering systems,
- Trucks, barges, or railcars
- This segment provides terminalling, storage, and other facilities-related services and merchant activities
The Natural Gas Liquids segment provides:
- Gathering
- Fractionation
- Storage
- Transportation
- Terminalling activities
- This segment also involves ethane, propane, normal butane, iso-butane, natural gasoline, and crude oil refining processes.
Rio Tinto
This mining giant could be a massive winner as demand for all commodities continues to storm higher and pays a solid 7% dividend. Rio Tinto Group (NYSE: RIO) explores, mining, and processing mineral resources worldwide. The company offers:
- aluminum,
- copper,
- diamonds,
- gold,
- borates,
- titanium dioxide,
- salt,
- iron ore, and
- lithium.
It also owns and operates open pit and underground mines, mills, refineries, smelters, power stations, and research and service facilities.
In 2022, the company completed the sale of a royalty it holds on an area, including the Cortez mine operational area and the Fourmile development project in Nevada, to RG Royalties LLC, a direct wholly-owned subsidiary of Royal Gold Inc., for $525 million in cash. Rio Tinto obtained the royalty as partial consideration for selling its 40% interest in the Cortez Complex to Barrick in 2008.
TC Energy
While perhaps off-the-radar for many investors, this dual-threat energy company is a steal at current levels. TC Energy Corporation (NYSE: TRP) is an energy infrastructure company in North America. Its yield is a rich 7.18%.
It operates through five segments:
- Canadian Natural Gas Pipelines
- U.S. Natural Gas Pipelines
- Mexico’s Natural Gas Pipelines
- Liquids Pipelines
- Power and Energy Solutions
The company builds and operates a network of 93,600 kilometers of natural gas pipelines and transports natural gas from supply basins to local distribution companies, power generation plants, industrial facilities, interconnecting pipelines, LNG export terminals, and other businesses. It also has regulated natural gas storage facilities with a total working gas capacity of 532 billion cubic feet.
In addition, it has approximately 4,900 kilometers of liquids pipeline system that connects Alberta crude oil pipeline to refining markets in Illinois, Oklahoma, Texas, and the United States Gulf Coast.
Finally, the company owns or has interests in approximately 4,600 megawatts of power generation facilities and owns and operates approximately 118 billion cubic feet of non-regulated natural gas storage facilities in:
- Alberta
- Ontario
- Québec
- New Brunswick
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