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 (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

Many investors looking for passive income flows also want to own the largest companies. Due to their sheer size, large-cap and mega-cap stocks typically offer safety. Mega-cap companies have a market value above $200 billion, while large-cap companies have a market value between $10 billion and $200 billion.

We screened our 24/7 Wall Street dividend stock universe, looking for the companies with the biggest market capitalizations that also pay at least a 5% dividend. While we couldn’t find any mega-cap companies that did (Exxon Mobil Corporation (NYSE: XOM) is a mega-cap company with a massive $456 billion market cap but only pays a 3.34% dividend), we found numerous companies with market caps well above $100-$150 billion that do pay shareholders hefty 5% and higher yields.

AT&T

The legacy telecommunications company has been going through a lengthy restructuring while lowering the dividend, which still stands at 6.45%. AT&T, Inc. (NYSE: T) provides worldwide telecommunications, media, and technology services.

Its Communications segment offers wireless voice and data communications services.

AT&T  sells through its company-owned stores, agents, and third-party retail stores:

• Handsets
• Wireless data cards
• Wireless computing devices
• Carrying cases
• Hands-free devices 

AT&T also provides:

• Data
• Voice
• Security
• Cloud solutions
• Outsourcing
• Managed and professional services
• Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers. 

In addition, this segment offers residential customers broadband fiber and legacy telephony voice communication services.

It markets its communications services and products under :

• AT&T
• Cricket
• AT&T PREPAID
• AT&T Fiber 

The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.

BHP Group

This mining giant is poised for a giant in 2024 as commodities prices explode higher and pays a rich 5.38% dividend. BHP Group Limited (NYSE: BHP) operates as a resources company in Australia, Europe, China, Japan, India, South Korea, the rest of Asia, North America, South America, and internationally.

The company operates through three segments:

• Copper
• Iron Ore
• Coal

BHP Group mines:

• Copper
• Silver
• Zinc
• Molybdenum
• Uranium,
• Gold
• Iron ore
• Metallurgical and energy coal

It is also involved in mining, smelting, and refining nickel and potash development activities.

In addition, it provides towing, freight, marketing and trading, marketing support, finance, administrative, and other services.

Pfizer

This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been crushed as many are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide and pays a hefty 6.17% dividend, which has risen yearly for the last 14 years.

The company offers medicines and vaccines in various therapeutic areas, including:

• Cardiovascular metabolic and women’s health under the Premarin family and Eliquis brands
• Biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi brands
• Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga, and Paxlovid brands.

Pfizer also provides medicines and vaccines in various therapeutic areas, such as:

• Pneumococcal disease, meningococcal disease, tick-borne encephalitis
• COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba, and the Prevnar family brands
• Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis, and Cibinqo brands
• Amyloidosis, hemophilia, and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX, and Genotropin brands

Philip Morris International

This company has continued to grow its global market share and pays a fat 5.61% divided. Philip Morris International Inc. (NYSE: PM) is one of the largest international cigarette producers, with a share of 28% of the global cigarette/heated tobacco market.

Key combustible brands include:

• Marlboro
• Parliament
• L&M

The company is commercializing IQOS, a heat-not-burn product, in over 40 markets, which could drive earnings in the future. Most on Wall Street believe Philip Morris International offers superior underlying growth prospects, both near-term and long-term.

The share price has been weak lately as investors have questioned the growth potential of its reduced-risk products. All sales are outside the United States.

Toronto-Dominion Bank

This company is one of the top banks in Canada and pays a stellar 5.04% dividend. The Toronto-Dominion Bank (NYSE: TD) operates through these segments:

• Canadian Personal and Commercial Banking
• U.S. Retail Wealth Management and Insurance
• Wholesale Banking.

The company offers personal deposits, such as:

• Checking, savings, and investment products
• Financing
• Investment
• Cash management
• International trade
• day-to-day banking services to businesses
• Financing options to customers at the point of sale for automotive and recreational vehicle purchases

It also provides credit cards and payments, real estate secured lending, auto finance, consumer lending services, point-of-sale payment solutions for large and small businesses, and wealth and asset management products. Advice to retail and institutional clients through direct investing, advice-based, asset management businesses, property and casualty insurance, and life and health insurance products.

Toronto-Dominion Bank also offers capital markets, corporate, and investment banking products and services, including underwriting and distributing new debt and equity issues; advice on strategic acquisitions and divestitures; and trading, funding, and investment services to corporations, governments, and institutions.

 

 

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