24/7 Wall St. Insights
- High-yield dividend stocks will be in big demand as interest rates come down.
- There is a good chance that rates will drop 2% or more from current levels by 2026.
- Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “7 Things I Demand in a Dividend Stock,” plus get our two best dividend stocks to own today. Access 2 legendary, high-yield dividend stocks Wall Street loves.
Investors love dividend stocks, especially the high-yield variety, because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.
Let’s take a closer look at the concept of total return. Imagine you purchase a stock at $20 that offers a 3% dividend. If the stock price rises to $22 within a year, your total return is 13%. This is calculated by adding the 10% increase in stock price to the 3% dividend.
Many of the top dividend stocks that we cover have moved higher in price over the last six months as investors anticipating the rate cut cycle, combined with the bond market doing the same and pushing Treasury yields lower, have consistently bought the best stocks like Altria Inc. (NYSE: MO | MO Price Prediction). When dividend stocks move higher in price, the yield on the stocks goes down.
We screened our 24/7 Wall St. high-yield dividend stock database and found two companies that everybody knows, that have been around forever that pay shareholders big dividends, and seemingly have been totally forgotten. Both look like steals at current trading levels.
Why do we cover dividend stocks?
Dividend stocks provide investors with reliable streams of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
Xerox
Xerox sells print and digital document products and services in more than 160 countries.
This company is not just making copies and delivers a sweet 9.27% dividend. Xerox Holdings Corp/ (NASDAQ: XRX), together with its subsidiaries, operates as a workplace technology company that integrates hardware, services, and software for enterprises in the Americas, Europe, the Middle East, Africa, India, and elsewhere.
The company operates through two segments,
- Print and Other
- FITTLE
The Print and Other segment designs, develops, and sells document systems, solutions, and services, as well as IT and software products and services.
The FITTLE segment offers financing solutions for direct channel customer purchases; and lease financing to end-users.
It also offers:
Workplace solutions comprising:
- Desktop monochrome, color, and multifunction printers, and ConnectKey software
- Digital printing presses and light production devices; and digital services that support workflow automation, personalization and communication software, content management solutions, and digitization services
In addition, the company provides:
- Graphic communications
- In-plant and production solutions
- FreeFlow, a software solution for the automation and integration of processing of print job comprising file preparation
- Final production and electronic publishing; and IT services
- End-user computing devices, network infrastructure, and communications technology
- Technology product support, professional engineering, and commercial robotic process automation
Further, it sells paper products and standalone software, such as CareAR, DocuShare, and XMPie, and it invests in startups.
Western Union
Western Union is an American multinational financial services corporation.
While the demand for telegrams is long gone, the demand to transfer money is not, and this famous company has grown as a result. It pays a strong 7.97% dividend. The Western Union Co. (NYSE: WU) provides worldwide money movement and payment services.
The company operates in two segments:
- Consumer-to-Consumer
- Business Solutions
The Consumer-to-Consumer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations and through websites and mobile devices.
The Business Solutions segment provides payment and foreign exchange solutions, primarily cross-border and cross-currency transactions for small and medium-size enterprises, other organizations, individuals, and foreign currency forward and option contracts.
It also offers bill payment services that facilitate payments from consumers to businesses and other organizations, as well as offers money orders and other services.
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