Dividend stocks offer income-seeking investors a quarterly, payable yield that can be reinvested in the company or used to purchase other stock. The S&P 500 is filled with promising companies that offer strong dividends, with the potential for future growth and solid financials.
Dividends that are too high can result in a company paying out dividends with money that would be better reinvested in their operations and growth.
The following dividend stocks are all sustainable, given current market conditions and financials.
1. Verizon (NYSE:VZ) at 5%
Verizon Communications is a powerhouse, and with the company’s stock down nearly 10% in the past 30-day period, it’s prime time to purchase Verizon stock on the cheap. The company’s recent struggles stem from competition from T-Mobile (TMUS), which has lured away consumers. The Verizon purchase of Yahoo, despite the big discount, is being felt.
But Verizon still boasts 108 million postpaid customers, and the vast number of subscribers won’t vanish overnight. Verizon has time to turnaround their operations to better compete with T-Mobile (TMUS) through discounts and promotions.
The company has a solid dividend payout history even if the stock isn’t expected to rebound in the short-term.
The company has a solid wireless business, with enough subscribers to help Verizon work on a content and ad business as well as moving into the future with 5G networks.
2. AT&T (NYSE:T) at 5%
AT&T is another strong entity with a share price of around $38.25 a share and a cash dividend of $0.49 that was paid on May 1. The company’s dividend payout has been strong since 2013, rising from $0.45 a share and increasing every 3 – 4 quarters. The company’s current payout of $0.49 a share just passed its second payout. This means that investors can expect the payout to increase in the next quarter or two.
The company is also going through a transition phase like Verizon, with a loss of 191,000 postpaid subscribers in the first quarter of the year among increased competition.
The loss in subscribers is far below Verizon’s loss of 289,000. The loss is attributed primarily to T-Mobile, which gained 789,000 subscribers on the quarter.
The company’s 130+ year history shows the company’s resilience in times of pressure. Despite losses during the first quarter, the company expects to meet their full-year profit forecasts. The company’s stock is down nearly 8.5% in the past 90-day period, making it an affordable stock to buy.
AT&T wants to become a content owner rather than a distributor and is pursuing a mega-deal to acquire Time Warner to acquire their content, including TNT, HBO and Warner Bros. The company’s purchase of DirecTV has helped pad against losses with DirecTV Now offsetting losses in traditional pay-TV subscriber numbers. One of the better long term dividend stocks to consider.
3. Iron Mountain (NYSE:IRM) at 6.3%
Iron Mountain Inc. is an REIT, and they just declared their second-quarter cash dividend for the year of $0.55. The payout date will be July 3, 2017. It is available to all shareholders that own shares by the close of business on June 15, 2017.
The company’s portfolio includes 1,400 facilities across 47 countries, with more than 85 million square feet of space.
The company, founded in 1951, offers storage and information management to over 230,000 organizations. A strong choice for an REIT, Verizon’s impressive 6%+ dividend has a lot of room for growth with low costs.
The company’s storage facilities are all low-maintenance. Iron Mountain’s three-year lease terms provide far more stable income figures than a traditional month-to-month storage agreement. The company’s average storage time per item is 15 years, and its storage units have a 75% gross profit margin.
Customer retention is 98%, allowing for long-term, stable financials at Iron Mountain.
The company plans to invest $100 million annually on just acquisitions. This is aimed at increasing their exposure in emerging markets from 19% to 25% by 2020. The move will help accelerate the company’s growth and provide a steady financial base, too.
A long history and brand exposure makes Iron Mountain one of the world’s most trusted entities in the data-management, safe records storage industry. Expectations are that the dividend will surpass $2.50 a share on an annual basis in 2020. At a such a rate it makes it a smart choice for an income-generating investment portfolio.
Other Dividend Stocks to Consider
Retailer stocks, such as Macy’s and Kohl’s also make the Dividend Stocks list. However, the falling retail market makes them a risk choice for an income-investor. Ford Motor Company also offers a 5.2% yield, but the company’s forecast points to the industry slowing through 2017. Overall, it is essential to have strong dividend stocks in your investment portfolio. A successful portfolio is diverse and ‘market-proof’. This means that the portfolio is not dependent on any particular market. It also means that not all the eggs in one basket. Having some strong dividend stocks in your investment portfolio can provide a good, long term income. Anything that yields 5% in a sustainable fashion should be considered.