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Dividend stocks have been extremely rewarding for long-term investors. Data shows that roughly 55% of market returns from 1987 through 2023 came from reinvested dividends. JPMorgan expects that the annual growth rate of global dividends on a per-share basis can increase to 7.6% from 5.6% seen over the last two decades.
But which dividend stocks can investors with a limited budget count on for long-term income and safety? Let's see a case study for ideas.
A few days ago, someone asked income investors on r/Dividends – a Reddit discussion board with over 650,000 members – how much they were making from dividends per month. The question drew significant engagement, with many investors sharing their portfolios and income details.
An investor said he was making about $6,000 per month in dividends at the age of 60. He retired about two years ago.
"Started dividend focus at 57. Retired at 58. At around that time, I was in the $4k range. Now 60, earning $6k. I've always invested and had respect for dividends from my grandfather. My kid's (21) account is about $300 a month, but growth is the focus," he said.
In a separate comment on the social platform, the investor explained his stock-picking process:
"I've read many books and read most nights. Currently, I'm rereading The Income Factory and The Intelligent Investor. Other books are Dividends Don't Lie and several more. I invest mostly for dividend growth and yield, but I still buy pure growth. I am retired and my goal is to never sell shares to pay bills. I'm retired but am active in my portfolio. I read and research daily. I sell options and for two years have made above my budget. All dividends drip."
Let's look at some of the top dividend stocks in the investor's portfolio.
JPMorgan Equity Premium Income ETF
JPMorgan Equity Premium Income ETF (JEPI) was the biggest investor position, making $6,000 per month in dividends. JEPI makes money by investing in some of the most notable large-cap U.S. stocks and selling call options. JEPI is ideal for those looking for exposure to defensive stocks. JEPI usually underperforms during bull markets and protects investors against huge losses during bear markets since most of its portfolio consists of large, defensive equities like Trane Technologies PLC (NYSE:TT), Southern Co (NYSE:SO) and Progressive Corp (NYSE:PGR), among many others.
JPMorgan Chase & Co
JPMorgan Chase & Co (JPM) was the second biggest holding in the portfolio. The investor said the bank dividend stock was among his long-term holdings. Earlier this month, JPMorgan reported fourth-quarter results that beat Wall Street estimates. Earnings per share came in at $4.81, above the Street's estimate of $0.71. Revenue rose 13.4% year over year to $43.74 billion. JPMorgan has raised its dividend every year since 2009 and yields about 2%.
AbbVie
With about 50 years of consistent dividend growth, AbbVie (ABBV) is one of the most famous dividend stocks among Redditors. The investor said ABBV was among his long-term holdings. The stock yields about 3.8%.
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) was among the biggest holdings in the investor’s portfolio, collecting $6,000 a month in dividends. Here is what he said about the fund a few days back:
"I'm retired. I let JEPI and JEPQ drip, several hundred a month."
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) invests in Nasdaq companies and generates extra income by selling call options. JEPQ yields over 9%.
Schwab U.S. Dividend Equity ETF
The investor earning $6,000 a month in dividends shared on Reddit that he was adding to his position in the Schwab U.S. Dividend Equity ETF (SCHD) despite the fund’s downturn.
Schwab U.S. Dividend Equity ETF (SCHD) tracks the Dow Jones U.S. Dividend 100 Index and exposes you to some of the top dividend stocks trading in the U.S., including Home Depot, Coca-Cola, Verizon, Lockheed Martin, Pepsi and AbbVie.
Broadcom
With a dividend yield of roughly 1.1%, Broadcom (AVGO) was among the low-yield dividend stocks in the portfolio. Oppenheimer recently said Broadcom was among its top semiconductor picks for 2025.
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