Insider Monkey

Top 20 High Dividend Stocks To Buy According To Analysts

Vardah Gill
20 min read

In This Article:

In this article, we discuss top 20 high dividend stocks to buy according to analysts. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read Top 5 High Dividend Stocks To Buy According To Analysts. 

Dividend stocks have been on investors’ radars for quite some time now because of their ability to generate stable and regular income, lower risk, and tax advantages. Companies in the US also registered investors’ inclination toward dividend equities and steadily boosted their payouts over the years. According to a report by McKinsey & Company, US companies returned 78% of their net income on average in dividends and share repurchases between 1995 and 2021, up from 60% on average between 1965 to 2008. This has boosted investors’ confidence, who are increasingly loading up on dividend stocks, especially during periods of market downturns.

High inflationary periods have previously been beneficial for dividend equities because they have the potential to offer higher yields. This is more appealing for investors seeking income that can keep up with inflation. In our article titled 25 Things Every Dividend Investor Should Know, we reported that dividends accounted for 54% of the market’s returns during decades of high inflation. The report also mentioned that during the 1940s, 1960s, and 1970s, dividends represented 67%, 44%, and 73% of the market’s returns, respectively. During these decades, inflation averaged above 5% with total returns averaging below 10%.

When investing in dividend stocks, investors also pay attention to dividend yields as they indicate the amount of income an investor can expect to receive from a dividend-paying stock concerning its price. High dividend-yielding stocks are often considered risky investments because they signal financial distress or underlying problems within a company. However, overall financial health and a solid balance sheet of the respective company can mitigate the risks associated with high yields. Altria Group, Inc. (NYSE:MO), Verizon Communications Inc. (NYSE:VZ), and British American Tobacco p.l.c. (NYSE:BTI) have above-average dividend yields but also have strong dividend histories. For safe investment purposes, investors should focus on dividend growth streaks along with dividend yields.

The S&P High Yield Dividend Aristocrats, which tracks the performance of companies with over 20 years of consistent dividend growth and has an average dividend yield of 3.5%, delivered a total return of 590.3% from December 1999 to June 2019, compared with a 215.2% return of the S&P Composite 1500, Insider Monkey reported.

and

Recommended Stories