American Electric Power Co. (NYSE: AEP) is not the largest utility in America, but with a $41 billion market cap and serving millions of Americans in multiple middle-American states, it is quite well-known. AEP dates back to 1906, and the company deserves much public credit for having historically been quite vocal about the importance of dividends for investors, with over a 100-year track record of dividends as a public company. AEP also uses every available source of power in its portfolio, new and old forms alike. Its dividend yield is currently about 3.3%, and the company aims to keep increasing its payout over time.
AT&T Inc. (NYSE: T) may have been a coin-toss with Verizon when it came to historical investing picks for retirees, but AT&T has a substantially higher dividend yield of over 6.5% due to its shares having pulled back so much. The company still has a $235 billion market cap and millions of landline and cellular subscribers, and it owns Time Warner and DirecTV. Its investors haven’t really enjoyed great returns for a while, but they love that juicy dividend. For a rival comparison, Verizon’s yield is closer to 4%, because its shares have risen over the past two years while AT&T shares are down, with some investors having been concerned over its high debt, which has since been less discussed.
Boeing Co. (NYSE: BA) has run into some recent issues for investors with its 737 MAX groundings after two deadly airline crashes, and recent trends on deliveries will affect 2019 numbers. Boeing will recover, though its shares have pulled back about 15% from its peak. The stock is still the single most important in the Dow Jones industrial average by far, due to the index being price-weighted. It also celebrated its 100th anniversary in 2016. With a backlog nearing 6,000 planes and with that backlog nearing $500 billion at list prices, Boeing has managed to mitigate some of the boom-bust cycles of prior decades.
Boeing is also a winner in defense, satellite and space-related spending trends, and it was approaching the $100 billion annual revenue mark before the recent mishap interrupted that trend. Now investors are having to look out longer term than before, but with a $212 billion market cap it has a dividend yield of about 2.2% That dividend yield actually would have been far higher had its shares not more than tripled in the past three or four years.
Carnival Corp. (NYSE: CCL) is the largest cruise line of them all, with a market value of nearly $37 billion. It also has the largest dividend of its peers at 3.7%. It’s no secret that retirees who like to travel love their cruises. Beyond its Carnival brand, the company also owns and operates brands up the cost-scale via lines such as Princess, Holland America, Cunard, Costa, P&O and more. Carnival has been public since the mid-1980s and was founded in 1972, but the Holland America and Cunard brands go back into 1800s. Carnival’s recent guidance had been an issue, but the outlook seems to have stabilized.
Darden Restaurants Inc. (NYSE: DRI) has been around as a leading chain restaurant operator for decades now. It has close to 1,750 locations under its Olive Garden, LongHorn Steakhouse, Cheddar’s, Yard House, Capital Grille, Bahama Breeze, Seasons 52 and Eddie V’s brands. It used to own Red Lobster as well, before selling that for over $2 billion in 2014. Investors here get paid a 2.5% dividend yield, with a market cap of $14.5 billion.
Johnson & Johnson (NYSE: JNJ) products have been used by probably every person in America at one point or another in their lives. The company dates back to the 1880s. It has endless numbers of consumer products, as well as medical devices, and its Janssen unit is its pharmaceutical operation. Raising its dividend in 2018 marked the 56th consecutive year of such hikes. That dividend now comes with a 2.6% yield, and the company has a $370 billion market cap. Proving its resilience, the stock even recovered handily from its asbestos-talc suits in recent months after its most recent earnings report.
LTC Properties Inc. (NYSE: LTC) is a self-administered real estate investment trust (REIT) that has retirees as its focus. It has been public since the early 1990s and invests in seniors housing and health care properties, with approximately 200 investments spread among more than half of the states in America. These are in assisted living communities, skilled nursing centers and behavioral health care, independent living and memory care communities. As a REIT, it also pays out almost all of its income, and it is currently offering a 4.9% dividend yield.
Merck & Co. Inc. (NYSE: MRK) is one of the two Big Pharma names in the Dow, and it handily outperformed the markets in 2018, now that much of the patent cliff (drug patents expiring) has slowed and with new drug sales coming from multiple cancer targets from Keytruda. Merck collaborates with many otherwise competing pharmaceutical and biotech players. Merck has continued to raise its dividend and is a buyer of its own stock. With close to a $200 billion market cap on last look, Merck has a dividend yield of about 2.9% with a $191 billion market cap. Merck shares had a strong gain in 2018, despite recent profit-taking, while health care stocks gave some gains back.