24/7 Insights
- Dividend stocks are a key part of generating strong total returns.
- Typically, companies with strong balance sheets can raise their dividends.
- Access 2 legendary, high-yield dividend stocks Wall Street loves.
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.
A recent study from Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).
For younger investors or those on a tight budget, investing to generate consistent passive Income can be daunting because many top dividend stocks trade anywhere from $25 to over $100 per share. Realizing any significant return on investment can be challenging with a small investing capital base of $2000.
We screened our 24/7 Wall St. dividend income database, looking for solid, lower-priced stocks that pay dependable dividends that investors can purchase and start to generate positive total returns.
Why are we covering this?
Source: pixdeluxe / E+ via Getty Images
Investing at any age requires a starting point, and many individuals have limited funds to dedicate to the stock market at the beginning of their investment journey. If that is true, looking for stocks that have consistently paid dividends over the years but are lower priced than large-cap blue-chip companies makes sense.
AT&T
Source: jetcityimage / iStock Editorial via Getty Images
The legacy telecommunications company has been going through a lengthy restructuring, while lowering the dividend, which still checks in at 6.41%. AT&T Inc. (NYSE: T) provides worldwide telecommunications, media, and technology services.
Its Communications segment offers wireless voice and data communications services.
AT&T sells through its company-owned stores, agents, and third-party retail stores:
- Handsets
- Wireless data cards
- Wireless computing devices
- Carrying cases
- Hands-free devices
AT&T also provides:
- Data
- Voice
- Security
- Cloud solutions
- Outsourcing
- Managed and professional services
- Customer premises equipment for multinational corporations, small and midsized businesses, and governmental and wholesale customers
In addition, this segment offers broadband fiber and legacy telephony voice communication services to residential customers.
It markets its communications services and products under:
- AT&T
- Cricket
- AT&T PREPAID
- AT&T Fiber
The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.
Energy Transfer
Source: kyletperry / Getty Images
The top master limited partnership is a safe way for investors looking for energy exposure and income, as the company pays a massive 8.10% distribution. Energy Transfer L.P. (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins.
The company is a publicly traded limited partnership with core operations that include:
- Complementary natural gas midstream, intrastate, and interstate transportation and storage assets
- Crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets
- NGL fractionation
- Various acquisition and marketing assets
After purchasing Enable Partners in December 2021, Energy Transfer owns and operates more than 114,000 miles of pipelines and related assets in 41 states, covering all of the major U.S. producing regions and markets. This further solidifies its leadership position in the midstream sector.
Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG, as well as the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco L.P. (NYSE: SUN), and the public partner interests and 39.7 million standard units of USA Compression Partners L.P. (NYSE: USAC).
Hercules Capital
Source: 2d illustrations and photos / iStock via Getty Images
This highly regarded company across Wall Street pays a giant 10.06% dividend. Hercules Capital Inc. (NYSE: HTGC) is the largest non-bank lender to venture capital-backed companies at all stages of development in a broadly diversified variety of technology, life sciences, and sustainable and renewable technology industries.
With two decades of experience in venture debt, Hercules is uniquely positioned to quickly create innovative financing solutions that perfectly fit within a company’s existing capital structure and map to its business objectives.
Recognized as the industry leader, Hercules understands the flexibility these types of companies need and has the experience to work closely with them, even through challenging times, to help them reach critical milestones.
Since its inception in December 2003, Hercules has committed more than $18 billion to over 640 companies and is the lender of choice for entrepreneurs and venture capital firms seeking growth capital financing.
KeyCorp
Source: jetcityimage / iStock Editorial via Getty Images
This top regional player is very cheap at current levels for investors looking at financials, it and pays a big 5.27% dividend. KeyCorp (NYSE: KEY) operates as the holding company for KeyBank National Association, which provides various retail and commercial banking products and services in the United States.
It operates in two segments:
- Consumer Bank
- Commercial Bank
The company offers various deposits, investment products, and services to individuals and small and medium-sized businesses including:
- Commercial leasing
- Investment management
- Consumer finance
- Personal finance and financial wellness
- Student loan refinancing
- Mortgage and home equity lending
- Credit card
- Treasury
- Business advisory
- Wealth management
- Asset management
- Cash management
- Portfolio management
- Trust and related services
It also provides a suite of banking and capital market products, such as:
- Syndicated finance
- Debt and equity capital market products
- Commercial payments
- Equipment finance
- Commercial mortgage banking
- Derivatives
- Foreign exchange
- Financial advisory, and public finance
- Commercial mortgage loans to consumer, energy, health care, industrial, public sector, real estate, and technology sectors for middle market clients
In addition, the company offers community development financing, securities underwriting, brokerage, and investment banking services.
Petróleo Brasileiro S.A.
Source: FabioIm / iStock Editorial via Getty Images
This top energy company in Brazil known as Petrobras pays a gigantic 12.41% dividend. Petróleo Brasileiro S.A. (NYSE: PBR) explores, produces, and sells oil and gas in Brazil and internationally.
The company operates through these segments:
- Exploration and Production
- Refining
- Transportation and Marketing
- Gas and Power
It also prospects, drills, refines, processes, trades, and transports crude oil from producing onshore and offshore oil fields, shale or other rocks, and oil products, natural gas, and other liquid hydrocarbons.
The Exploration and Production segment explores, develops, and produces crude oil, natural gas liquids, and natural gas primarily for supplies to domestic refineries.
The Refining, Transportation, and Marketing segment engages in refining, logistics, transport, marketing, and trading crude oil and oil products, exporting ethanol, and extracting and processing shale. It also holds interests in petrochemical companies.
The Gas and Power segment is not just involved in the logistic and trading of natural gas and electricity, but also in the transportation and trading of LNG, generation of electricity through thermoelectric power plants, holding interests in transportation and distribution of natural gas, and fertilizer production and natural gas processing business, showcasing its comprehensive involvement in the energy sector.
In addition, the company produces biodiesel and its co-products and ethanol and distributes oil products.
Starwood Property Trust
Source: Iren_Key / Getty Images
This is a high-yielding company run by real estate legend Barry Sternlicht that offers big-time total return potential and a 9.22% dividend. Starwood Property Trust Inc. (NYSE: STWD) operates as a real estate investment trust (REIT) in the United States, Europe, and Australia.
It operates through four segments:
- Commercial and Residential Lending
- Infrastructure Lending
- Property
- Investing and Servicing segments
The Commercial and Residential Lending segment:
- Originates, acquires, finances, and manages commercial first mortgages
- Non-agency residential mortgages
- Subordinated mortgages
- Mezzanine loans
- Preferred Equity
- Commercial mortgage-backed securities (CMBS)
- Residential mortgage-backed securities
The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments.
The Property segment primarily develops and manages equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment.
The Investing and Servicing segment:
- Manages and works out problem assets
- Acquires and contains unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions
- Originates conduit loans to sell these loans into securitization transactions and acquire commercial real estate assets, including properties from CMBS trusts.
∴
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
