Dividend stocks are a favorite among investors for good reason. They provide a steady income stream of passive income and offer a promising avenue for total return. Total return, a comprehensive measure of investment performance, encompasses interest, capital gains, dividends, and distributions realized over time.
For example, if you buy a stock at $20 that pays a 3% dividend and goes up to $22 in a year, your total return is 13%. That is, 10% for the increase in stock price and 3% for the dividends paid.
While the December interest rate cut of 25 basis points may be the last for a while, it is an excellent bet that federal funds will be lower than today’s effective rate of 4.23%. In addition, the yield on the super-safe 10-year U.S. Treasury note sits at 4.57%. Investors looking for total return to balance the need for passive income and desire to add growth to combat inflation should focus on large-capitalization dividend giants. Large-cap stocks are defined as having a market cap of $10 billion or higher.
We screened our 24/7 Wall St. large-cap dividend stock universe for companies with dividends greater than the 10-year Treasury paper. While not backed by the full faith and credit of the U.S. government, large-cap giants do not have $36 trillion in debt on their balance sheets. Four top companies hit our screen, and all make sense for growth and income investors. All are rated Buy at the top Wall Street firms we follow.
Why do we cover large-cap dividend stocks?
Investing in large-cap dividend stocks provides regular income through dividends from established and financially stable companies. These stocks offer lower volatility and the potential for capital appreciation.
BP
This British multinational oil and gas company is headquartered in London.
This company is a premier European integrated oil giant that pays shareholders a hefty 6.09% divided. BP PLC (NYSE: BP) engages in the energy business worldwide.
It operates through:
- Gas & Low Carbon Energy
- Oil Production & Operations
- Customers & Products
- Rosneft segments
BP produces and trades natural gas, offers biofuels, operates onshore and offshore wind and solar power generating facilities, and provides de-carbonization solutions and services, such as hydrogen and carbon capture, usage, and storage.
The company is also involved in the convenience and mobility business, which manages the sale of fuels to wholesale and retail customers, convenience products, aviation fuels, and Castrol lubricants; refining, supply, and trading of oil products; and operation of electric vehicle charging facilities.
In addition, it produces and refines oil and gas and invests in upstream, downstream, and alternative energy companies, advanced mobility, bio and low-carbon products, carbon management, digital transformation, and power and storage areas.
Wolfe Research has an Outperform rating with a $37 target price objective.
LyondellBasell
A global leader in developing and supplying materials that enable packaging, health, and transportation solutions.
This blue-chip chemical giant offers a massive 6.90% dividend. LyondellBasell Industries N.V. (NYSE: LYB) operates as a chemical company in:
- The United States
- Germany
- Mexico
- Italy
- Poland
- France
- Japan
- China
- The Netherlands
The company operates in six segments:
- Olefins and Polyolefins-Americas
- Olefins and Polyolefins-Europe, Asia, International
- Intermediates and Derivatives
- Advanced Polymer Solutions
- Refining Technology
It produces and markets olefins and co-products, polyethylene and polypropylene, propylene oxide and derivatives, oxyfuels and related products, and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol.
In addition, the company produces and markets compounding and solutions, including:
- Polypropylene compounds
- Engineered plastics, masterbatches
- Engineered composites, colors, and powders
- Advanced polymers, including catalloy and polybutene-1
- Refines heavy, high-sulfur crude oil, other crude oils, and refined products, including gasoline and distillates
It also develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications.
Piper Sandler has an Overweight rating on the shares with a $112 price target.
Pfizer
Pfizer is an American multinational pharmaceutical and biotechnology corporation.
This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been beaten down over the last three years as many are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide and pays a hefty 6.52% dividend, which has risen yearly for the past 14 years.
The company offers medicines and vaccines in various therapeutic areas, including:
- Cardiovascular metabolic and women’s health under the Premarin family and Eliquis brands
- Biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi brands
- Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga, and Paxlovid brands
Pfizer also provides drugs and vaccines in various therapeutic areas, such as:
- Pneumococcal disease, meningococcal disease, tick-borne encephalitis
- COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba, and the Prevnar family brands
- Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis, and Cibinqo brands
Amyloidosis, hemophilia, and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX, and Genotropin brands - Trading not far from its lowest split-adjusted level in thirteen years, the stock is an incredible bargain at current levels and pays a massive dividend.
Cantor Fitzgerald has an Overweight rating with a $45 target price.
Verizon
Verizon is the world’s second-largest telecommunications company by revenue, and its mobile network is the largest wireless carrier in the United States.
This top telecommunications company offers tremendous value, trading at 9.5 times estimated 2025 earnings and paying investors a strong 6.98% dividend. Verizon Communications Inc. (NYSE: VZ) provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide.
It operates in two segments:
- Verizon Consumer Group
- Verizon Business Group
The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements.
Verizon also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:
- Smartphones
- Tablets
- Smartwatches and other wireless-enabled connected devices
The segment also offers wireline services in the Mid-Atlantic (including the District of Columbia) and northeastern United States through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network.
The Business segment provides wireless and wireline communications services and products, including:
- FWA broadband
- Data
- Video and conferencing
- Corporate networking
- Security and managed network
- Local and long-distance voice
Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.
Citigroup has a Buy rating with a $47 target price.
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