Investors looking to earn a steady income often maintain dividend stocks in their portfolios. These stocks are shares of a publicly traded company that regularly shares its profits with investors via dividends. Those considering this investment option must check the dividend yield of available options. It is also important to verify that the company paying the dividend is profitable. To avoid unwanted surprises, investors can choose from the top reliable dividend stocks in the market.
1. Comcast Corp (CMCSA)
With a market cap of $87.05 billion and a year-to-date performance of -4.78%, Comcast Corp is among the top five dividend stocks one can buy today. This technology company is a communication giant, with Universal Pictures, Peacock Video Streaming Service, and NBC Universal being among its most well-known subsidiaries. The company is also among the country’s most popular cable and broadband providers, with over 32 million broadband subscribers.
It has a price-to-earnings (P/E) ratio of 7.27, which is considered good, given that the average P/E is anywhere between 20–25. This ratio is a quick way to check if a stock is undervalued or overvalued. So, the lower the P/E ratio, the better the outcome for the business and investors.
For longer than a decade, Comcast has had a steady dividend yield. This is not surprising considering the company’s growth. For instance, it recently became the number-one studio due to its box office sales. Even Peacock’s paid subscriber base recently jumped by nearly 50%, reaching 31 million.
Key considerations
It is important to assess the pros and cons of high-yield dividend stock. With Comcast Corp, the consistent growth of its subsidiaries, the diversified business models (reducing the risk of legacy media business decline), and steady cash flow and revenue are key benefits. That said, drawbacks like company debt of $90 billion should also be considered while making an investment decision.
2. Marathon Petroleum Corp (MPC)
A market cap of $54 billion and a year-to-date performance of 9.6% make Marathon Petroleum Corp another option worth shortlisting. Investors can also make a note of its P/E, which is currently at 12.85. MPC is a petroleum refiner operating in the West Coast, Midwest, and Gulf Coast regions. Refiners like MPC typically make money from the difference in the pricing between refined petroleum and crude oil products. Besides, MPC has formed MPLX, which is a company that manages the processing, gathering, and transportation of fuel, energy infrastructure, and other logistics assets. Recently, MPC managed to earn an adjusted net income of $9.7 billion and returned $12.8 billion in capital to its shareholders through buybacks and dividends.
Key considerations
If planning to invest in MPC’s dividend stocks, one must consider the volatility of gas and oil prices, the rise of electric vehicles, and the increase in carbon reduction initiatives. All of these factors threaten the survival and growth of companies like MPC. That said, MPC’s investment in renewable diesel facilities and the high gas prices in Europe that benefit the country’s refiners work in the company’s favor.
3. VICI Properties (VICI)
With a market cap of $34.6 billion and a P/E of 12.13, VICI Properties is a real estate investment trust that boasts steady revenue thanks to its growing resort operations and gaming property portfolio. The company owns many experiential properties, golf courses, and gaming destinations across the country. Its revenue growth rate of 38.9% also works in its favor. Additionally, the company recently announced $1.8 billion in acquisitions.
Key considerations
The real estate company offers a 5.7% dividend yield and promised venture growth, which is something investors would appreciate when choosing stocks. That said, the company is vulnerable to risks like changes in consumer spending patterns, especially in times of economic downturn.
4. Bristol-Myers Squibb Co. (BMY)
Boasting a market cap of nearly $103 billion and a year-to-date performance of 0.12%, BMY is another dividend stock worth considering. It is a biopharmaceutical company with global sales of $12.2 billion. Additionally, the company recently listed ten new products, which yielded $3.5 billion for the year. Another recent development here is the increase of 5.3% in the company’s dividend payout.
Key considerations
While the company has a good P/E ratio of 7.27 and a dividend yield of 4.8%, the company has recently experienced slow revenue growth. This could affect its dividend in the future.
5. Diamondback Energy (FANG)
This is a gas and oil production and exploration company that predominantly targets the Permian Basin in New Mexico and West Texas. It is also involved in unconventional gas and oil reserves found onshore. Diamondback recently announced a merger valued at $26 billion with Endeavor Energy Resources. The now-merged company is expected to be one of the most lucrative Permian Basin investment options. Once the deal is locked, Diamondback will access approximately 838,000 net acres of property and about $550 million in cost synergies. With the announcement came the company’s declaration of a 7% increase in the base dividend, which is a clear sign of its solid financial standing.
Key considerations
Diamondback is among the few low-cost gas and oil manufacturers in the country and has a stable position in the market. The company also comes with a market cap of $50 billion and a year-to-date performance of 9%. These factors can assure investors of regular dividend payments. However, the risks associated with mergers and the possibility of the company’s production outgrowing its transportation infrastructure are a couple of drawbacks to consider.