Companies that pay a part of their earnings to stockholders are known as dividend stocks. The payment is a dividend and is a return of cash to shareholders. Most dividend stocks come from well-established companies with stable revenue and earnings.
In turn, this consistency allows the company to pay a dividend. However, even a long history of paying a dividend is not enough to guarantee future payments. For example, AT&T (T) announced a dividend cut due to a change in business strategy. Hence, it is essential to look at not only the dividend yield but also the dividend safety.
Verizon (VZ) is number one on this list for two reasons: an excellent dividend yield combined with good dividend safety. First, most investors know about Verizon. The company is a cell phone giant with one of the largest US networks.
In our opinion, no list of dividend stocks is complete without Microsoft (MSFT). Almost every investor knows about Microsoft. The company’s signature products and services include Windows, MS Office, Xbox, LinkedIn, Bing, Outlook, Azure, and more.