\\”Forever\\” Dividend Stocks To Buy and Hold for a Carefree Retirement

We often hear that Millennials are terrible investors because most Millennials entered the workforce during the 2008 financial crisis. Afterward, many hesitated to invest after seeing their families lose money, and those who often invested very conservatively. Many have avoided stocks, even the more conservative high dividend stocks.

Which begs the question – have Millennials changed their investment strategies? Let's take a look.

With 20/20 hindsight, most people would agree that not investing during the turbulent 2008 financial crisis was a regret. Shortly after, we saw one of the greatest economic growth to the economy, and those who invested made some of the greatest returns.

At this time, Millennials are facing their second economic recession. Being recession veterans, they're betting on a strong economic recovery.

What Are Dividends

If you're not familiar with dividends, here is a short recap.

Dividends are a portion of the company's earnings that are distributed to shareholders. In addition to the value of a company's stock going up, dividends are an additional payment sent to shareholders simply for owning the company.

Dividend payments are sent typically monthly, quarterly, or on an annual timeline, and are determined by the company's board of directors.

The types of companies that usually offer dividends are traditionally more established companies.

Dividend Investing Is a Growing Trend

Dividend Investing is a growing trend investment strategy involving owning primarily stocks that offer dividends. The idea is that by owning enough stocks that offer dividends, those dividend payments can eventually entirely replace your income for retirement.

Retirees may save up a large retirement nest egg, but they will eventually need to sell those stocks for money in retirement. Often using the rule of 4% to get the longest life out of their nest egg. All while hoping their nest egg doesn't run out.

The benefit of dividend investing is that there is no need to sell their stocks by retiring on the dividend income. The dividend payments from your stocks can cover all your expenses. This helps ensure you have a consistent income stream in retirement and the ability to leave a sizeable inheritance for your heirs.

Take into consideration Warren Buffett, arguably one of the greatest investors who ever lived. He has a $200 billion portfolio through Berkshire Hathaway, consisting of 47 stocks. Two-thirds of those stocks have one thing in common – they provide dividends.

What Is the Average Dividend Yield

We established dividends are a portion of the company's earnings distributed to shareholders, but how much do shareholders get?

Each company sets its own divided as a fixed dollar amount per share owned. However, the industry typically gauges dividend amounts as a dividend yield. This is the dividend compared to the current value of the stock. So while the dividend amount is typically pretty consistent in dollar value, the dividend yield changes daily as the stock price changes.

The S&P 500 gauges 500 popular American companies. The average dividend yield of the S&P 500 is 2.00%. So, for every $100 you invest in the S&P 500, you will earn $2 annually in dividend payments.

What Are High Dividend Stocks?

High Dividend Stocks are typically stocks that offer a dividend yield greater than the average 2.00%.

Typically high dividend stocks come from companies with strong cash flow such as:

High Dividend Stocks do have risks. Companies have been known to offer high dividends to attract investors. However, they may have trouble maintaining their high dividend yield in the long term, and their stock price may suffer. You should always be careful about these and do your research.

Popular High Dividend Stocks

Here are some popular high dividend stocks that have strong brand recognition and high dividend yields.

Bank High Dividend Stocks

Citigroup (C) – Dividend Yield 4.74%

Citigroup is one of the big four banks in the United States and JPMorgan Chase, Bank of America, and Wells Fargo. They offer financial services such as consumer banking and credit, corporate and investment banking, and wealth management. Citigroup is referred to as too big to fail with a market cap of 90.7 billion. When a company is too big to fail, that's a nice assurance that it'll continue to keep up its dividend.

Jpmorgan Chase (Jpm) – Dividend Yield 3.55%

JPMorgan Chase is considered the largest bank in the United States and the seventh-largest in the world by total assets. These amount to around $3.2 trillion. The JPMorgan brand is used for banking services, while the Chase brand is used for credit card services.

JPMorgan continues to have a healthy balance sheet and shows it'll be able to maintain its high dividend stock even during a turbulent year.

Energy Company High Dividend Stocks

Exxonmobil (Xom) – Dividend Yield 10.19%

ExxonMobil is the third-largest publicly traded oil and gas company behind Chevron and Saudi Aramco. While oil prices have lately decreased and this year has not been kind to any stocks. ExxonMobil continues to maintain a high dividend stock for investors. Plus, there's a comfort in knowing the world will always need electricity.

Chevron (Cvx) – Dividend Yield 7.07%

Chevron is another oil & gas company and recently overtook ExxonMobil for the world's 2nd largest energy company. CVX has been a bit more conservative in its acquisitions and spending. Those choices have created a strong balance sheet for the company to maintain a great high dividend stock.

Edison (Eix) – Dividend Yield 4.53%

Edison is a utility company that generates, transmits, and distributes electricity in the United States, primarily in California. Utility companies like Edison have a fairly stable income stream as there is usually little competition, which helps them maintain high dividend yields.

Dcp Midstream (Dcp) – Dividend Yield 12.05%

DCP Midstream is also in the oil & gas industry, focusing primarily on transportation. They have 51,000 miles of natural gas pipelines and 44 natural gas processing plants in the united states, making it one of the larger midstream companies.

As they make a good portion of money transporting oil & gas, their revenue depends heavily on the oil price. Right now, oil is priced low, but as that changes, this high dividend stock has a potential upswing for growth.

Real Estate High Dividend Stocks

Realty Income Corporation (O)- Dividend Yield 4.64%

Realty Income is known as the monthly dividend company. Popular among dividend investors as they pay dividends every month. They are a real estate investment trust (REIT) that owns 6,541 properties in the United States, Puerto Rico, and the United Kingdom. They earn money through long-term leases on their properties, which uniquely positions them to weather most short-term economic swings.

Plus, their major tenants are Walgreens, 7-Eleven, Dollar General, FedEx, and Dollar Tree. These companies aren’t easily going to get replaced by online eCommerce. If their stable cash flow wasn't enticing enough, their high monthly dividend of 4.64% is pretty great.

Universal Health Realty Trust (Uht) – Divined Yield 5.01%

Universal Health Realty Trust is another REIT but focuses on hospitals, rehabilitation hospitals, free-standing emergency departments, sub-acute facilities, medical office buildings, and child care facilities. UHT earns money through long-term leases to these healthcare facilities located primarily in Arizona, Nevada, and Texas.

This stock has taken a beating during this year. Healthcare facilities have had to put off higher-paying services as they adapt their facilities for COVID. Even with the recent stock price fall, it still offers an attractive dividend with growth as the economy improves.

Simon Property Group (Spg) – Dividend Yield 8.02%

Simon Property Group is another interesting REIT on this list. They are the second-largest real estate investment trust in the United States with a significant portfolio in malls, outlets, and large complexes with big-box retailers.

However, the rise of eCommerce has been brutal to Simon Property Group. Plus, this year has not been kind to in-person retail. Simon has many assets but needs a significant plan to navigate a future post-COVID and continue to compete with Amazon.

Iron Mountain (Irm) – Dividend Yield 8.99%

Another high-dividend stock on our list. Iron Mountain stores information. They store physical records as well as digital records for companies around the world. This includes 220,000 customers throughout North America, Europe, Latin America, Africa, and Asia.

With over 1,500 storage locations, including underground caves for added security, Iron Mountain is a great solution for companies needing secure offsite storage. Also, they've seen significant growth in digital storage. Their recurring revenue through storage services helps maintain their high dividend stock.

Telecommunication High Dividend Stocks

Verizon (vz) – Dividend Yield 4.3%

Verizon is a well-known brand as they offer wireless telephone services to around 93 million people across the United States. Making it one of the largest phone services in the country. They primarily focus on wireless connectively, making about 70% of their revenue.

Also, Verizon Media Group earns revenue from its acquisitions of AOL and Yahoo. Verizon has a strong recurring revenue subscriber base making it a great high dividend stock.

AT&T (T) – Dividend Yield 7.61%

AT&T has been a staple in telecommunications for ages. Their wireless telephone services make about 40% of their revenue, but they're a bit more diverse. They also have DirectTV, and Warner Media (HBO, Warner Brothers, Turner cable networks, etc.).

This diversity has helped AT&T stay relevant, but companies like Netflix, Amazon Prime, and Disney + continue to bite off their network tv revenue.

Centurylink (Lumn) – Dividend Yield 10.14%

CenturyLink is now Lumen Technologies. A name change occurred in September 2020. Lumen is one of the United States' largest telecommunication companies offering internet services to businesses (75% of revenue) and individual consumers.

With 450,000 miles of fiber connecting people to the internet, Lumen has the infrastructure smaller companies can't compete with. This helps maintain its market share and high-dividend payouts.

Cisco (Csco) – Dividend Yield 3.59%

Cisco is not well known by individual consumers. Yet CSCO is one of the world's largest hardware and software suppliers for networking solutions for businesses. They help companies build their own networks with routers, switches, video conferencing software, data centers, security, and more.

What's great is that they sell the physical hardware companies need and the software as a subscription for recurring revenue to support that great high dividend stock.

Technology High Dividend Stocks

IBM (IBM) – Dividend Yield 5.18%

IBM is a hardware and software technology company that focuses on cloud computing, artificial intelligence, commerce, data & analytics, IT Infrastructure, security, and a wide range of digital products. They have been paying a dividend since 1916 and is considered a solid dividend payer.

They've recently made acquisitions of companies like Red Hat to reduce their dividend growth for a bit. These acquisitions will still pay off in billions in the long-term and help maintain IBM's significantly high dividend stock.

Aerospace & Defense High Dividend Stocks

General Dynamics (GD) – Dividend Yield 3.08%

General Dynamics is the 5th largest US defense contractor and business jet manufacturer of Gulfstreams. Being defense contractors, they receive military contracts that are less susceptible to market swings. They currently have $82.7 billion in backlog, including two US Navy submarines, Abrams tanks, and more.

As United States Defense spending continues to rise, General Dynamics will continue to benefit as a reputable company in the defense field. For investors, this could be a great high dividend stock to hold on to for the long term.

Insurance High Dividend Stocks

Metlife (Met) – Dividend Yield 4.68%

MetLife is the largest life insurer in the United States and one of the world's largest as they operate in 40 countries. They make money from premiums, investing income before insurance payouts, and retirement solutions such as annuities.

COVID will certainly have an impact on the insurance business. MetLife is better positioned than other life insurance agencies to weather the storm and maintain its high-dividend stock.

Disclosure: I personally hold O, IRM, VZ, DCP, and CSCO. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it. Nor do I have any business relationship with any company whose stock is mentioned in this article. 

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Marjolein is the founder of Radical FIRE. She has a finance and economics background with a master’s in Finance. Radical FIRE is a personal finance blog that helps you live your dream life through making more money and investing. We want you to reach your financial goals and have fun while doing it!