When I receive dividends in my bank account, they always make me smile. There is nothing sweeter than enjoying the fruits of your investment labor. But selecting a large dividend stock requires careful consideration in light of the effects of the pandemic. The company must remain resilient in the face of economic challenges, while being able to withstand possible disruptions in the business landscape resulting from changes in human behavior or practices.
A few other criteria I have are that the company should have a great track record of paying dividends in good times as well as in bad times, and that those dividends should also increase over time. It is generally a good bet to select stocks which have a strong market position within their respective industries and which have clear catalysts that drive growth.
With all of these attributes presented, here are three dividend paying stocks that I would like to buy today.
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Nike
As one of the world’s most reputable athletic footwear and apparel companies, Nike (NYSE: NKE) has demonstrated its ability to remain agile and innovative even in the face of obstacles. The company reported a sparkling profit package for its fiscal year, which ended May 31, as physical retail stores began to reopen around the world. Revenue jumped 19% year-on-year to $ 44.5 billion as the United States reported record totals, up 141% year-on-year in the fourth quarter alone. China was even more impressive, posting seven consecutive years of double-digit growth.
Nike’s net profit more than doubled year over year to $ 5.7 billion, and the company declared an annual dividend of $ 1.07 per share, up 12% from $ 0.955 paid a year ago. It paid a quarterly dividend of just $ 0.078 in fiscal 2011, and its dividend has climbed more than 250% since then to $ 0.275 per quarter. This impressive track record is one of the main reasons the company qualifies as a good dividend candidate.
CEO John Donahoe reiterated that Nike’s power play gives it the edge it needs to keep growing. The company now has more than 300 million members in its database, and digital represents 35% of its turnover, more than three years ahead of the plan. With this focus on sharpening its numerical advantage, the company seems poised to continue doing well, with a good chance it will increase its dividend as well.
PepsiCo
Giant of drinks and snacks PepsiCo (NASDAQ: PEP) has also shown resilience during this crisis. Despite global supply chain disruptions and weak consumer spending, the company has consistently posted strong figures for its first half of fiscal 2021 results. Net sales for the first six months of this year grew 14.1% year on year to $ 34 billion, operating profit rose 28.2% to $ 5.4 billion and net profit jumped 36.5% to $ 4.1 billion.
The best figures are the result of lower operating costs which helped to increase margins. The company also announced an expansion and extension of its restructuring initiatives through the end of 2026, in which the company plans to leverage the technology to achieve up to $ 1 billion in annual savings.
Meanwhile, it declared a quarterly dividend of $ 1.075 per share for its most recent quarter, up 5% from a year ago. Compare that to 2011, when the company’s quarterly dividend was just $ 0.48, and it’s clear that PepsiCo has managed to steadily increase its payouts over the years, making it a quality dividend stock. to own.
American Tower
American Tower (NYSE: AMT) is a big beneficiary of the online shift accompanying the pandemic. This real estate investment trust (REIT), which owns and operates more than 214,000 communications sites, benefits from a constant flow of cash flow from long-term leases to wireless service providers and telecommunications companies. This income stability has enabled the company to pay a steadily increasing dividend over the years, making the REIT an ideal vehicle for income seeking investors.
The annual dividend stood at $ 0.90 in 2012, and eight years later it had more than quintupled to $ 4.53 in 2020. For its second quarter of fiscal 2021, the dividend per share increased by 15.5% year over year to $ 1.27, continuing its uninterrupted increase. . Built-in rent increases and high lease renewal rates support dividend stability and allow it to grow steadily over time.
American Tower is also expanding its portfolio through acquisitions, such as the purchase of Telxius Towers announced in January this year. The deal was reached just two months ago, adding more than 7,000 communication sites in Brazil, Peru, Chile and Argentina. These assets are expected to drive the long-term growth of the REIT and will contribute to dividend growth over time.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
