What are dividend investors looking for? The holy grail of dividend investing means stocks in strong companies which pay out a high dividend yield. The yield can provide a steady source of income every quarter which, investors hope, will increase over time. This money can even be reinvested back into the company to ramp up your shareholding. Dividend stocks from financially healthy companies can also be a smart way to hedge your risk against more volatile stocks.
Now let’s take a closer look at the outlook for these three top dividend stocks:
1. General Electric (NYSE:GE)
This is a big dividend stock and the number 1 choice for top-performing investors. For decades, GE has boasted an attractive dividend yield of 3.60% which translates into $0.24. However, the multinational conglomerate also has a very cautious “Hold” outlook from the Street according to TipRanks’ stock analysis page.
With a falling share price ($33 to $26 year-to-date) and shrinking growth, will GE struggle to maintain its current rate of dividend payment growth? On a short-term basis, this could well be the case, but longer-term there is still reason to be bullish.
Indeed, GE has just received three buy ratings in a row from RBC Capital, Credit Suisse and Stifel Nicolaus. Top RBC Capital analyst Deane Dray has a price target of $135 on the stock which translates into a considerable 33% upside from the current share price. According to Dray, new GE CEO John Flannery’s experience in the GE development team will mean he is “readily adept at maximizing value and structuring potential exits”. Flannery is taking over from Jeff Immelt, who quit after a 16-year tenure at General Electric.
2. Procter & Gamble (NYSE:PG)
This multinational consumer goods manufacturer- owner of big-name brands like Gillette and Olay- is the second most popular dividend stock for best-performing Smart Portfolio investors. In fact, PG has just announced a quarterly dividend of $0.6896 per share, or $2.7584 annualized, to be payable on August 15. The annual yield on the dividend comes in at 3.1% which translates into a strong $0.69.
