Our stock screen identifies companies, like Exxon, that have paid a high dividend for at least 25 years and whose shares are rising this year.
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Buying the highest-yielding stocks can be dangerous, because they are often struggling companies that are vulnerable to dividend cuts.
So we’ve done a stock screen to find companies that have paid a high dividend for at least 25 years and whose share prices have risen nicely this year. Among them are the likes of energy giants Exxon Mobil and Chevron , recently yielding 5.7% and 4.6% respectively, and People’s United Financial bank at 4.2%.
The S&P 500 Dividend Aristocrats Index was the starting point for this stock screen. This screen applied two steps, the first of which was to rank the companies based on their year-to-date returns. From there, we looked for the highest yielders, figuring income is nothing to sneeze at as bond yields remain muted. What’s more, even if any of these stocks sell off, the yield can help reduce some of the pain.
These are by no means pure dividend plays. Exxon Mobil (ticker: XOM) has returned nearly 60% this year, dividends included—though the stock is down about 2% over the last month, according to FactSet.
In October, the company said it planned to increase its quarterly dividend for the first time since April 2019. The energy giant ended up boosting its quarterly disbursement by a penny to 88 cents a share. That move allowed Exxon Mobil to remain in the Aristocrats index. Earlier in the pandemic, there had been concerns that the company would have to cut its dividend.
The stock fell on hard times in recent years amid weaker oil and gas demand and concerns that the company had been too aggressive in its capital spending. But stronger crude prices have helped the entire sector.
Exxon Mobil’s yield was above 10% several times in 2020, according to FactSet. But the lower yield recently of nearly 6% is still more than four times the average of 1.3% for the S&P 500.
Shares of Chevron (CVX) came under pressure early in the pandemic as well. But there was never as much talk about the company having to slash its payout.
The stock has returned about 45% this year, including its dividend. In April the company declared a quarterly dividend of $1.34 a share, up nearly 4% from $1.29.
Also making the cut in our screen was People’s United Financial (PBCT), a regional bank based in Bridgeport, Conn.
The stock has returned about 40% in 2021. The company earlier this year boosted its dividend to 18.25 cents from 18 cents.
Two real estate investment trusts— Federal Realty Investment Trust (FRT) and Essex Property Trust (ESS)–also screened favorably.
Federal Realty Investment Trust, which recently yielded 3.3%, focuses on high-quality retail and mixed-use properties. The company announced in August that it would raise its quarterly disbursement to $1.07 a share from $1.06.
Shares of Essex Property Trust, which focuses on apartments, recently yielded 2.4%.
The company boosted its quarterly dividend in February to $2.09 a share from a little below $2.08 a share.
Total Returners
These five stocks, all members of the S&P 500 Dividend Aristocrat Index, combine nice yields and strong returns.
| Company / Ticker | Recent Price | Dividend Yield | YTD Return | Market Value (bil) |
|---|---|---|---|---|
| Exxon Mobil / XOM | $61.58 | 5.7% | 58.7% | $257.8 |
| Chevron / CVX | 116.20 | 4.6 | 44.9 | 220.5 |
| People’s United Financial / PBCT | 17.50 | 4.2 | 41.6 | 7.3 |
| Federal Realty Investment / FRT | 130.04 | 3.3 | 57.0 | 10.0 |
| Essex Property Trust / ESS | 342.37 | 2.4 | 47.2 | 22.7 |
Data as of Dec. 6
Source: FactSet
Write to Lawrence C. Strauss at [email protected]
