Investors frequently turn to dividend stocks’ stability and dependability during periods of high inflation and slowing economic growth — with good cause.
Hartford Funds’ asset managers investigated the performance of the S&P 500 going all the way back to 1930, focusing on the stocks that pay dividends and the ones that don’t, and discovered dividend-paying equities added 41% to the index’s total return over a near-100-year period.
Buying dividend-paying equities is a time-tested, successful way to deliver better long-term results, and these two S&P 500 stocks are among the finest.
Altria Group (Yield: 6.8%)
In good times and bad, the investor’s portfolio may be lit up by Altria Group (MO 1.81%), the world’s leading major brand of cigarettes, Marlboro. When the economy is expanding, tobacco stocks have unique pricing power that few other businesses enjoy.
Despite the fact that smoking rates are still declining, there are still tens of millions of smokers on the planet, and they are willing to pay for nicotine. Altria’s Marlboro cigarettes has a near-43% market share in the United States and a top 16.2% market share worldwide due to Altria’s agreements with Philip Morris International, which markets the brand outside of the United States.
For decades, the fund has paid out a dividend and has boosted it every year for more than 50 years. Because of its practice of paying out approximately 80% of adjusted earnings as dividends, it is a leading participant in the S&P 500.
Chevron (Yield: 3.4%)
Rising oil and gas prices are helping Chevron’s (CVX 1.60%) bottom line, as it produces record cash flows that it is using to improve its balance sheet and reward investors with stock repurchases. It has pledged to buy back between $5 billion and $10 billion worth of stock each year through 2026, while also restricting the amount it devotes to new projects to $17 billion each year, or roughly half of what it spent previously.
Chevron is one of the least susceptible oil companies, so it won’t be severely impacted by the war in Ukraine. ExxonMobil, on the other hand, had to write down nearly $4 billion worth of investments in Russia owing to the invasion.
Although it does have a 15% stake in a European oil pipeline to the Caspian Sea, which Russian President Vladimir Putin is restricting supplies on in the name of “repairs,” it accounts for only 4% of Chevron’s upstream earnings and under 3% of total profits.
Exxon Mobil boosted its dividend 6% earlier this year, above what Wall Street expected, as it continues to share the profits it makes with investors. It has increased its payout for 35 years in a row, and cash paid to shareholders is anticipated to rise by more than 50% from last year owing to stock buybacks.