10 Safe Dividend Stocks for the Holiday Season
If all of us had been given stocks for holiday gifts as opposed to whatever the fad toy was at the time -- think Monster Wheels, old-school GameBoy, Ghostbusters proton pack, and the like -- then most of us would be rich by now.
For this holiday season, in turn, I've decided to do just that. And I urge you to consider doing the same. While you may be castigated around the Christmas tree in the short term, your prescience and generosity will be heralded in years to come.
With this in mind, I've compiled a list of 10 rock-solid dividend stocks that both you and any potential gift recipients can both appreciate and enjoy.
Stocks even Scrooge could love
I took three factors into consideration when compiling my list of dividend stocks to give as gifts.
First, I wanted to feel comfortable that the stocks will continue to pay dividends in years to come. Because we can't predict the future, however, the best predictor of continued payouts is a company's historical commitment to doing so. As a result, I limited my search to members of the S&P 500's Dividend Aristocrats -- an assortment of large-cap blue-chip companies within the S&P 500 that have increased their dividend payments every year for at least 25 consecutive years.
Second, given the recent financial trouble, I wanted companies that are strong enough to survive future shocks of similar magnitude. But again, because we can't predict the future, I settled on using market capitalization as a proxy for strength. I consequently limited the list to companies with a market capitalization above $10 billion.
Finally, once I felt comfortable that the stocks selected were likely to both continue paying dividends and survive future financial shocks, I then simply selected the highest-yielding remainders. And as you'll see, even the lowest-yielding dividend stock is still more than 50% larger than the yield on the 10-year Treasury bond, which is currently at 1.84% -- a commonly used benchmark against which dividend stocks are compared.
Streak of Consecutive Dividend Payments
|Consolidated Edison (NYS: ED)||$17.4 billion||37 Years||4.1%|
|Kimberly Clark||$28 billion||39 Years||4%|
|Johnson & Johnson (NYS: JNJ)||$174 billion||49 Years||3.6%|
|Abbott Laboratories (NYS: ABT)||$85.4 billion||39 Years||3.5%|
|Procter & Gamble (NYS: PG)||$179 billion||55 Years||3.3%|
|PepsiCo (NYS: PEP)||$101 billion||39 Years||3.2%|
|Emerson Electric||$36.4 billion||55 Years||3.3%|
|AFLAC (NYS: AFL)||$19.3 billion||29 Years||3.2%|
|Automatic Data Processing||$25.2 billion||37 Years||3.1%|
|McDonald's (NYS: MCD)||$99.8 billion||35 Years||2.9%|
Sources: Yahoo! Finance, S&P 500 Dividend Aristocrats, dripinvesting.org.
Holiday wrapping not included
Although none of these is a formal recommendation, giving any one of them as a gift is sure to pay both literal and figurative dividends in the future. And if you'd like more ideas about great dividend stocks to buy for yourself and/or give as gifts, check out our recently released free report revealing even more dividend stocks that our analysts have chosen specifically for investors looking to maximize yield while minimizing risk. Get access to this limited time report while it's still available -- it's free.
At the time this article was published Fool contributor John Maxfield owns no shares in any of the companies mentioned in this article. The Motley Fool owns shares of Abbott Labs, PepsiCo, AFLAC, and Johnson & Johnson.Motley Fool newsletter serviceshave recommended buying shares of PepsiCo, Emerson Electric, Johnson & Johnson, Automatic Data Processing, AFLAC, McDonald's, Procter & Gamble, Kimberly Clark, and Abbott Labs, as well as creating diagonal call positions on Johnson & Johnson and PepsiCo. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.