Dividend-paying stocks have been a popular investment choice for investors at the beginning of this year, and those who invested in these stocks are likely to have experienced positive returns. US companies paid a record $164.3 billion in dividends to shareholders during the first quarter, indicating a rise in profits. Some of the major contributors to this increase included Meta, Walt Disney, and T-Mobile.
Moving forward, S&P 500 companies are expected to increase their dividend payments by 6% this year, slightly higher than the 5.1% growth seen last year. Despite their continued success, stocks such as Meta are considered part of a crowded trade by Bank of America’s June Global Fund Manager Survey. If investors are waiting for a market pullback to enter these popular stocks at a better price, they may need to remain on the sidelines for a while. Alternatively, one strategy is to look for strong dividend-paying stocks with price potential, even if they may be smaller and less popular.
When investing in dividend-paying stocks, it is important to note that not all dividend stocks are equal. A high dividend yield does not automatically signify a better investment opportunity. High dividend yields could be a result of a low or declining stock price, indicating increased risk. Companies that pay significant dividends might struggle to sustain them long-term, and any dividend cuts could impact stock prices negatively. For investors seeking guidance on where to begin, TipRanks has compiled a list of 14 stocks with the highest dividend yields among those with a “strong buy” analyst consensus rating.
