Jason Williams' Top 5 Dividend Stocks

Welcome back to the week and back to my educational “series” on dividend investing.

I use quotation marks because this is installment No. 2 and also the final episode.

But it’s a doozy, because today I’m going to share my top five dividend stocks…

Plus, I’m going to give you special access to a sixth income-generating opportunity that’s going to pay out nearly $3 BILLION in 2023 alone!

But before we get into that, let’s recap why dividend investing is so important and why it’s important to pick the right dividend investments…

Dividends Lead to Gains

First off, let’s just sum up why I’m so adamant about making every investor a dividend investor:

It’s the best kind of investor to become. Period. Hard stop.

As I pointed out last week, countless studies show that companies that pay dividends tend to outperform those that do not share profits with shareholders.

One study that I cited is a research paper by professors Eugene Fama and Kenneth French.

Fama and French analyzed the returns of stocks listed on the NYSE, Amex, and Nasdaq exchanges from 1927–2014.

And they found that stocks that paid dividends had higher returns and lower volatility than non-dividend-paying stocks.

Another study I mentioned by Ned Davis Research looked at the performance of S&P 500 stocks from 1972–2018.

It found that, over that period, dividend-paying stocks outperformed non-dividend-paying stocks by an average of 2.4% per year.

That kind of outperformance shows that you need dividend investments in your financial arsenal.

But the next bit of research shows that you can’t just pick any old dividend-paying stock…

Growing > Paying

You see, there’s even more research out there showing that companies that grow their dividends steadily over time outperform all other stocks…

And that includes dividend payers that don’t give investors a raise — even those with sky-high yields.

The reason is simple. You’re taking advantage of two of the most powerful forces in finance when you make long-term investments in dividend growers: time and compounding.

Think of it this way: If you put $5,000 into a $50 stock that pays 8% a year and you hold it for 20 years… your investment will be worth $24,377.

That's a 387% gain. Not bad. But it could be a lot better.

That same $5,000 in a stock that pays just 3% — but grows that payment at 20% a year — would be worth $4,055,388 after 20 years. That's a phenomenal 81,007% gain!

And I'm sure I don't have to tell you that $4 million is a lot more than $24,000.

So, now that I’ve reminded you why you need dividend investments in your portfolio, let me get you started with my top five dividend growers…

Dividend Grower #1 — The Lord of Lithium

The first company I’d recommend for any and every dividend portfolio is Albemarle Corporation (NYSE: ALB). It’s an American company and it’s also one of the two biggest lithium producers in the world. That puts it at the very top of an industry that’s got a whole lot of growth ahead of it.

Nearly every wealthy nation is trying to transition to renewable energy. That’s going to require a ton of lithium (technically, it’s going to require millions of tons of it). And that means long-term revenues for Albemarle.

But that’s not the only reason it deserves a spot in any income strategy. It’s also got a 29-year history of annual dividend increases. It knows that there’s nothing better than getting a raise every year. And it’s got no plans to break that tradition.

Dividend Grower #2 — Old Dog, New Tricks

Next up on our list is a company that’s been around in various forms for over a hundred years. It’s been helping power the world ever since its parent company’s founding back in 1870. And it’s also got a long history of hiking its dividend: 40 years.

It’s Exxon Mobil (NYSE: XOM), and it makes the list because it’s an old dog that’s learning some new tricks (plus, the president just said it’s got at least 10 years left providing the energy to run our economy). So while Exxon’s oil and gas powers the country, it’ll be working on the next generation of fuels to power us forward into the future.

You see, Exxon is a major oil and gas producer, but it’s not just reinvesting its profits into finding more oil and gas. In addition to paying out a juicy chunk of them to shareholders, it’s also investing a large portion into research and development to help it diversify away from fossil fuels.

Dividend Grower #3 — The Monthly Dividend Company

The next investment on my list counts its highest honorific as being such a good dividend investment. It’s so serious about paying out income to shareholders that it even gave itself the nickname “The Monthly Dividend Company.”

Its name is Realty Income Corp. (NYSE: O) and it’s what’s known as a real estate investment trust, or REIT. A REIT is a special kind of company that owns mostly real estate and gets special tax treatment as long as it pays at least 90% of its pre-tax profits to shareholders.

That structure lends itself to some juicy payments. And Realty Income takes its dividend increases seriously. So seriously, in fact, that it’s raised the payment every QUARTER for the past 101 quarters!

It’s paid 632 consecutive monthly dividend payments. And its track record for raising those payments goes back 30 years. It’s definitely earned the right to be called a top dividend stock.

Dividend Grower #4 — A Maryland Tradition

There aren’t many companies left that were founded in my home state of Maryland. Most of them have been acquired by larger operations or have been run out of business by other operations. But one of the few that’s still around is also a great dividend investment.

It’s Stanley Black & Decker (NYSE: SWK). And it’s been giving investors a raise every year for the past 55 years! It’s secret to being able to hike payouts year in and year out no matter what the economy or stock market throws its way is that it keeps its payout ratio nice and reasonable.

The payout ratio is the percentage of overall profits that are distributed to shareholders as dividends. When it starts to get too high, it gets difficult for the company to keep growing the payout. Sometimes, it even gets tough to keep making the payout.

But with a payout ratio of just 60%, Stanley should have no trouble keeping that half-century-plus streak running.

Dividend Grower #5 — The New Kid on the Block

My final dividend grower for you today is a company that’s been around for decades but is only lately getting the recognition it deserves. But despite being unnoticed for so long, it’s still been rewarding shareholders with dividend raises for the past 29 years.

It’s NextEra Energy (NYSE: NEE) and in 2020, it briefly overtook Exxon Mobil to become the largest energy company in the United States by market cap. Since then, Exxon has gone on a run as energy prices have gone through the roof. But NextEra has shown that it’s not to be ignored and will eventually catch back up.

I’m so confident that it’ll make a comeback because NextEra was one of the first movers on renewable energy, and that’s given it a huge leg up on the competition in that field. It’s got way more experience than anyone else in the market. And it uses that clout to keep expanding its reach. And it’ll keep on raising that dividend every year until it takes back the crown. 

Bonus Income Opportunity — “Prime Profits”

And finally, we get to my special bonus opportunity. I call it “Prime Profits.” It’s a program of sorts that I uncovered several years ago that allows investors to “skim” a tiny percentage off the price of every package that leaves an Amazon distribution center or warehouse.

It’s 100% legal and anyone can participate in it. But very few people even realize it exists, which means each share of the near $3 BILLION jackpot is even bigger for those that do.

I introduced the members of my investing community, The Wealth Advisory, to it a few years back, pretty much immediately after I uncovered it and made sure it was the real deal.

Today, I want to share it with you. Because the markets are volatile. And there’s no telling if we’re really in a new bull market or about to head back down the toilet.

But whether the markets go up or down this month… whether Amazon’s stock shoots to $200 or falls to $2…

This payment is going to go out on March 14, come hell or high water.

And everyone who gets on the list before the end of the day will get a share.

And no matter if the S&P 500 ends the year at 4,500 or 2,500, the overall payment is going to be $2.918 BILLION.

Like Thanos in The Avengers, it’s inevitable. The only question is: Will you be collecting your share?

I hope, come March 14, you will. But the final choice has to be yours.

To your wealth,

Jason Williams

@TheReal_JayDubs

Angel Research on Youtube

After graduating Cum Laude in finance and economics, Jason designed and analyzed complex projects for the U.S. Army. He made the jump to the private sector as an investment banking analyst at Morgan Stanley, where he eventually led his own team responsible for billions of dollars in daily trading. Jason left Wall Street to found his own investment office and now shares the strategies he used and the network he built with you. Jason is the founder of Main Street Ventures, a pre-IPO investment newsletter; the founder of Future Giants, a nano cap investing service; the editor of Alpha Profit Machine, an algorithmic trading service designed specifically for retail investors; and authors The Wealth Advisory income stock newsletter. He is also the managing editor of Wealth Daily. To learn more about Jason, click here.