Consider more than market value.
Bigger isn’t always better on Wall Street. Even when these corporations succeed, they often aren’t all that concerned with shareholders. Consider tech giant Facebook (ticker: FB), where CEO Mark Zuckerberg holds 75% of the Class B shares and controls almost 60% of total voting rights. It’s no wonder Facebook doesn’t pay a dividend when Zuckerberg can simply do whatever he pleases without worrying about big institutional traders, let alone regular investors. But not all mega-cap stocks are built the same. There are huge companies valued at more than $30 billion that made shareholders a clear priority through generous dividend payments. If you’re looking for a big company with a big dividend, don’t go simply for the biggest market value. Start with this list of eight income stocks instead.
AbbVie is the sister company of Abbott Laboratories (ABT), created in a 2012 spin-off to allow ABBV to focus on developing and selling branded pharmaceutical products while Abbott Labs is more a of a diversified health care firm covering nutrition, medical devices and more. Still, while not as broad-reaching, the drug business alone is incredibly substantial, generating $35 billion a year in revenue for AbbVie and fueling consistent dividend payments. Furthermore, those payouts remain roughly half of total earnings and thus are ripe for future increases.
Market cap: $110 billion
Current yield: 5.7%
BHP Group Ltd. (BHP)
Natural resources giant BHP primarily operates petroleum, copper, iron ore, and coal segments around the world. The company engages in the exploration, development, and production of oil and gas properties, as well as the mining of copper, silver, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and energy coal. And in case that isn’t widespread enough, it also is involved in nickel, gold, silver, uranium and fertilizer component potash. The Australia-based company may not be a household name, but is at the top when it comes to raw materials stocks. And given its generous dividend, this makes BHP an attractive part of any diversified portfolio.
Market cap: $120 billion
Current yield: 5.4%
CNOOC Ltd. (CEO)
CNOOC is another great example of a massive company that is at the center of an in-demand commodities market. An acronym for the state-run China National Offshore Oil Corp., this company is a dominant energy player in Asia with oil and gas exploration operations across the South China Sea as well as in regions of Africa, South America and Australia. Admittedly, energy stocks carry risk amid the focus on renewable resources and carbon emissions. And there are certainly reasons to be skeptical of a Beijing-run corporation at a time of trade tensions. However, this deeply entrenched stock carries a market cap larger than ConocoPhillips (COP) — and an even more generous dividend to boot. So if you’re interested in income or energy stocks at all, consider CEO a viable option.
Market cap: $70 billion
Current yield: 6.1%
Dominion Energy (D)
Dominion is among the largest publicly traded utilities in the U.S., and based on current payouts, it is also one of the most generous. With operations across Virginia and North Carolina, Dominion operates traditional electricity generation operations as well as natural gas distribution and storage. Dominion’s customer base totals about 5 million people. With unrivaled scale, the utility’s stock is lower risk than some of its peers. And considering utility stocks in general are an incredibly safe bet given the natural demand for electricity and the high-regulated nature of the industry, long-term investors can have confidence in this high-paying stock.
Market cap: $65 billion
Current yield: 6.9%
What’s old is new again in Dow, as the company was originally a stand-alone chemicals firm that was merged with rival DuPont — and then spun out again in early 2019. The result is a similar firm but one with more streamlined operations and product offerings, primarily focused on plastics, chemicals and agricultural products. Though Dow likes to call its business “materials science solutions,” it’s not incredibly glamorous and focused on mundane products that include packaging and protective coatings. But these items have a host of different uses in a wide array of other businesses, adding up to strong demand — and supporting a generous dividend of 70 cents a quarter, with the potential for future increases.
Market cap: $35 billion
Current yield: 5.9
Kraft Heinz Co. (KHC)
Foods icon Kraft Heinz is the mashup of two traditional powerhouses merged under a plan that included backing from Berkshire Hathaway (BRK.A, BRK.B) and its famous CEO Warren Buffett. However, the $50 billion deal back in 2015 didn’t seem to pan out quite as planned, as after initial cost-cutting benefits faded it started to become evident that KHC wasn’t keeping up with consumer tastes. The result was a more than 60% decline from 2017 highs to lows earlier this year. But Kraft has some of the biggest consumer brands on the planet and a business that generates $25 billion in annual revenue worldwide. Patient income investors may see the post-merger flop as a great buying opportunity in a long-term holding.
Market cap: $35 billion
Current yield: 5.8%
Altria Group (MO)
Speaking of Kraft, older investors may remember that Kraft was born out of a massive 2003 rebranding and restructuring of consumer giant Philip Morris International (PM). The result was the foods business, an international tobacco company in PM and an American subsidiary that became Altria. In fact, there have been rumblings lately that Altria may join back up with Philip Morris. But given the uncertainty around tobacco markets and health concerns over vaping, that deal seems to be off the table. In the meantime, MO stock commands a stable market share with big brands that include Marlboro cigarettes as well as Chateau Ste. Michelle wines — products that see strong demand in good times and bad, fueling reliable dividends to shareholders.
Market cap: $75 billion
Current yield: 8.3%
Simon Property Group (SPG)
As one of the largest publicly traded real estate investment trusts, or REITs, Simon owns and operates mixed-use facilities including malls, outdoor shopping centers and other commercial properties that host restaurants, retailers and entertainment venues. As the largest mall operator in the U.S., chances are the next time you go to the store that you’re stepping into a Simon facility. Though e-commerce trends are a pressure for brick-and-mortar merchants, remember that SPG is just the real estate operator and not concerned with margins on TVs or sweaters. As a result, it simply has to cash the rent check — and can pass on a large share of that cash to shareholders via regular dividends.
Market cap: $47 billion
Current yield: 5.3%
Mega-cap dividend stocks that pay more:
— AbbVie (ABBV)
— BHP Group Ltd. (BHP)
— CNOOC Ltd. (CEO)
— Dominion Energy (D)
— Dow (DOW)
— Kraft Heinz Co. (KHC)
— Altria Group (MO)
— Simon Property Group (SPG)
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