Sure Dividend

High-Quality Dividend Stocks, Long-Term Plan
Member's Area

12 Long-Term High-Dividend Stocks To Buy And Hold For Decades


Updated on April 13th, 2023 by Aristofanis Papadatos

Investors looking for higher levels of income should consider high dividend stocks. We define high dividend stocks as those with current yields above 5%. While interest rates are rising, high dividend stocks still provide investors with more income than most alternatives.

With this in mind, we have created a spreadsheet of stocks (and closely related REITs and MLPs, etc.) with dividend yields of 5% or more.

You can download your free full list of all high dividend stocks (along with important financial metrics such as dividend yield and payout ratio) by clicking on the link below:

 

Click here to instantly download your free high dividend stocks spreadsheet of 200+ securities now, along with important investing metrics.

However, not all high-yield stocks make equally good investments.

Many stocks with extremely high yields are at risk of cutting their dividends if their underlying fundamentals, such as earnings or free cash flow, do not support the dividend payout. This is particularly true during recessions, when many cyclical companies struggle with declining revenue and profits.

Therefore, it is important for income investors to assess whether a high dividend yield is sustainable. The following 12 stocks with high dividend yields above 5%, also have strong business models and established track records of maintaining their dividends, even during recessions.

Table Of Contents

All stocks in this list have dividend yields above 5%, making them very appealing for income investors, and Dividend Risk scores of ‘A’ or ‘B’ to focus on sustainable dividends.

The 12 high dividend stocks are listed in order by dividend yield, from lowest to highest, from the Sure Analysis Research Database.

 High Dividend Stock For Decades: Whirlpool (WHR)

Whirlpool was founded in 1955 and is headquartered in Benton Harbor, MI. It is a leading home appliance company with well-known brands, such as Whirlpool, KitchenAid, and Maytag.

Whirlpool has significant geographical diversification, as it generates 58% of its sales in North America and the rest of its sales in international markets.

Source: Investor Presentation

The company has 56 manufacturing and technology centers and generates 32% of its sales from refrigerators, 26% from laundry appliances, 26% from cooking appliances and most of the rest of its sales from dishwashers.

On January 17th, 2023, Whirlpool entered into an agreement with Arçelik A.Ş to transform its portfolio. Whirlpool is contributing its European major domestic appliance business, while Arçelik will contribute its major domestic appliance, consumer electronics, air conditioning, and small domestic appliance businesses into a newly formed entity. Whirlpool will own 25% of this new entity, which will have combined sales of over €6 billion, while Arçelik will own the remaining 75%. Additionally, Whirlpool agreed to sell its Middle East and Africa business to Arçelik.

On January 30th, 2023, Whirlpool reported fourth quarter and full year 2022 results. For the quarter, sales and earnings per share declined 15% and 37%, respectively, over the prior year’s quarter, primarily due to record results in 2021 amid pent-up demand after the pandemic. For the full year, earnings per share decreased 26%. Whirlpool provided guidance for earnings per share of $16.00-$18.00 in 2023, thus implying a 13% decline at the mid-point.

Click here to download our most recent Sure Analysis report on Whirlpool (preview of page 1 of 3 shown below):


High Dividend Stock For Decades: Walgreens Boots Alliance (WBA)

Walgreens Boots Alliance is the largest retail pharmacy in both the U.S. and Europe. Through its flagship Walgreens business and other business ventures, the $31 billion market cap company has a presence in more than 9 countries, employs more than 315,000 people and has more than 13,000 stores in the U.S., Europe, and Latin America.

On March 28th, 2023, Walgreens reported results for the second quarter of fiscal 2023. Sales grew 3% but adjusted earnings-per-share slumped 27% over the prior year’s quarter, from $1.59 to $1.16, mostly due to high COVID-19 vaccinations in the prior year’s period. Earnings-per-share exceeded the analysts’ consensus by $0.05. The company has beaten the analysts’ estimates for 11 consecutive quarters.

However, as the pandemic has subsided, Walgreens is facing tough comparisons. It thus reaffirmed its guidance for earnings-per-share of $4.45-$4.65 in fiscal 2023, implying a 10% decrease at the mid-point.

Source: Investor Presentation

The stock has plunged 33% off its peak in early 2022 due to the fading tailwind from the pandemic (2.4 million vaccinations in Q2-2023 vs. 11.8 million in Q2-2022) and somewhat more intense competition. However, we expect Walgreens to return to growth mode in the upcoming years.

Click here to download our most recent Sure Analysis report on Walgreens Boots Alliance (preview of page 1 of 3 shown below):

High Dividend Stock For Decades: AT&T Inc. (T)

AT&T is a large telecommunications company serving over 100 million customers. The company generated $121 billion in revenue in 2022.

In April 2022, AT&T completed the spin-off of WarnerMedia to form the new company Warner Bros. Discovery (WBD). AT&T shareholders received 0.241917 shares of WBD for every 1 share of AT&T they held.

Related: Communication Services Stocks List | The 5 Best Now

Source: Investor Presentation

AT&T is a gigantic business, which generates approximately $120 billion of annual revenues. However, the company has grown its earnings per share by only 0.3% per year on average over the last decade. As a result, the stock has dramatically underperformed the broad market over the last decade, declining 32% whereas the S&P 500 has rallied 165%.

The vast underperformance of AT&T has resulted primarily from the poor major investing decisions of the company. AT&T acquired DirecTV for $65 billion in 2015, close to the peak of the business of the acquired company. After having lost about 10 million subscribers, AT&T spun off DirecTV, with an implied enterprise value of only $16.25 billion. A similar situation was evidenced with Time Warner, which AT&T acquired in 2018 but spun off last year. In both situations, AT&T bought high and sold low, thus impairing shareholder value.

On the bright side, now that these poor investing moves belong to the past, AT&T has become a leaner company, which has become more focused on its strong divisions. The latest results of the company reveal strong business momentum and signal that the future of the company will probably be better than the last decade.

Click here to download our most recent Sure Analysis report on AT&T (preview of page 1 of 3 shown below):

 

High Dividend Stock For Decades: 3M Company (MMM)

3M Company sells more than 60,000 products, which are used every day in homes, hospitals, office buildings and schools around the world. The industrial manufacturer has presence in more than 200 countries.

3M has a key competitive advantage, namely its exemplary department of Research & Development (R&D). The company has consistently spent 5%-6% of its total revenues (nearly $2 billion per year) on R&D in order to create new products and thus meet changing consumer needs. This strategy has certainly born fruit, as it has resulted in a portfolio of more than 100,000 patents. Thanks to its focus on innovation, 3M generates nearly one-third of its revenues from products that did not exist five years ago.

3M is a Dividend King, with one of the longest dividend growth streaks in the investing universe. The company has raised its dividend for 64 consecutive years and is currently offering a nearly 10-year high dividend yield of 5.7%. The stock is also trading at a nearly 10-year low P/E ratio of 11.9.

The cheap valuation of 3M has resulted from a strong headwind, namely numerous pending lawsuits. There are nearly 300,000 claims that its earplugs, which were used by U.S. combat troops and were manufactured by Aearo Technologies, a subsidiary of 3M, were defective. The subsidiary of 3M filed for bankruptcy but a U.S. judge ruled that this bankruptcy would not prevent lawsuits from burdening 3M. As a result, no one can predict the final amount of liabilities that 3M will have to pay to its plaintiffs.

Nevertheless, thanks to its rock-solid balance sheet, 3M is likely to prove capable of enduring this headwind and emerging stronger after this crisis is over. 3M has an interest coverage ratio of 12.1 and net debt to market cap of only 31%.

Source: Investor Presentation

Given also its healthy payout ratio of 58% and its reliable business performance, 3M is likely to continue raising its dividend for many more years.

Click here to download our most recent Sure Analysis report on 3M (preview of page 1 of 3 shown below):

 

High Dividend Stock For Decades: Universal Health Realty Income Trust (UHT)

Universal Health Realty Income Trust operates as a REIT that specializes in the healthcare sector. The trust owns healthcare and human service-related facilities. Its property portfolio includes acute care hospitals, medical office buildings, rehabilitation hospitals, behavioral healthcare facilities, sub-acute care facilities and childcare centers. The trust was founded in 1986 and its portfolio consists of 76 properties in 21 states.

Approximately 68% of the properties of the REIT are medical office buildings and clinics while acute care hospitals comprise 17% of the properties.

Source: Investor Presentation

Universal Health Realty Income Trust has grown its funds from operations (FFO) per unit by only 2.8% per year on average over the last nine years, but with remarkable consistency. The REIT has grown its FFO per unit in 7 of the last 9 years. The consistent performance record is a testament to the reliable growth strategy of the trust.

Moreover, the stock is currently offering a 10-year high dividend yield of 6.0%. Its payout ratio is elevated on the surface, at 78%, but it is standing at a nearly 10-year low level for this REIT. Given also the resilient demand for healthcare during recessions, the dividend of the REIT has a meaningful margin of safety.

Click here to download our most recent Sure Analysis report on UHT (preview of page 1 of 3 shown below):

 

High Dividend Stock For Decades: Bank of Nova Scotia (BNS)

Bank of Nova Scotia is the third-largest financial institution in Canada behind the Royal Bank of Canada (RY) and the Toronto-Dominion Bank (TD). Scotiabank operates four core business segments – Canadian Banking, International Banking, Global Wealth Management, and Global Banking & Markets.

Bank of Nova Scotia has a different growth strategy from its peers in the Canadian financial sector. While other banks try to expand in the U.S., Bank of Nova Scotia is focused primarily on growing in high-growth emerging markets. It is a leading financial institution in the high-growth markets of Mexico, Peru, Chile and Colombia, which have a total population of about 230 million people and have under-banked markets. These markets have the advantages of higher population growth, higher GDP growth and wider net interest margins than the U.S.

Bank of Nova Scotia is taking advantage of the fragmented status of these markets and is likely to keep growing for several years. The company is the third-largest bank in Chile, the second-largest card issuer in Peru and the fourth-largest bank in the Dominican Republic.

Bank of Nova Scotia has grown its dividend for 11 consecutive years and is currently offering a nearly 10-year high dividend yield of 6.1%. It is also important to note that the bank proved resilient during the Great Recession, which was the worst financial crisis of the last 90 years, and during the coronavirus crisis. Given also the healthy payout ratio of 52% of the bank, its dividend has a wide margin of safety. Therefore, investors can lock in the nearly 10-year high dividend yield of 6.1% of the bank and rest assured that the dividend will remain safe for the foreseeable future.

Click here to download our most recent Sure Analysis report on BNS (preview of page 1 of 3 shown below):

High Dividend Stock For Decades: Verizon Communications (VZ)

Verizon Communications is one of the largest wireless carriers in the country. Wireless contributes three-quarters of all revenues, and broadband and cable services account for about a quarter of sales. The company’s network covers ~300 million people and 98% of the U.S.

Verizon exhibits lackluster business momentum right now. Last year, the company posted essentially flat sales and saw its earnings per share dip 6% due to high operating expenses as well as high interest expense. Verizon has provided guidance for earnings per share of $4.55-$4.85 in 2023, implying a further 7% decrease.

Source: Investor Presentation

However, investors should note that the stock has become exceptionally cheap. To be sure, Verizon is currently trading at a nearly 10-year low P/E ratio of 8.3 and is offering a nearly 10-year high dividend yield of 6.6%. Thanks to the solid payout ratio of 56%, the strong business position of the company and its resilience to recessions, its dividend should be considered safe. It is also worth noting that Verizon has grown its dividend for 18 consecutive years. Overall, whenever Verizon returns to growth mode, it is likely to offer excessive returns to those who purchase the stock around its current stock price.

Verizon stock is also appealing for risk-averse investors due to its low volatility. With a Beta value of 0.34, Verizon is a low beta stock.

Click here to download our most recent Sure Analysis report on Verizon (preview of page 1 of 3 shown below):

 

High Dividend Stock For Decades: The First of Long Island Corporation (FLIC)

The First of Long Island Corporation is the holding company for The First National Bank of Long Island, a small-sized bank that provides a range of financial services to consumers and small to medium-sized businesses. Its offerings include business loans, consumer loans, mortgages, savings accounts, etc.

FLIC operates around 50 branches in two Long Island counties and several NYC burrows, including Queens, Brooklyn, and Manhattan. FLIC has a history of almost 100 years, as it was founded in 1927, and the company is headquartered in Glen Head, New York.

Thanks to its disciplined and conservative management, FLIC has exhibited an admirable performance record. The company has consistently grown its earnings per share every single year over the last nine years.

Source: Investor Presentation

Thanks to its consistent earnings growth record, FLIC has raised its dividend for 45 consecutive years. This is undoubtedly an impressive dividend growth streak.

Moreover, the stock is currently offering a nearly 10-year high dividend yield of 6.6%, with a solid payout ratio of 49%. Given the robust business model of the company, its dividend is safe.

Click here to download our most recent Sure Analysis report on First of Long Island Corporation (preview of page 1 of 3 shown below):

High Dividend Stock For Decades: Enbridge Inc. (ENB)

Enbridge is an oil & gas company that operates the following segments: Liquids Pipelines, Gas Distributions, Energy Services, Gas Transmission & Midstream, and Green Power & Transmission.

You can see an overview of the company’s business footprint in the image below:

Source: Investor Presentation

Enbridge reported its fourth quarter earnings results on February 10th. The company generated higher revenues during the quarter, but since commodity prices are mostly a pass-through cost for the company, higher revenues do not necessarily translate into higher profits. During the quarter, Enbridge still managed to grow its adjusted EBITDA by 5.4% year over year, from CAD$3.7 billion to CAD$3.9 billion, primarily thanks to stronger contributions from the liquids pipelines segment.

Enbridge grew its distributable cash flow (DCF) per unit by 1% in 2022 and expects to grow this metric by another 2% this year. It also raised its distribution by 3% in late 2022 and thus it has now raised its distribution for 28 consecutive years. It is a high-yield Dividend Champion.

Click here to download our most recent Sure Analysis report on Enbridge (preview of page 1 of 3 shown below):


High Dividend Stock For Decades: Enterprise Products Partners (EPD) 

Enterprise Products Partners is a midstream MLP, with an immense network of pipelines and storage tanks. It is focused primarily on natural gas. The network of the MLP includes nearly 50,000 miles of pipelines of natural gas, natural gas liquids, crude oil and refined products. The network of Enterprise Products Partners also includes storage capacity of more than 250 million barrels.

Enterprise Products Partners has a fee-based business model, which includes minimum-volume requirements and hence it is resilient to recessions. Thanks to its defensive business model, Enterprise Products Partners incurred just a 15% decrease in its DCF per unit in 2020, in one of the fiercest downturns in the history of the energy market.

Enterprise Products Partners has raised its distribution (in CAD) for 24 consecutive years. The stock is currently offering a 7.3% distribution yield, with a solid payout ratio of 56%. Moreover, the MLP has one of the strongest balance sheets in the MLP universe, with a BBB+ credit rating from S&P and a Baa1 rating from Moody’s. Thanks to its healthy payout ratio, its strong balance sheet and its robust business model, Enterprise Products Partners can easily continue raising its distribution for many more years.

Moreover, Enterprise Products Partners has many growth projects underway.

Source: Investor Presentation

Nevertheless, investors should be aware that Enterprise Products Partners has grown its DCF per unit by 2.5% per year and its distribution by 4.1% per year on average over the last decade. Therefore, it is prudent to expect modest distribution growth in the upcoming years.

Click here to download our most recent Sure Analysis report on Enterprise Products Partners (preview of page 1 of 3 shown below):

High Dividend Stock For Decades: Magellan Midstream Partners (MMP) 

Magellan Midstream Partners has the longest pipeline system of refined products in the U.S. It has a pipeline network that is linked to almost half of the total U.S. refining capacity. The transportation and storage of refined products generates about 71% of total operating income of the MLP while the transportation and storage of crude oil generates the remaining 29% of operating income.

Magellan is one of the highest-quality MLPs in the investing universe thanks to some key characteristics. Most MLPs carry high debt loads, post poor free cash flows due to their hefty capital expenses, and dilute their unitholders to a great extent on a regular basis. They also tend to have payout ratios near or above 100%.

Magellan is superior in all these aspects. It has a strong balance sheet and has posted positive free cash flows for more than 10 consecutive years. In addition, it has a healthy payout ratio and does not dilute its unitholders. All these attributes are testaments to the quality and the discipline of its management, which invests only in high-return projects.

Magellan has a fee-based business model, which has proved resilient even during the most adverse business conditions. As a result, it has exhibited an exceptional distribution growth record. It raised its distribution for 70 consecutive quarters at a 12% average annual rate, until the second quarter of 2020, in which it froze its distribution due to the pandemic. It froze its distribution for seven consecutive quarters and resumed raising it in late 2021 thanks to the recovery of the energy market. Overall, Magellan has raised its distribution for 21 consecutive years, at a 10% average annual rate.

Source: Investor Presentation

The stock is currently offering a 7.6% distribution yield with a solid payout ratio of 71%. While this payout ratio is somewhat high, it is reasonable for a company with such a robust business model. Given also its solid balance sheet, Magellan is likely to continue raising its distribution for many more years. The only caveat is the slow growth of the MLP, which should result in modest distribution growth in the upcoming years.

Click here to download our most recent Sure Analysis report on Magellan Midstream Partners

(preview of page 1 of 3 shown below):

High Dividend Stock For Decades: Altria Group (MO)

Altria Group was founded by Philip Morris in 1847. Today, it is a consumer staples giant. It sells the Marlboro cigarette brand in the U.S. and some non-smokeable brands.

The flagship brand continues to be Marlboro, which commands over 40% retail market share in the U.S.

Altria also has a 10% ownership stake in global beer giant Anheuser-Busch InBev and a large stake in Cronos Group (CRON), a cannabis company.

Despite the secular decline of consumption of cigarettes per capita, Altria has been able to grow its earnings per share year after year thanks to the inelastic demand for its products.

Source: Investor Presentation

Thanks to its strong pricing power, Altria has grown its earnings per share every single year over the last decade, at an 8.8% average annual rate.

Unfortunately, Altria has been caught off-guard in the ongoing transition of consumers towards alternative tobacco products, such as vaping products. About five years ago, Altria acquired a 35% stake in Juul, a leader in vaping products, for $12.8 billion, but that investment proved disastrous. After the acquisition, Juul incurred several hits due to restrictions from regulatory authorities. The company is also facing excessive potential fines from regulators in the future. Consequently, Altria recently divested its stake in Juul and thus its whole investment in the company was written off.

Due to its failed investment and its weak position in alternative tobacco products, Altria is currently trading at a nearly 10-year low price-to-earnings ratio of 9.0 and is offering a nearly 10-year high dividend yield of 8.4%, with a 10-year low payout ratio of 75%. The stock has become exceptionally cheap.

It is also important to note that Altria continues growing its earnings per share to new all-time highs year after year. The company is on track to grow its bottom line by about 4% this year. Whenever the market shift its focus on the rock-solid business model of Altria, the stock is likely to offer excessive returns to its shareholders off its current depressed price.

Altria has grown its dividend for over 50 years, placing it on the exclusive Dividend Kings list. It is also a Dividend Champion.

Click here to download our most recent Sure Analysis report on Altria Group (preview of page 1 of 3 shown below):

Final Thoughts & Additional Reading

The 12 high dividend stocks analyzed above all have dividend yields of 5% or higher. And importantly, these securities generally have better risk profiles than the average high-yield stock.

That said, a dividend is never guaranteed, and high dividend stocks are potentially at risk of dividend reductions or suspensions if a recession occurs in the near future.

Investors should continue to monitor each stock to make sure their fundamentals and growth remain on track, particularly among stocks with extremely high dividend yields.

If you are interested in finding high-quality dividend growth stocks and/or other high-yield securities and income securities, the following Sure Dividend resources will be useful:

High-Yield Individual Security Research

Other Sure Dividend Resources

Thanks for reading this article. Please send any feedback, corrections, or questions to support@suredividend.com.



articles
Golden Rule Commitment
contact - legal - testimonials