Top 10 U.S. Dividend Stocks with High Dividend Yields

You’re interested in U.S. stocks, and among them, you’re curious about dividend stocks?

As you keep receiving the cash companies pay out every quarter, you start to feel, “Ah, so this is what it means when money makes more money.”

So we looked into it: companies in the U.S. with high dividend yields.

Hold on a second,

Is a high dividend yield alone always a good thing?

It would hurt if you invested just because the dividend was high, only for the company to cut its dividend not long after you bought in, right? That’s why we focused on companies that have raised their dividends for a long time—specifically, Dividend Kings, which have increased their payouts for at least 50 consecutive years—and then picked out the U.S. companies with the highest dividend yields from that list.

Dividend yield:

This is the rate of return investors receive in dividends from a company by holding its stock. It is calculated as “(dividend per share / current share price) * 100,” and a higher dividend yield means a higher return from dividends.

Dividend per share (DPS):

This is the amount of dividend paid for each share you own. If you hold 10 shares of a stock that pays a $1 dividend per share, you will receive $10 in dividends every quarter.

Payout ratio:

This is the proportion of net income that is paid out as dividends. It is calculated as “dividends per share / earnings per share,” and a high payout ratio means the company is returning a large share of what it earns to shareholders. While it varies by industry, companies need to retain a certain amount of capital for future growth, so a payout ratio in the range of roughly 35% to 55% is generally considered healthy.

Altria is a consumer staples company that manufactures and sells cigarettes and smokeless tobacco products, and has raised its dividend for 54 consecutive years. Its major brands include Marlboro, Black & Mild, Copenhagen, and Skoal.

If you’re a smoker, you might be wondering, isn’t Marlboro made by Philip Morris?

Yes, Philip Morris is a subsidiary of Altria.

Recently, Altria received FDA approval for its menthol e-cigarette products and is pushing ahead with a transition toward smokeless products. Companies like Altria that are in the tobacco business often have few attractive ways to deploy their excess cash, so they tend to return a large amount of it through dividends.

Universal is also a consumer staples company, supplying leaf tobacco and plant-based ingredients to countries around the world, and likewise has raised its dividend for 54 consecutive years. And no, this is not Universal Studios. The company primarily processes and supplies flue-cured, burley, dark air-cured, and oriental leaf tobacco.

Universal is another company in the tobacco space, and you can see that it also has a high payout ratio.

Northwest Natural Holding is a utility company that supplies natural gas to households and businesses, and has raised its dividend for 68 consecutive years.

At the end of 2023, Northwest introduced a new rate structure in the state of Oregon that is scheduled to take effect on November 1, 2024. Once implemented, this rate plan will allow the company to recoup the costs of infrastructure and technology upgrades it has invested in and significantly improve profitability.

However, due to regulatory lag—the time delay before new rate structures or regulatory changes are approved—the underlying uncertainty may continue to weigh on the share price for a while.

Black Hills is a utility company that supplies electricity and natural gas, and has raised its dividend for 54 consecutive years.

Energy companies are constantly criticized in the name of sustainable development. Naturally, Black Hills has not been immune, and to demonstrate that it is taking ESG seriously, it signed a power purchase agreement (PPA) in August 2024 for a 200 MW solar power plant in Colorado. This is Black Hills’ first large-scale solar project.

On paper, the company is strengthening its renewable energy portfolio and signaling an intention to replace fossil-fuel-based sources, but investments in renewables can, from the company’s perspective, increase capital spending and weigh on the share price. Ideally, the company will find a workable balance between ESG-driven pressure and strategic spending.

Kenvue is a consumer staples company that has raised its dividend for 61 years, selling a wide range of everyday health care products. Aveeno, BAND-AID, Johnson’s, Listerine, Neutrogena, Tylenol…

There are many products we know well, such as the mouthwash Listerine, the pain reliever Tylenol, and the bandage BAND-AID.

Kenvue recently introduced a new pain relief product at the PAINWeek Conference and unveiled a new mouthwash line for Listerine. While building on its existing portfolio, the company is also planning to expand into the skin health and beauty segment.

Federal Realty Investment is a REIT that owns, operates, and develops commercial real estate, and has increased its dividend for 56 years.

REIT stands for Real Estate Investment Trust. These vehicles invest in construction and real estate–related businesses and distribute the rental income or other profits generated to investors as dividends.

It is almost natural that REITs offer high dividend yields, because this is one of the conditions for being exempt from corporate income tax. Under Internal Revenue Code Section 857, a REIT must distribute at least 90% of its taxable income as dividends in order to receive tax benefits.

You might think that if a company pays out a lot in dividends, its growth potential is limited, because a higher payout ratio means a lower level of retained earnings. From the perspective of someone who wants the company to grow, it can be frustrating to hear that the law requires 90% of taxable income to be paid out as dividends.

However, rental income from real estate tends to be relatively stable and predictable; that stable cash flow can be used as collateral to borrow at low interest rates; and additional capital can be raised through asset sales and appreciation. Taken together, these factors show that REITs can continue to grow and operate their businesses even with relatively low levels of retained earnings.

United Bankshares is a financial services company that has raised its dividend for 50 consecutive years.

Yes, it’s a bank. What more is there to say?

Like most banks, it generates cash primarily through interest income on loans and fees from financial services, and interest rates have a major impact on its performance.

One way to become a more stable bank that is less sensitive to interest rates is to diversify non-interest income.

To compare it with Bank of America, which Warren Buffett owns: Bank of America generates non-interest income through investment banking and wealth management for a global client base, whereas United Bankshares is a regional bank focused on traditional banking services for local communities and small businesses.

Bank of America’s dividend yield is 2.77%. If dividend yield is your priority, United Bankshares may be the better fit; if you want a somewhat more stable bank, Bank of America is the more suitable choice.

Stanley Black & Decker is an industrial company that manufactures and sells a wide range of tools and industrial equipment, and has raised its dividend for 56 consecutive years.

Through its DEWALT and CRAFTSMAN brands, it is expanding a lineup of smart tools with features such as location tracking, battery status monitoring, and theft prevention.

The company is highly sensitive to changes in raw material prices, such as metals and battery materials, and as a result has recently been reporting losses in earnings per share.

When a company with negative earnings per share pays a dividend, the payout ratio is also shown as negative, so we have not listed a payout ratio for Stanley Black & Decker.

As you can probably tell from the name, Hormel Foods is a consumer staples company that sells food products and boasts 58 consecutive years of dividend increases.

The company behind the famous Spam brand, Hormel Foods is also highly sensitive to increases in raw material costs.

More recently, it has been working to expand the product lineups of brands you often see in convenience stores, such as Planters, Skippy, and Corn Nuts.

AbbVie is a healthcare company that researches, develops, and sells biotech and pharmaceutical products, and has raised its dividend for 52 consecutive years.

Its flagship product is Humira (adalimumab), used to treat various forms of arthritis. However, there is a major issue: Humira’s key patents expired outside the United States in 2016 and in the U.S. in 2023.

As a result, copycat drugs known as biosimilars have been able to enter the market, and the decline in sales of Humira, AbbVie’s main cash cow, has become all but inevitable.

To offset this revenue decline, AbbVie is selling new autoimmune therapies such as Rinvoq and Skyrizi and is conducting clinical trials to expand their approved indications.

So far, we’ve looked at U.S. Dividend Kings with high dividend yields.

A prudent investor won’t jump in just because the yield is high, but will fully understand the downsides of dividends before investing.

Just like you learn about side effects before getting a prescription.

For more details, see the article below.

Why dividend investing can hurt you