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Since the appointment of the new CEO, Verizon’s stock has seen an 8% decline, which, interestingly, has pushed its already considerable dividend yield to nearly 7%.
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Realty Income is often referred to as a “monthly dividend company,” underscoring its appeal for those looking for consistent income.
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Kimberly-Clark stands as a prime example of a consumer staples stock, and it’s recognized for being a strong contender in the dividend space.
In the midst of the current bull market, it’s easy to underestimate the wealth-generating potential of dividends. When attention is often on rapid-growth stocks, dividend-paying stocks might feel like a bit of a letdown. Still, historical data offers a different perspective.
From 1960 to 2024, a significant portion—roughly 85%—of dividends were reinvested. According to a report by Hartford Foundation, a $10,000 investment in 1960 would balloon to about $982,000 by 2024 if solely considering stock price growth. However, if dividends had been reinvested, the total return could soar to around $6.4 million.
With many high-dividend stocks now trading at appealing prices amid lower stock values, it might be an opportune moment to consider adding income-generating assets to your portfolio. Let’s examine a few noteworthy options.
Shares of Verizon Communications (NYSE: VZ) have dipped since the announcement of Dan Schulman as the new CEO, replacing Hans Bestberg. This leadership change has stirred some uncertainty among short-term investors, but it might just be the right moment to secure a solid dividend. Despite recent fluctuations, Verizon reported a robust second quarter with a 5% increase in sales, totaling $34.5 billion, while earnings per share (EPS) increased by 8% to $1.18.
The management has also revised its projections for the full year, which now includes improvements in earnings before interest, taxes, depreciation, and amortization (EBITDA) and adjusted EPS. With a price-to-earnings (P/E) ratio sitting at 9.3, it’s trading at a noticeable discount compared to the broader market.
Verizon has been consistently generating free cash flow, anticipated to reach $8.8 billion in the first half of 2025. That said, the competitive telecom landscape presents challenges to stable revenue and profit growth, which has kept the stock relatively flat over the past couple of years.
On a side note, the prior CEO from PayPal might bring about favorable changes. During his tenure, PayPal’s revenue tripled, adding a substantial number of customers to its services.
Meanwhile, if you’re interested in income-generating real estate, Realty Income (NYSE: O) could be worth a look. This REIT, which specializes in holding income-producing commercial properties, has an extensive portfolio including well-known brands. Notably, they’ve consistently paid out dividends, with nearly $17 billion distributed since their inception in 1969.
Last June, Realty Income announced a 3.7% increase in its monthly dividend, affirming its commitment to shareholders. With a compelling annualized yield compared to the broader market, it has generated a compound return of 13.5% since going public.
As for Kimberly-Clark (NASDAQ: KMB), a staple in many households, it is undergoing transitional changes including divesting some business units. Yet, its dedication to maintaining its status as a Dividend King remains intact. In August, it announced a quarterly dividend of $1.26 per share, continuing its long-standing track record of annual increases.
With a P/E ratio of 16.6x, Kimberly-Clark may take some time to adapt expectations as it navigates this transformation, but its reliable dividends offer substantial income during the wait.
Before deciding on Verizon Communications, it’s essential to weigh various options available in the market, as some might present more promising prospects.
Our analysts have pinpointed several stocks that could yield impressive returns in the coming years—Verizon, however, is not among them.
