In an ultra low interest rate environment, high dividend stocks seem like a better bet than 10-year bonds that only yield 2.4%. AT&T is and has been one of the largest telecom stocks in the world and currently yields 5.92%. The current quarterly dividend is $0.42 per share and 10 years ago it was $0.254 per share. AT&T managed to increase its quarterly dividend by more than 60% over the past decade. Even if we assume that they only increase their dividend by the rate of inflation, AT&T can still beat 10-year bonds if it doesn't decline by more than 5% per year. If AT&T trades above $14.18 in 2020, an investor would be better off investing in AT&T stock than in ten year treasury bonds.
Free insider trading data website Insider Monkey
compiled the list of 5 stocks insiders are buying with at least $5 billion in market cap and 4% dividend yield. These stocks should beat 10-year treasuries unless there are substantial declines in stock prices and significant dividend cuts. Here are the five high dividend stocks insiders are buying
1. Consolidated Edison Inc. (ED)
Several insiders are buying Consolidated Edison (ED)
as part of their company’s stock purchase plan. The stock currently distributes $0.595 quarterly dividend, and they have been increasing the dividend by $0.005 per year since 1996. If the same pattern holds over the next ten years, the dividend should be around $0.645 in 2020. The stock currently trades at $48 with a dividend yield of 4.96%.
2. Kimberly-Clark Corporation (KMB)
A director of the company, W Robert Dechert, recently purchased 1,000 shares of Kimberly-Clark at $64 per share
. The stock currently distributes $0.66 per share each quarter. The dividend has been consistently increasing from $0.27 in 2000 to $0.66 in 2010. The stock currently trades around $66 with a dividend yield of 4%.
3. Lockheed Martin Corporation (LMT)
A director of Lockheed Martin, Thomas J Falk, recently purchased 5,000 shares at $73.02 per share. The stock currently trades even below this price ($70) and yields 4.29%. The board announced to increase quarterly dividend by 19% from $0.63 to $0.75. Even though Lockheed Martin’s dividend increased from $0.11 per share in 2000 to $0.75 in 2010, it declined before 2000.
4. Philip Morris International, Inc. (PM)
Sergio Marchionne, a director of Philip Morris International, recently purchased 1,500 shares of PM
at $51.53 per share. The stock currently distributes $0.64 per share each quarter. The dividend has been consistently increasing since the stock’s debut in 2008. The stock currently trades at $57 and has a dividend yield of 4.5%.
5. SCANA Corp. (SCG)
The Chairman, President and CEO of Scana Corp, B. William Timmerman, purchased more than 29,000 shares
at around $39 per share. The stock currently distributes $0.475 quarterly dividend, which has been increasing from $0.288 per share in 2000. Scana (SCG) currently trades at slightly above $40 and has a dividend yield of 4.68%