One of the best ways for investors to make money investing is by looking for companies that pay regular dividends. This is one of the best ways for companies to pay investors back and it forces management to focus on cash flow, which is what investors like.
With the 10-year Treasury currently paying just 2%, dividends from solid companies that will be around for the long haul are a way for investors to make a better yield and potentially benefit from price appreciation. Here are five dividend stocks from rock-solid companies that yield more than Treasuries.
Intel Corporation (NASDAQ:INTC)
There is a lot of pessimism in the investment community over any company with ties to the PC. One of the poster children is Intel , the chip maker that has dominated the PC for decades but has struggled to get any meaningful share in the mobile space. Intel has been stagnant as the PC declines, but the market is treating the stock as if PCs will die tomorrow and Intel won’t ever be able to take meaningful share in the mobile space. I just don’t think either is the case and I believe there’s upside to go along with a great dividend.
Intel has $18.2 billion in cash, pays a lofty 4.3% dividend yield, and has a P/E ratio of just 10. As long as the PC doesn’t die tomorrow, investors should be getting a great dividend for years to come.
3M Co (NYSE:MMM)
Want a rock-solid dividend? How about a company that has paid a dividend for 96 consecutive years and has increased that dividend 55 years in a row? Let me offer up 3M Co (NYSE:MMM). The company makes everything from Post-it Notes to bandages, products many of us don’t think twice about purchasing on a regular basis. This creates a company so diversified that its dividend is safe even through disastrous economic and financial situations.
Right now, 3M yields 2.5% for investors, and if 55 years of dividend growth continues, it is likely to outyield the Treasury on a cost basis for shareholders for years to come. It may not be as safe as a Treasury, but it’s close.
Verizon Communications Inc. (NYSE:VZ)
Warren Buffett often talks about investing in companies with a competitive moat. There may not be a better moat than Verizon Communications Inc. (NYSE:VZ) subsidiary Verizon Wireless has in the U.S. mobile market. The company owns the spectrum to operate a wireless network, but even better is the capital cost it takes to put that spectrum to work. Verizon Wireless has spent billions of dollars building a 3G and now 4G wireless network to dominate the wireless space. It’s this superior network that creates an advantage over AT&T Inc. (NYSE:T) and Sprint Nextel Corporation (NYSE:S) that is nearly impossible to catch up with. Verizon has staying power to attract customers and pricing power to charge those customers more money.