Top Dividend-Yielding Shares to Invest in with a $500 Budget at Present
Top Dividend-Yielding Shares to Invest in with a $500 Budget at Present
As an investor, your objective is to pick out superior stocks that will climb up over several years, but you don't necessarily have to wait long to reap the benefits. Including dividend stocks in your portfolio can provide you with frequent returns without much effort. Regardless of the market conditions or the performance of the specific stock, you'll still collect this passive income every year. This offers you an added advantage during good times and helps limit your losses during tough periods.
Numerous companies pay dividends, making it challenging to make a selection. A sound strategy is to look at the list of Dividend Kings, companies that have boosted their dividend payments for at least 50 consecutive years. This demonstrates their dedication to rewarding shareholders and suggests they are likely to continue this policy. Commencing your investment journey in Dividend Kings or even adding them to your portfolio is not only possible with a substantial sum but also with a modest investment like $500.
1. Johnson & Johnson
Johnson & Johnson (JNJ 0.12%) has upped its dividend payments for more than 6 decades and currently pays an annual dividend of $4.96 per share. This amounts to a dividend yield of approximately 3.3%, significantly surpassing the S&P 500 dividend yield of 1.3%. Moreover, the company's substantial free cash flow of over $19 billion indicates its potential to sustain and enhance the growth of dividend payments.
Moreover, J&J captivates for reasons beyond its dividend payments. This global titan is a leader in both pharmaceutical products and medical devices, gearing up for a new phase of growth with the recent separation of its lower-growth consumer health business. The move allows J&J to plunge its funds into its most promising areas, namely innovative medicine and medtech.
In the most recent quarter, J&J revealed sales growth of more than 6% for each of these segments on an operational basis. In innovative medicine, 11 leading brands chalked up double-digit revenue growth, and in medtech, J&J took the lead in four of the highest-growth cardiovascular intervention markets.
So, investing in J&J shares grants you the comfort of passive income while also offering you the opportunity to watch this new era of growth unfurl.
2. Abbott Laboratories
Abbott Laboratories (ABT 0.34%), like J&J, has escalated its dividend payments for more than 50 years, securing it a spot on the Dividend Kings list. The company offers a dividend of $2.20 per share, translating to a yield of 1.9%. Similar to J&J, Abbott's free cash flow level paves the way for it to maintain its upward dividend trajectory.
Balancing Abbott's appeal is its diversified health care business, comprising four distinct units: medical devices, diagnostics, nutrition, and established pharmaceuticals. This diversification reduces risk as one business may falter, but another can compensate. For instance, a recent decline in coronavirus testing has affected the diagnostics business. However, the medical device segment has fuelled total revenue growth for the company.
In the most recent quarter, Abbott reported a soaring 11% increase in medical device revenue, contributing to an overall revenue growth of about 5% to over $10 billion. Furthermore, Abbott has an extensive pipeline of upcoming product launches that can bolster future revenue streams.
Abbott has even forayed into wellness, recently releasing Lingo, a non-prescription, continuous glucose monitoring system, catering to those interested in monitoring blood sugar levels and improving nutrition.
Investing in Abbott shares means you'll gain access to a solid, diversified healthcare company and earn passive income.
3. Coca-Cola
Coca-Cola (KO -0.15%) is also in the 60-year-old club of companies that have recurrently increased their dividends. The company currently pays investors $1.94 per share, representing a dividend yield of about 3%. Similarly, like the previous two companies, Coca-Cola's substantial level of free cash flow -- at over $3 billion -- propels confidence in its ability to keep boosting dividend payments.
You probably don't need an introduction to Coca-Cola, given that you may have one of its products in your refrigerator, from the Coca-Cola beverage to Minute Maid juice and Dasani water. Over 200 brands are sold worldwide by this global titan of non-alcoholic beverages, with the company offering about 2.2 billion servings of Coca-Cola drinks daily in over 200 countries and territories.
Coca-Cola isn't restricted to its namesake drink. The company's broad portfolio has aided its growth over time. The water, sports, and tea categories contain 12 billion-dollar brands, with both new products and traditional sparkling beverages contributing to revenue and net income advancement. And this, combined with Coca-Cola's dividend record, makes this top beverage maker a shrewd addition to your dividend growth portfolio.
- Investing in Coca-Cola shares not only allows you to enjoy the popularity and wide reach of its iconic beverages but also provides you with a steady stream of dividend income, as the company has consistently increased its dividend payments for over 60 years.
- Given that Coca-Cola's free cash flow exceeds $3 billion, this substantial income provides the company with the financial stability to continue enhancing its dividend payments, making it an attractive option for investors seeking reliable income sources within their dividend growth portfolio.