Investing in dividend stocks can be a great way to grow a retirement account. Compounding interest and reinvesting dividends into strong, financially secure companies can lead to an extensive and comprehensive investment portfolio around retirement if investors start dividend investing as early as possible. Every year of investing, especially at a young age, can lead to significant growth in an investment account.
The most important thing to pay attention to when it comes to investing for dividends is not chasing high dividend yield because some companies with outrageously high dividend payments to investors are not sustainable if the company is giving too much of their income to investors that can spell disaster for the said company over time. It is best to look for decent dividend yields, anywhere from 2-6%, provided by companies with a long track record of dividend increases, such as the ones I mention below.
Realty Income (O)
Realty Income (NYSE:O) The real estate investment trust is a member of the S&P 500 Dividend Aristocrats Index. This index includes companies that have increased their dividend payments for at least 25 years consecutively. The company distributes its next dividend on November 15 at $0.26 per share.
It has a substantial real estate portfolio of primarily service-based retail locations. Their portfolio consists of convenience stores such as 7-Eleven (OTCMKTS:SVNDY). Drug stores like Walgreens (NASDAQ:WBA) and CVS Pharmacy (NYSE:CVS). Chain retailers such as Walmart (NYSE:WMT) and Tractor Supply (NASDAQ:TSCO). Realty Income also has a portion of its portfolio dedicated to retail locations in the United Kingdom, such as Tesco (OTCMKTS:TSCDY), Sainsbury’s (OTCMKTS:JSNSF), and B&Q (OTCMKTS:KGFHY).
Over the past year, the company has seen its share price fall by approximately 14%, resulting from the complex real estate environment from various factors, including higher interest rates. Their most recent earnings report for the second quarter of 2023 stated a 27% jump in overall revenue and net income that decreased by 12% year over year. They are set to release their third-quarter earnings report on November 7.
PepsiCo (NASDAQ:PEP) is a scale large-scale retail distributor and seller of beverages and snack food items. The brand names the company operates under are Propel, Ruffles, Quaker, Aquafina, Gatorade, Pepsi-Cola, Mountain Dew, Tostitos, Cheetos, Doritos, and Lays. Its products are distributed to convenience stores, grocery stores, drug stores, and similar retailers.
Over the past year, the company has fallen 7%, mainly due to the fears of a recession. With the company selling at a discount now, investors may want to take full advantage of their 3.16% annual dividend yield. The company has been growing for 50 years consecutively. Their last dividend payment was $1.27 per share for the second quarter of 2023.
Their third-quarter earnings report, released on October 10, stated a net income increase of 14% and total revenue growth of 7%.
Unum Group (UNM)
Unum Group (NYSE:UNM) is an insurance company based in Chattanooga, Tennessee. Unum Group provides individual, group, and corporate insurance policies in the U.S. and internationally. Some of their insurance products include short-term and long-term disability insurance, accidental death insurance, critical illness insurance, and various types of voluntary benefits.
Their last reported dividend for the third quarter of 2023 of $0.365 is payable to investors on November 17. Unum Group has increased its dividend for the previous 14 years consecutively. It has an annual dividend yield of roughly 3%.
Unum Group’s most recent earnings report, reported on August 1, stated a total revenue of approximately 2% and net income growth of 7%.
Unum Group has seen its share price increase by 21% year-to-date, mainly due to its expected strong financial future and growing interest in cloud-based technology.
As of this writing, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.