Here are seven outstanding dividend stocks that stand out for attractive yields and solid fundamentals. They are ideal picks for a long-term investment strategy. Fundamentally, investing in long-term dividend stocks is a sharp approach to building a solid portfolio.
A portfolio that can counter market fluctuations and provide stable income over time. For instance, the first company has disciplined cost management and is making margin expansion efforts. The second company’s shift toward first-lien loans demonstrates a strategic move to increase portfolio security and stability. Similarly, the third one’s diversified investments across geographies and property types minimize risk and boost growth potential. These elements support stable cash flows and dividend payouts.
Moreover, the fourth company has sharp subscriber growth and market leadership. The fifth one has rapid expansion in its fiber business. The sixth company has a solid bottom line in new categories. Finally, the seventh company’s growth in the e-vapor market illustrates unique strategies and fundamentals that make these companies stand out. These companies hold the fundamentals that make for long-term dividend stocks: solid dividend yields, strategic growth initiatives, and diversified portfolios.
Pfizer (PFE)
Pfizer (NYSE:PFE), a biopharmaceutical leader, excels in cost management and margin expansion. The company’s stock yields a forward dividend yield of 5.7%. By the end of 2024, Pfizer hopes to have achieved at least $4 billion in net cost savings through its cost realignment initiative. Despite additional expenditures from the Seagen purchase, adjusted operating expenses climbed by a meager 1% in Q1 2024. Maintaining strict cost management raised profitability and solidified the bottom line. The company’s adjusted gross margin increased by 5.3% to 79.6% in the first quarter.
Moreover, in the first quarter, Pfizer returned $2.4 billion to shareholders via dividends and invested $2.5 billion in internal research. The company also paid down approximately $1.25 billion in maturing debt and monetized its Haleon stake, reducing its equity position from 32% to 23%. With a robust dividend strategy and considerable research investments, Pfizer is a top pick among long-term dividend stocks.
Oaktree Specialty Lending (OCSL)
Oaktree Specialty Lending (NASDAQ:OCSL) focuses on first-lien loans, enhancing portfolio security and stability. Its stock is attached to a dividend yield (forward) of 12.3%. The company’s shift toward first-lien loans is the core of its growth strategy. First-lien loans represent a senior position in the capital structure. They provide greater security and a higher claim on assets in liquidation. Oaktree Specialty’s first-lien investments have increased. They expanded from 71% of the portfolio in September 2022 to 81% currently (Q2 2024).
Further, Oaktree Specialty’s investment activity for the quarter includes $396 million in new commitments, reflecting a robust pipeline and active deal flow. The weighted average yield on new debt investments stood at 11.1%. This is relatively high, indicating the company’s ability to secure favorable terms in a competitive market. This yield, coupled with lender-friendly deal structures such as lower leverage and loan-to-values, enhances the potential for considerable returns on new investments.
Overall, Oaktree Specialty’s strategic investment approach and high-yield debt investments make it a high option on the long-term dividend stocks list.
Realty Income (O)
Realty Income (NYSE:O) is a monthly dividend company. It invests in diverse real estate assets across geographies and property types. Realty Income’s stock provides a 5.5% forward dividend yield. During Q1 2024, Realty Income invested $598 million across different regions. Notably, over half of this volume, approximately $323 million, was directed towards Europe and the U.K., achieving an initial weighted average cash yield of 8.2%. This international focus diversifies the company’s geographic exposure and capitalizes on higher yield opportunities outside the U.S. The $275 million invested in the U.S. during the quarter, at a 7.3% initial weighted average cash yield, indicates a strategic balance between domestic and international investments.
Additionally, the investments were distributed among three property types: retail, industrial, and data centers. This diversification within asset types leads to the spread of risk and captures demand across real estate sectors. In short, Realty Income’s high occupancy rate and strategic investments solidify its presence among long-term dividend stocks.
Verizon (VZ)
Verizon (NYSE:VZ) is a telecommunications giant with strong subscriber growth and a market lead. The company’s stock has a yield of 6.8% forward dividend. Verizon’s broadband business has grown considerably in fixed wireless access (FWA). In Q2 2024, the business added 391,000 broadband users, 378,000 of whom were fixed wireless users. This expansion results from Verizon’s growing customer base and solid position in the broadband industry.
Additionally, Verizon now has over 11.5 million broadband customers. This is a 17.2% yearly increase. The fixed wireless subscriber base had an annual growth of approximately 69%, reaching over 3.8 million users. Growing market penetration and strong demand are the main drivers of this revenue increase. The 69% annual boost in fixed wireless subscribers points to the progressive expansion of Verizon’s broadband services and its ability to capture market share in this segment.
In summary, Verizon’s focus on broadband expansion and sharp customer retention strategies support its presence on the long-term dividend stocks list.
AT&T (T)
AT&T (NYSE:T) focuses on its fiber business and rapidly expands its broadband coverage. Its stock is tagged with a forward dividend yield of 6%. The company brought in 252,000 AT&T Fiber subscribers in Q1 2024. The company maintained its mark of 17 consecutive quarters with net additions above 200,000. The total number of fiber locations reached 27.1 million, with the fiber subscriber base growing to nearly 8.6 million. Consumer broadband revenues increased by 7.7%, driven primarily by AT&T Fiber, which saw revenue growth of 19.5%. The average revenue per user (ARPU) for fiber was $68.61. This is up more than 4% annually. The growth in fiber ARPU, along with solid broadband revenue, increases. It indicates a sharp pricing strategy and high demand for fiber services.
Finally, customers with 5G and fiber services experience lower churn rates and higher lifetime values. This convergence leverages both technologies’ strengths to enhance customer retention and profitability. In short, AT&T’s integration of 5G and fiber services enhances customer retention and profitability, supporting its position among the top long-term dividend stocks.
British American Tobacco (BTI)
British American Tobacco (NYSE:BTI) is diversifying into new combustibles categories with impressive profitability. Its stock is attached to a dividend yield (forward) of 8.9%. British American’s consumer numbers reached 23.9 million, excluding 1.5 million consumers in Russia. There is an addition of over 3 million consumers annually, with 1.1 million in Q4 alone. This indicates strong market penetration and consumer retention.
Further, British American achieved profitability in its new categories two years ahead of its original target. This was accomplished while investing an additional £300 million in 2023 for growth. The contribution of the new categories improved from a peak loss of £1.1 billion in 2020 to a small profit in 2023. This reflects a £400 million improvement from last year. This rapid turnaround demonstrates effective strategic execution and strong market demand. In the top 10 new category markets, which generated about three-quarters of British American’s new category revenue in 2023, the contribution margin exceeded 20%. Overall, British America’s strategic U.S. combustibles business recovery and expanding consumer base mark its potential on the long-term dividend stocks list.
Altria (MO)
Altria (NYSE:MO) is expanding with the e-vapor business. The forward dividend yield on the company’s stock is 7.9%. Altria’s e-vapor division (NJOY) marks considerable strides and is positioned to grow. In Q1 2024, NJOY’s distribution hit over 80,000 locations. By 2024’s end, the company may have almost 100,000 outlets. This expansion is pivotal for increasing product visibility and accessibility.
Moreover, NJOY’s retail share in the U.S. multi-outlet and convenience channel grew to 4.3%, an increase of 0.6 share points sequentially. This growth is considerable considering the competitive level of the e-vapor market. NJOY’s share of consumables grew by 4.3% in Q1, with a notable increase in the retail share of devices to 11.5%. This is up 2.4 share points sequentially. This growth suggests strong consumer acceptance and trial of NJOY products. Additionally, a focused promotional strategy has proven effective, with considerable share gains observed during promotional periods. Finally, Altria’s strong retail presence and increasing market share mark its lead among the top long-term dividend stocks.
As of this writing, Yiannis Zourmpanos held long positions in PFE, OCSL, O, VZ, T and BTI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.