Top Dividend Paying Stocks That You Should Be Buying Right Now


High-quality stocks with sustainable dividends never go out of style for long term investors, and there is no scarcity of stocks with bright prospects and high yields this year, from pharmaceutical companies launching new drugs to telecommunications companies unlocking new technologies.

That doesn’t mean that these stocks will not slide if the market experiences times of turmoil later in 2019. All stocks are prone to risk. However, between their sizable dividends and near-term earnings potential, these 4 dividend-paying stocks are likely to deliver respectable dividends that will keep investors smiling.

AbbVie Inc. (NYSE: ABBV)

Although stocks of many pharmaceutical companies were in the red at the start of 2019 while the general market rallied, investors are now likely to buy them at a cheaper price and enjoy high dividend yields, provided the companies aren’t fundamentally broken. AbbVie is a big pharma stock that continues to offer attractive dividends.

Shares of the company dipped recently due to a 17.5% decline in Humira sales during the fourth quarter. Humira, a drug that accounted for 59% of AbbVie’s total revenues during the quarter, currently faces biosimilar challenge in Europe. But there is still plenty of long-term potential in the stock to be hyped about, considering that Humira continues to enjoy protection in the U.S up to early 2020.

The North Chicago, IL-based drugmaker is currently shelling a whopping $1.07 per share dividend with a yield of 5.31% that investors may want to take advantage of. Its current annualized dividend of $4.28 per share is up 19.2% year over year. AbbVie has raised its dividend 5 times in the past five years on a year-over-year basis for an average annual raise of 18.92%.

Honeywell International Inc. (NYSE: HON)

Honeywell has been making dividend payouts since 2002 and has increased dividends for 8 years thanks in part to strong free cash flow returns on invested capital. However, the company’s dividend growth froze in 2010 and from 2001 through 2004, but has never dropped since 1985. Honeywell 10-year dividend growth rate since 2003 stands at an impressive 4.9% despite the 5 years of freezes.

Honeywell is an industrial conglomerate that boasts strong fundamentals an annual dividend rate and yield of $3.28 and 2.3%, respectively. During the past three years, the company’s average dividends per share growth rate was 13.6% per year and 12.70% per year in the past 5 years. Honeywell pays dividends every quarter.

Arthur J Gallagher & Co. (NYSE: AJG)

Arthur J. Gallagher has raised its dividend payment every year for the past eight years. The insurance broker has raised its dividend by an average of 3.5% annually over the past 3 years. AJG pays its dividend quarterly and currently has a $1.64 annual cash dividend, representing a yield of 2.2%.

Arthur J. Gallagher’s dividend payout ratio stands at 47.7% meaning it is adequately covered by earnings. Analysts expect the Illinois-based company to post earnings of $3.89 per share next year. That means it should continue to be able to cover its annual cash dividend of $1.64 with an expected future payout ratio of approximately 42%.

Paychex, Inc. (NASDAQ: PAYX)

Paychex has been growing dividends for eight consecutive years, offering a $2.24 annual cash dividend and a yield of 3.2%. This human resources and insurance services provider pays dividend every quarter. Paychex dividend has grown at rate of 10% in the past three to five years.

Excluding reinvested dividends, Paychex stock has a 66% compound stock market return over the past five years, compared with 48% for the S&P 500 index. Paychex ratio of the total amount of dividends paid out to shareholders relative to the net income of the company is currently 87.84%.