The top dividend stocks are cash-rich and secure – not volatile growth companies that are driving every penny into expansion or experimentation. Every bit of capital a company spends on acquirement and research, no matter how small, is money it can't return to investors in the form of dividends.
So, rather than chasing after hyped, faddish stocks or stocks with the highest dividend yields, investors planning for retirement should instead focus on low-risk dividend stocks that grow steadily over time. Examine the dividend stocks using the following metrics:
- A company's track record for dividend growth (raising dividends over time);
- The company's track record for profits and sufficient cash flows; and
- Constancy in any market environment.
The above three components are key to a portfolio built for low-risk, stable returns in the long-run. This is particularly important if someone is looking at their retirement years and prefers not to go through more unpredictable and trifling returns.
Here are a few of the top dividend stocks for retirement incomes that show stability, strong balance, and dividend growth…
Four Top Dividend Stocks for Retirement
Cisco Systems Inc. (Nasdaq: CSCO)
Cisco recently reported revenue that went beyond expectations, but still experienced a selloff due to consistent top-line difficulties that are blamed on weak enterprise spending.
However, dividend investing for retirement means hanging in there for the long-term – and Cisco remains a top dividend stock in terms of security and stability. Here's a look at its latest figures.
- Market Cap: $123 billion
- Present Dividend Yield: 2.9%
- Payment Ratio: 34% of estimated 2014 earnings
- Dividend Augmentation: 216% in four-years, from $0.06 per quarter in 2011, to $0.19 per quarter today
CSCO stock currently sits at $22.84 per share, and has gone up nearly 5% over the last month.
Diageo plc (NYSE: DEO)
Diageo is a worldwide liquor brand behind names like Smirnoff vodka and Captain Morgan rum. Due to the strong numbers market share in the United States and the growth of the spirits business in emerging markets, Diageo stock has maintained solid stock growth in the last few years.
The company has a reputable history of dividend increases in due course, thereby sharing its growth with investors.
- Market Cap: $77 Billion
- Present Dividend Yield: 2.5% according to the total 2013 payouts
- Payment Ratio: 48% of estimated 2014 revenue
- Dividend Augmentation: 73% in ten-years, from $1.67 paid in 2003 to $2.90 in 2013
DEO stock currently costs $122.43 per share. It's down 7.48% so far in 2014, which gives investors an opportunity to buy DEO shares at a discount.
Old Republic International Corp. (NYSE: ORI)
ORI is considered to be one the top dividend stocks worth pursuing for retirement investors. Though many regard Old Republic as an old-fashioned insurance company, it's actually a plus for investors looking for stability. Established in 1887, ORI has an extended history and a varied choice of products that lend the company impressive staying power. ORI has been munificent with its increases, with payouts doubling since 2003.
- Market Cap: $4 Billion
- Present Dividend Yield: 4.7%
- Payment Ratio: 45% based on FY2013 revenue
- Dividend Augmentation: 79% in ten-years, from $0.40 cents per share in 2003 to $0.72 in 2013
ORI stock currently sits at $16.45 per share and is up 28.69% since this time last year.
Huntsman Corp. (NYSE: HUN)
Huntsman is somewhat smaller than the other blue-chip dividend choices available; however, when compared to the other big companies in the chemicals industry, HUN is more attractive.
Following flat earnings in 2013, the outlook for 2014 shows a 6% growth in revenue. It may not be much, but it's more than many of the larger chemical giants. Additionally, Huntsman made some important expense reductions that will likely turn into a positive outcome, regardless of what the market does in 2014 and beyond.
- Market Cap: $5.5 Billion
- Present Dividend Yield: 2.2%
- Payment Ratio: 22% of secured 2014 earnings
- Dividend Augmentation: 150% in seven-years, from 20 cents per-share in 2007 to 50-cents in 2013
HUN stock costs $25.19 per share at present. Its stock value has grown 42.11% since this time last year.