Forget SCHD: These Big Dividends Offer Higher Yields and Faster Growth
Investing in dividend-paying stocks has long been a popular strategy for generating reliable income. The S&P 500 High Dividend Yield Index (SCHD) is a widely followed benchmark for high dividend-yielding stocks. However, some investors may find that seeking out large dividends doesn’t necessarily mean sacrificing growth.
Big Dividends and Fast Growth: A Winning Combination
There are several large-cap companies that offer substantial dividends and impressive growth potential. Let’s examine a few:
Microsoft Corporation (MSFT)
- Dividend Yield: 1.5%
- 5-Year Annualized Growth Rate: 16.6%
- Total Return: 25.2% (as of 12/31/2021)
Microsoft, a technology giant, has increased its dividend for the past 16 consecutive years. The company has a strong balance sheet, a vast customer base, and a growing cloud business. Microsoft’s dividend yield may not be as high as some other stocks, but its growth potential is impressive.
Johnson & Johnson (JNJ)
- Dividend Yield: 2.4%
- 5-Year Annualized Growth Rate: 10.4%
- Total Return: 18.3% (as of 12/31/2021)
Johnson & Johnson, a healthcare conglomerate, is another dividend aristocrat, having increased its dividend for 59 consecutive years. The company’s diverse portfolio of products and services, as well as its global reach, make it a solid long-term investment. Johnson & Johnson’s dividend yield may be slightly higher than Microsoft’s, but its growth rate is still robust.
Visa Inc. (V)
- Dividend Yield: 0.8%
- 5-Year Annualized Growth Rate: 23.8%
- Total Return: 31.6% (as of 12/31/2021)
Visa, a leading global payments technology company, has increased its dividend for 13 consecutive years. The company’s extensive network and its focus on digital payments make it well-positioned for continued growth. Although Visa’s dividend yield is relatively low, its growth potential is significant.
Effects on Individuals
For individual investors, seeking out large dividends doesn’t mean sacrificing growth. Companies like Microsoft, Johnson & Johnson, and Visa offer substantial dividends and impressive growth potential. By investing in these stocks, individuals can generate reliable income while also benefiting from the potential for capital appreciation.
Effects on the World
The impact of these companies on the world is significant. Microsoft’s technology solutions drive innovation and productivity, while Johnson & Johnson’s healthcare products and services improve people’s lives. Visa’s digital payments technology makes transactions more convenient and secure. As these companies continue to grow, they contribute to economic growth and create jobs.
Conclusion
Forget the S&P 500 High Dividend Yield Index (SCHD) if you believe that dividend-paying stocks must sacrifice growth. Companies like Microsoft, Johnson & Johnson, and Visa offer substantial dividends and impressive growth potential. By investing in these stocks, individuals can generate reliable income while also benefiting from the potential for capital appreciation. These companies’ impact on the world extends beyond their financial performance, contributing to economic growth and improving people’s lives.
As always, it’s important to remember that investing involves risks, including possible loss of principal. Consult with a financial professional before making investment decisions.
