3 Stocks to Buy With Dividends Yielding More Than 3%

By Dan Caplinger Markets Fool.com

Dividend stocks are favorites for income investors because they not only pay cash to their shareholders but also often boost their payouts over time. But not all dividend stocks are the same. Below, you'll learn more about how Chevron (NYSE: CVX), VF Corp. (NYSE: VFC), and Universal Corp. (NYSE: UVV) have achieved dividend yields of 3% or more and have developed long-term track records of success in increasing payouts over time.

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Image source: Chevron.

Chevron looks more energetic

Chevron has been a strong dividend stock for decades. The oil giant has a current yield of 3.7%, and it has boosted the amount it has paid in dividends each year for 29 straight years. That puts Chevron among the elite ranks of Dividend Aristocrats.

What's particularly impressive about Chevron is that it has managed to navigate ups and downs in the energy sector while still making consistent progress in increasing the dividend income that shareholders receive. The company's most recent dividend increase was modest, with just a $0.01 increase to $1.08 per share in November. Yet when you consider that oil prices have fallen from triple-digits as recently as 2014 to below $30 per barrel earlier this year before rebounding slightly, just producing any increase in dividend at all shows Chevron's commitment to shareholders. If energy keeps rebounding from its two-year slump, then dividend investors could see Chevron return to its faster pace of dividend growth in the future.

VF warms up for the winter

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Apparel specialist VF Corp. has a long track record of dividend strength as well. For 44 straight years, the company behind brands like Wrangler jeans, The North Face outdoor apparel, and Timberland boots has given shareholders annual increases in the dividends they receive. With a current yield of 3.1%, VF doesn't skimp on how much it pays its investors, and its most recent dividend increase earlier this month added nearly 14% to its previous quarterly payout.

VF has gone through some tough times lately, in large part because of poor conditions throughout the retail industry. But those difficulties haven't held back its willingness to share the wealth with shareholders through higher dividends. Moreover, as conditions begin to improve, the power of VF's key brands should only improve performance going forward. Given that the stock is among the relatively few that have lost ground in 2016, now might be an ideal time to take a closer look at VF.

Universal smokes higher

Finally, Universal Corp. is another company whose name doesn't have a huge amount of recognition. The company specializes in procuring and processing leaf tobacco, supplying major global companies like British American Tobacco and Philip Morris International with the raw tobacco they need to produce their lines of cigarettes. Universal has more than 24,000 permanent and seasonal workers, with operations in more than 30 countries on five continents.

Universal has been a good steward of capital for shareholders. For 46 straight years, the company has increased its dividend, including its latest announcement to take effect in January. Yielding 3.5%, Universal has seen its stock climb dramatically over the past year, with the tobacco company reporting stronger sales and reduced overhead expenses that contributed to overall profit. Despite some near-term concerns about demand, Universal sees a stronger second half of its 2017 fiscal year and has high hopes for its long-term prospects.

Smart dividend investors always pay attention to how much a stock yields, but that's only a starting point. By also seeing how well companies have done at sharing their success with shareholders through higher payouts, you can identify stocks that will serve you well for the long run.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.