Looking for income? Dividend stocks are a great place to find it. And the good news is that big payouts can be found throughout the stock market, regardless of industry or sector. Whether you're seeking high yields or secure payouts, or maybe even hoping for some price appreciation, you'll find what you're looking for among General Electric (NYSE: GE), Boeing (NYSE: BA), 3M (NYSE: MMM), Total SA (NYSE: TOT), and Williams Partners (NYSE: WPZ).
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Let's take a closer look at these five stocks that each reward shareholders with more than $2.5 billion in dividend payouts each year.
GE has been paying a dividend for more than a century while growing into one of the largest industrial conglomerates in the world. It's by far the largest company in terms of market cap on this list, at $210.2 billion, and naturally, pays a big annual dividend, for a massive total $8.8 billion in payouts. (The yield is currently 4%.)
It used to pay a lot more, though. In 2008, GE paid out more than $12 billion in annual dividends, but then the financial crisis hit and the company, which had invested heavily in its GE Capital consumer-credit arm, was hammered by the stock market, forcing then-CEO Jeff Immelt to cut the dividend by almost two-thirds.
Luckily for dividend investors, GE has now disposed of its GE Capital unit, and is refocusing on its industrial roots. But new CEO John Flannery has been focusing on cutting costs, which could mean cuts to the dividend. Flannery will provide an investor update on Nov. 13, and dividend investors should pay attention to what he says before jumping in.
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Boeing and 3M
|Market cap||$150.7 billion||$125.1 billion|
|Annual total dividend payout||$2.8 billion||$2.7 billion|
|Dividend yield (as of Sept. 28, 2017)||2.1%||
Airplane manufacturer Boeing and materials-science company 3M operate in very different industries, but their recent fortunes have been surprisingly similar. Not only are their total dividend payouts almost identical, but both have seen their stock prices soar in recent years. In the last five years, 3M's share price has risen 125.7%, while Boeing's has skyrocketed an astonishing 264%.
That price appreciation has wrought a bit of havoc on their dividend yields, leaving them just above 2%, but don't let that scare you. Boeing is incredibly profitable and churning out gobs of free cash flow. The Dividend Aristocrat 3M has been slowly and steadily growing its dividend -- and its business -- for years, making it an excellent bet for stability. Both are solid choices for income-focused investors.
Of course, no list of high-paying dividend stocks would be complete without an integrated oil major. But French company Total is one of the smaller of these -- with a market cap of $133.1 billion -- and only pays out about $2.6 billion in annual dividends. This is a drop in the bucket compared to, for example, rival ExxonMobil, which pays out a massive $12.5 billion annually.
Although it may be smaller than some of its integrated peers, Total has consistently been an outperformer. Its second-quarter earnings results were impressive, and the company is sitting on a massive cash hoard of $28.7 billion. Its current yield of 5.1% is also impressive, although investors should be aware that due to currency fluctuations, the payout in dollars tends to jump around from quarter to quarter. Total looks like a good choice for investors ready to buy into the energy industry.
While companies like GE, Boeing, and 3M are household names, you shouldn't be surprised if you've never heard of Williams Partners. With a market cap of $37.6 billion, the company is much smaller than any of the others on this list. But it still pays out $2.53 billion per year in dividends, just enough to be included here.
Williams Partners is a natural-gas pipeline operator, a master limited partnership controlled by parent Williams Companies (NYSE: WMB). Together, the companies claim to own the fastest-growing interstate pipeline system in the U.S. That growth is important, because almost all of Williams Partners' income -- 97% -- is fee-based, meaning the company collects a fee from each customer that uses Williams Partners' pipelines. That results in a steady income stream that grows as the company adds more pipelines.
Income investors should be aware that Williams Partners cut its quarterly dividend this year, from $0.85 per share to $0.60 per share. But with an impressive current yield of 7.5% and the company projecting solid growth of 5% to 7%, Williams Partners is definitely worth considering as an income investment.
As you can see, a company's total annual payout doesn't actually tell us much about the company. It could be a major company with a decent yield, like GE and Total; a major company with a lower yield like Boeing or 3M; or a smaller company with a big yield, like Williams Partners. That's why it's important for income investors to do the legwork and look into all aspects of a company they're considering investing in. But these five big-paying companies certainly deserve a place on your watch list.
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