The year 2020 had set out to be a disastrous year for all financial institutions, especially the stock market. Yet, by some miracle, the stock market quickly recovered from the drastic adverse effects of the pandemic. In January 2021, the stock market got altogether more interesting with the whole Robinhood- Gamestop. Now, as we prepare for a new year ahead, the world is still reeling and recovering from 2020, and investors are trying to decide what stocks to invest in. To help you along, we have put together a list of the Top Dividend Stocks to Buy for 2021.
1. Johnson & Johnson (JNJ)
Pharmaceuticals and antiviral cleansers were a hit in 2020 for obvious reasons related to the pandemic. The company has been one of the best biotech stocks spearheading the efforts to produce a safe and effective COVID-19 vaccine. People often mistake Johnson and Johnson for just a pharmaceutical company, but it’s a lot more than that. The company has a giant, well-positioned presence in the healthcare-centric consumer goods market with an extensive range of products making it stand apart. Its two most famous products are Band-Aid and Tylenol.
The big pharma company declared their next quarterly dividend payout would be $1.01 per share. Considering the current share price- a $1.01 dividend would mean an annual dividend yield of 2.6%. Investors have favored Johnson & Johnson for a very long time, and it has enjoyed dividend growth at least once annually for some 57 straight years. The JNJ stock is one of the few S&P 500 companies to have been able to achieve such an impressive feat. The company recently declared its plan to have 100 million vaccines for Americans by the Spring of 2021. J&J had begun its phase 3 trials for its COVID-19 vaccine back in September. Just last week, the New England Journal of Medicine reported early trial results that some think look promising for the top biotech stock.
What separates J&J’s vaccine versus its industry peers like Pfizer (NYSE: PFE) and Moderna (NASDAQ: MRNA) is Johnson and Johson’s vaccine only requires a single dose. In contrast, the others currently require two doses. For these reasons, we’ve added JNJ stock to our list of the top dividend stocks to buy in 2021.
2. United Health Group Incorporated (UNH)
United Health Group Incorporated is one of the best health insurance companies. When deciding on which stock to invest in, make sure it’s a strong applicant for long-term dividend growth. Indicators of this are-
- One-month performance: +0.54%
- Historical big money signals
Below is a chart that shows the significant money signals made by UnitedHealth over the course of the past year.
It would help if you also looked at long-term growth thus far to ensure the stock has the fundamental support needed for continued growth. UnitedHealth has shown steady growth:
- Three-year dividend growth rate: +18.9%
- Forward yield: 1.44%
- Current dividend per share: $1.25
- Three-year earnings growth rate: +15.27%
3. Starbucks Corporation (SBUX)
Starbuck Corporation is a famous coffee chain. Starbucks’ is a strong contender in this list because of its solid dividend history. Recent performance analysis is essential when deciding on a contender for long-term dividend growth.
- One-month performance: -0.85%
- Recent big money signals
Once again, it would be best if you also looked at whether the company has the foundation required to support long-term growth-
- Current dividend per share: $0.45
- Three-year dividend growth rate: +17.9%
- Three-year earnings growth rate: -6.23%
- Forward yield: 1.74%
4. Texas Instruments Incorporated (TXN)
Since it declared dividends in April 1962, the semiconductor company has boasted growing dividends for the past 16 years in a row.
- Five-year return: 231%.
- Dividend amount: $4.08
- Dividend yield: 2.4%
- Dividend growth rate: 23%
- Dividend payout ratio: 70%
- Dividend stability factor: 3
- Earnings stability factor: 7
Here is some data on its recent positive performance-
- One-month performance: +7.09%
5. Broadcom Inc. (AVGO)
Broadcom is another American semiconductor company that has made it onto the list of top dividend stocks to buy for 2021. The company has experienced dividend growth for the past nine years in a row.
- Dividend growth rate (measured over the past five years): 75%
- Dividend amount: $14.40
- Dividend yield: 3.2%
- Dividend payout ratio: 211%
- Dividend stability factor: 16 (with 0 being most stable and 99 being the most unstable)
- Earnings stability factor: 6 (0 being the most stable and 99 being the most unstable)
6. PepsiCo (PEP)
Last on the list of top dividend stocks to buy for 2021, we have PepsiCo- the beverage and snack company. PepsiCo has diverse business segments and operates across the globe.
- PEP pays a 2.8% dividend.
- Current divided: $4.09
- Estimated Intrinsic Value: $122 (as of December 2020)
- PepsiCo 5-Year Dividend Growth Rate: 8.20% (As of Dec. 2020)
The stock market is dynamic and undergoes massive changes in the blip of time. So make sure to conduct proper research and analysis before investing in a company.