There are countless ways for investors to make money on Wall Street, but few are as consistently successful as buying and holding high-quality dividend stocks. Based on a study by Hartford Funds, in collaboration with Ned Davis Research (“The Power of Dividends: Past, Present, and Future”), dividend stocks have more than doubled the annualized return of non-payers over more than half a century (1973-2024): 9.2% vs. 4.31%.
While it’s probably not a surprise that dividend stocks have a track record of outperforming, you might be shocked to learn that some of the biggest dividend payers on the planet aren’t necessarily the highest-yielding stocks. You can find higher yields than Microsoft (NASDAQ: MSFT), ExxonMobil (NYSE: XOM), and JPMorgan Chase (NYSE: JPM), but you’d struggle to find public companies with more generous dividend programs on a nominal-dollar basis than this trio.
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Collectively, seven of Wall Street’s most influential businesses are returning more than $114 billion annually to their shareholders through dividends.
Image source: Getty Images.
Even though Microsoft’s quarterly payout of $0.91 ($3.64/annually) equates to just a 0.9% yield, it’s on track to dole out more than $27 billion to its shareholders from dividends over the next year.
Microsoft’s ability to pay Wall Street’s largest nominal dividend reflects the duality of its operating model. On the one hand, it’s enjoying lightning-fast growth potential from cloud computing, its cloud infrastructure service platform, Azure, and the incorporation of artificial intelligence (AI) solutions into Azure and other platforms. AI has reaccelerated Azure’s growth rate to nearly 40% on a constant-currency basis.
But Microsoft is still generating exceptional operating cash flow from its legacy segments, such as Windows and Office. Even though Windows is no…
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