One of the best ways to build passive income is with dividend stocks.
There is nothing like collecting a monthly or quarterly dividend check along with stock appreciation.
In fact, find a stable company with a stable dividend, and you can build stable wealth. Even better, companies that have consistently paid dividends are proven long-term winners.
It can be a win-win situation for your portfolio.
For example, 3M (MMM) has raised its dividend for the last 63 years.
But be careful. There are a lot of overvalued dividend stocks out there.
Here are 3 top dividend stocks with a history of solid dividends and growth.
Dividend Stock No. 1 – Microsoft (NASDAQ: MSFT)
Microsoft just increased its dividend by about 10.7% to 62 cents a share, or $2.48 annualized. It’s payable on December 9. 2021 to shareholders of record on November 17, 2021. In addition, the company approved a new $60 billion buyback program.
There’s even more to like technically and fundamentally here.
Technically, the MSFT stock is oversold. After pulling back from double top resistance around $306, the stock pulled back to about $281.29, where it became wildly oversold on key momentum indicators, including relative strength (RSI), MACD, and Williams’ %R. The stock is now back to $296, and could retest prior highs of $306 again, near-term.
Fundamentally, we’re talking about one of the biggest tech companies in the world. In its most recent quarter, revenue soared 21% to $46.2 billion. Operating income jumped 42% to $19.1 billion. Net income was up 47% to $16.5 billion, as diluted EPS increased 49% to $2.17.
Dividend Stock No. 2 – Texas Instruments (NASDAQ: TXN)
Since early 2020, Texas Instruments exploded from a low of about $90 to $196.71. If it can break from multi-month consolidation, the TXN stock could soar well above $200.
Helping, the company increased its dividend 13% from $1.02. to $1.15, or $4.60 annualized. It’s payable November 15, 2021, to shareholders of record as of November 1, 2021.
In addition, in its most recent earnings report, revenue soared 41% from $3.23 billion to $4.58 billion. Operating profits were up 80% from $1.228 billion to $2.213 billion. Net income soared 30% from $1.38 billion to $1.93 billion, as EPS jumped 39% from $1.43 to $2.05.
“TI’s third-quarter outlook is for revenue in the range of $4.40 billion to $4.76 billion and earnings per share between $1.87 and $2.13. We continue to expect our 2021 annual operating tax rate to be about 14%,” as noted in a company press release.
With TXN, investors are being offered solid growth, with growing yield.
Dividend Stock No. 3 – Lumen Technologies (NYSE: LUMN)
At the moment, a telecommunications company, Lumen Technologies pays a dividend yield of 25 cents a quarter, or $1 annualized. In its most recent earnings report, net income grew from $377 million to $506 million year over year. Diluted EPS grew from 35 cents to 46 cents year over year. It also generated Free Cash Flow (FCF) of $1.044 billion, as compared to $772 million, year over year. The company also approved a $1 billion stock buyback program.
“Lumen delivered solid Adjusted EBITDA and Free Cash Flow in the second quarter, and we are executing on our strategy to optimize the Lumen asset portfolio, positioning the company for future growth,” said Jeff Storey, president and CEO, as quoted in a company press release. “We are well-positioned strategically with our significant and accelerating fiber investments across both Business and Mass Markets.”
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