Investing in stocks that pay high dividend yields has been a solid investment strategy for a long time. However, during the coronavirus pandemic, many companies have slashed their dividend payments in favor of hoarding cash.
Dividend investing during the coronavirus pandemic is still possible. So, which stocks pay the highest dividend in 2020?
What is a dividend?
To encourage shareholders to hold onto their stocks, many companies pay shareholders a dividend. This is a way for companies to share revenue. Dividends are usually paid in cash once a quarter.
Dividends are paid per share of stock. If you own ten shares in a company that pays a $1 annual dividend, you would receive $10 in dividend payments for one year. Fractional shareowners are also entitled to dividend payments.
Dividend payments are usually given out in cash and deposited into your brokerage account. The money can be used to invest in more stocks. As a result, many investors like to buy shares with high dividend yields. Your stocks go up in value with the market and they also provide an annual income that can be reinvested.
Which stocks pay the highest dividend?
As mentioned previously, many companies have slashed their dividend payments due to economic uncertainty amid the coronavirus pandemic. Companies like Walt Disney and Southwest Airlines, staples in dividend portfolios in the past, have temporarily suspended their dividend programs.
However, some companies are faring far better amid the COVID-19 pandemic. They have increased their dividend payments to investors. Nerdwallet, a money management app, recently compiled a list of stocks with the highest dividend yields amid the coronavirus pandemic.
NHI | National Health Investors Inc. (REIT) | $1.10 | 7.36 percent
BNS | The Bank of Nova Scotia | $0.90 | 6.29 percent
BCE | BCE Inc. | $0.83 | 5.76 percent
CVX | Chevron Corp. | $1.29 | 5.69 percent
BMO | Bank of Montreal | $1.06 | 5.59 percent
TRP | TC Energy Corp. | $0.81 | 5.46 percent
PFG | Principal Financial Group Inc. | $0.56 | 5.31 percent
TD | The Toronto-Dominion Bank | $0.79 | 5.13 percent
STX | Seagate Technology Plc. | $0.65 | 5.00 percent
OMC | Omnicom Group Inc. | $0.65 | 4.88 percent
RY | Royal Bank of Canada | $1.08 | 4.67 percent
DUK | Duke Energy Corp. | $0.95 | 4.60 percent
ALE | ALLETE Inc. | $0.62 | 4.53 percent
NKSH | National Bankshares Inc. | $0.67 | 4.49 percent
NWE | NorthWestern Corp. | $0.60 | 4.40 percent
SLF | Sun Life Financial Inc. | $0.55 | 4.36 percent
BXP | Boston Properties Inc. (REIT) | $0.98 | 4.32 percent
BOH | Bank of Hawaii Corp. | $0.67 | 4.23 percent
MTB | M&T Bank Corp. | $1.10 | 3.96 percent
BKH | Black Hills Corp. | $0.54 | 3.93 percent
DTE | DTE Energy Co. | $1.01 | 3.90 percent
SR | Spire Inc. | $0.62 | 3.80 percent
WHR | Whirlpool Corp. | $1.20 | 3.78 percent
UPS | United Parcel Service Inc. | $1.01 | 3.75 percent
MMM | 3M Co. | $1.47 | 3.72 percent
Dividend investing can be difficult during times of economic downturn, but there are always opportunities out there. The fact that there are so many dividend investment opportunities during one of the harshest recessions in history highlights the possibilities.