Have you ever wondered which dividend paying stocks actually pay out the most money in cash dividends to their shareholders? We posed this same question in 2009, in our article, “The Top 5 Dividend Stocks for 2009”, a 3-part series, which identified the 5 firms who paid out the most cash to shareholders, and we explored various ways of investing in and profiting from these dividend stocks.
Four US firms made the top 5 list in 2009: AT&T, GE, Exxon, and Chevron.
In 2009, dividends were eliminated, or slashed by many venerable firms, due to the recession, particularly in the Financial sector, which formerly accounted for over 20% of 2008 dividends paid out in the S&P, but shrank to paying out less than 10% of the total in 2009.
According to Standard & Poor’s, the average dividend yield in the Telecom Sector has taken the biggest jump so far in 2010, rising from 5.53% in 2009 to 6.29% this year, while the Financial sector has continued its yield decline, from a 2008 average yield of 4.44%, down to 1.22% in 2009, and down again to 1.14% in 2010.
The Telecom sector has many firms listed in our High Dividend Stocks by Sector tables.
Here’s how the Sectors average dividend yields and overall contributions to the overall S&P 500 ranked as of 5/26/10:
|
INDUSTRY SECTOR |
SECTOR DIVIDEND CONTRIBUTION |
SECTOR DIVIDEND YIELD |
SECTOR DIVIDEND YIELD |
|
|
5/26/2010 |
(As of 5/26/2010) |
2009 |
|
Telecom Services |
8.58% |
6.29% |
5.53% |
|
Utilities |
8.04% |
4.75% |
4.26% |
|
Consumer Staples |
17.57% |
3.25% |
2.96% |
|
Health Care |
13.29% |
2.37% |
2.03% |
|
Energy |
12.00% |
2.35% |
2.05% |
|
Industrials |
11.47% |
2.28% |
2.26% |
|
Materials |
3.42% |
2.10% |
1.76% |
|
Consumer Discretionary |
7.74% |
1.53% |
1.44% |
|
Financials |
8.82% |
1.14% |
1.22% |
|
Information Technology |
9.08% |
1.02% |
0.89% |
|
S&P 500 |
100.00% |
2.10% |
1.95% |
(SOURCE: Standard & Poor’s)
So, did any of the same top 2009 dividend paying stocks make it to the top 5 for 2010?
As it turns out, 3 out of 4 of these firms are poised to pay out even larger amounts of cash dividends in 2010. As expected, GE, which cut its dividend in 2009 to $.10/quarter, from $.31/quarter, didn’t make the top 5 this year.
Here’s our list of the projected Top 5 U.S. Dividend Paying Stocks for 2010:
| 2010 Projected Payouts (in Billions$) | Total Projected Annual Dividend/Share | |
| AT &T (T) |
$9.92 |
$1.68 |
| Exxon (XOM) |
$8.27 |
$1.76 |
| Johnson & Johnson (JNJ) |
$7.93 |
$2.11 |
| Pfizer (PFE) |
$5.81 |
$0.72 |
| Chevron (CVX) |
$5.79 |
$2.88 |
We’ve also compiled a list of projected upcoming ex-dividend dates and quarterly payouts/share for these Top 5 dividend stocks.
| Projected Upcoming Dividend Dates | Projected Quarterly Dividend/Share | |
| AT &T (T) |
7/2/2010 |
$.42 |
| Exxon (XOM) |
8/11/2010 |
$.44 |
| Johnson & Johnson (JNJ) |
8/27/2010 |
$.54 |
| Pfizer (PFE) |
8/5/2010 |
$0.18 |
| Chevron (CVX) |
8/17/2010 |
$.72 |
A looming issue for dividend investors is the status of the qualified dividends tax rate, which is currently at 15% until the end of 2010. If Congress lets this tax rate simply expire, dividends could be taxed at the old 39.6% rate, which may very well inspire some dividend paying stocks to increase their payments in the fourth quarter, in order to still achieve the lower tax rate.
Disclosure: Author currently holds shares of XOM, T, and CVX.
Disclaimer: This article is written for informational purposes only.
Tags: (T), CVX, dividend paying stocks, dividend stocks, dividend yield, dividends, ex-dividend date, high dividend stocks, PFE, XOM
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