Are you tired of watching your hard-earned money just sit idly in your investment portfolio, not doing anything for you? As a teen investor, you may feel this way. Today we’ll learn about a way to still practice long term investing but also get some cash rewards while doing it. We’ll talk about what dividend stocks are, the benefits, and the top ten most popular dividend stocks in the United States.*
Key Points
- Dividend stocks are a type of investment that pays out a portion of a company's profits to shareholders in the form of dividends.
- Dividend stocks offer the potential for income generation, capital appreciation, and some level of protection against market volatility.
- Popular dividend stocks include Johnson & Johnson, Procter & Gamble, PepsiCo, Intel, McDonald's, Cisco Systems, IBM, Coca-Cola, and Walmart.
- It is important to do your own research and due diligence before investing in dividend stocks, including reviewing the company's financial statements and analyzing its growth prospects
Definition of Dividend Stocks
Dividend stocks are a type of investment that pays out a portion of a company's profits to shareholders in the form of dividends. These dividends can be paid on a regular basis, such as quarterly or annually, and are typically distributed in the form of cash or additional shares of stock. If you want to learn more about Dividends, you can explore Bloom's online deep dive here for free.
Benefits of Dividend Stocks for Teen Investors
One of the main benefits of dividend stocks is that they provide a source of income for investors. This can be particularly attractive for investors who are looking for a steady stream of income from their portfolio, as well as those who are in retirement or nearing retirement and are seeking income-generating investments.
Income Generation
In addition to providing a source of income, dividend stocks can also offer the potential for capital appreciation. While the focus is often on the dividends that a stock pays, it is important to remember that dividend stocks are also stocks, which means that they can increase in value over time. This means that, in addition to receiving regular dividends, investors in dividend stocks may also see the value of their investments increase as the company grows and becomes more profitable.
Capital appreciation potential
Finally, dividend stocks may also offer some level of protection against volatility in the stock market. Since dividends provide a regular source of income, they can help to smooth out the ups and downs of the market, providing a cushion for investors during times of market turbulence.
Popular dividend stocks
It is important to note that the popularity of a dividend stock does not necessarily indicate that it is a good investment. As with any investment, it is important to do your own research and due diligence before making a decision. This may include reviewing the company's financial statements, analyzing its growth prospects, and considering its dividend history.
1) Johnson & Johnson (JNJ)
Johnson & Johnson is a multinational corporation that was founded in 1886. It is a healthcare company that produces a wide range of products, including over-the-counter and prescription drugs, medical devices, and consumer healthcare products. Some examples of Johnson & Johnson products include Tylenol, Band-Aid, and Neutrogena. The company has a market capitalization of around $450 billion and has a long history of paying dividends to its shareholders.
2) Procter & Gamble (PG)
Procter & Gamble is a consumer goods company that was founded in 1837. It produces a wide range of products, including household cleaners, personal care products, and over-the-counter healthcare products. Some examples of Procter & Gamble products include Tide laundry detergent, Crest toothpaste, and Pampers diapers. The company has a market capitalization of around $300 billion and has a long history of paying dividends to its shareholders.
3) PepsiCo (PEP)
PepsiCo is a multinational food and beverage company that was founded in 1898. It produces a wide range of products, including snacks, beverages, and other food products. Some examples of PepsiCo products include Lay's potato chips, Mountain Dew, and Tropicana orange juice. The company has a market capitalization of around $200 billion and has a long history of paying dividends to its shareholders.
4) Intel (INTC)
Intel is a technology company that was founded in 1968. It is a leading manufacturer of computer processors and other computer hardware. The company has a market capitalization of around $230 billion and has a long history of paying dividends to its shareholders.
5) McDonald's (MCD)
McDonald's is a fast food company that was founded in 1940. It operates more than 38,000 restaurants in over 100 countries around the world. The company has a market capitalization of around $200 billion and has a long history of paying dividends to its shareholders.
6) Cisco Systems (CSCO)
Cisco Systems is a technology company that was founded in 1984. It produces a wide range of networking and communication products and services. The company has a market capitalization of around $200 billion and has a long history of paying dividends to its shareholders.
7) IBM (IBM)
IBM is a technology company that was founded in 1911. It produces a wide range of products and services, including computer hardware, software, and consulting services. The company has a market capitalization of around $150 billion and has a long history of paying dividends to its shareholders.
8) Coca-Cola (KO)
Coca-Cola is a multinational beverage company that was founded in 1886. It is best known for its eponymous soft drink, but also produces a wide range of other beverages, including juices, teas, and sports drinks. The company has a market capitalization of around $230 billion and has a long history of paying dividends to its shareholders.
9) Cisco Systems (CISC)
Cisco Systems is a technology company that was founded in 1984. It produces a wide range of networking and communication products and services. The company has a market capitalization of around $200 billion and has a long history of paying dividends to its shareholders.
10) Walmart (WMT)
Walmart is a multinational retail company that was founded in 1962. It operates a chain of discount department stores and warehouse stores. The company has a market capitalization of around $400 billion and has a long history of paying dividends to its shareholders.
Conclusion
Dividend stocks can be a valuable addition to any investment portfolio. They offer the potential for income generation, capital appreciation, and some level of protection against market volatility. While there are many popular dividend stocks to choose from, it is important to do your own research and due diligence before making any investment decisions.
This may include reviewing the company's financial statements, analyzing its growth prospects, and considering its dividend history. By carefully selecting dividend stocks and building a diverse portfolio, investors can potentially maximize their returns and achieve their financial goals.
*This material is not intended as investment advice and is not meant to suggest that any securities are suitable investments for any particular investor. Investment advice is only provided to Bloom clients. All investments are subject to risk and may lose value.
