3 Top Dividend Stocks Yielding More Than 3% That You Shouldn’t Hesitate to Buy Right Now

With the S&P 500 once again moving upward in a bullish trend, the dividend return on this comprehensive market index is decreasing. It has dropped to approximately 1.2%, which is nearing its historic low that was last reached a full 25 years ago. Given this, it’s not surprising to find that many stocks are offering unattractive dividend yields at the moment.

Despite some existing choices being appealing for income-focused investors, there are still enticing options on the table. Companies like ExxonMobil (XOM -0.51%), Essex Property Trust (ESS 2.02%), and Johnson & Johnson (JNJ 6.21%) currently offer dividend yields above 3%. Given their strong histories of paying dividends, income investors might find it worthwhile to acquire their shares at the present moment.

The best in the oil patch by far

ExxonMobil structured its company to handle the fluctuations in the oil industry more effectively than its competitors, as demonstrated by its unwavering dividend policy. This consistency speaks volumes about its ability to weather adversity. Remarkably, this oil behemoth has boosted its dividends for 42 consecutive years – a feat that not only surpasses other oil companies but is also shared by merely 4% of all firms in the S&P 500.

Over the decades, two key elements have propelled Exxon’s steadily increasing and robust dividend. Initially, Exxon has an all-encompassing business structure, centered around assets that provide a competitive edge – cost-effective, high-yield assets – which enable it to produce more stable income streams than its competitors. Furthermore, Exxon boasts an exceptionally strong financial foundation, with one of the lowest debt ratios among its peers. This financial strength allows it to borrow money during oil price downturns for continued growth expansion, and repay as prices rise again.

Exxon Mobil is well-positioned to maintain and potentially raise its dividends in the future due to its ample supply of fuel. Their strategic plan for 2030 aims to enhance their earnings by $20 billion and cash flow by $30 billion. They anticipate achieving this growth by investing in expanding their profitable assets and continuing to reduce unnecessary expenses. This projected earnings growth should allow Exxon Mobil to continue boosting its high-yielding dividends in the upcoming years.

A healthy dividend stock

Johnson & Johnson is financially robust, boasting an exceptional AAA credit rating, even surpassing the U.S. government’s. The corporation concluded Q1 with a minimal net debt of $13.5 billion, while holding $52.3 billion in debt against $38.8 billion in cash and liquid assets. This is relatively small for a company valued at $380 billion on the stock market that generated approximately $20 billion in free cash flow last year, comfortably covering its $11.8 billion dividend payments.

The financial strength of the company has enabled it to consistently boost its dividend payments. Notably, Johnson & Johnson has increased its dividend for an impressive 63 consecutive years, making it one of the esteemed Dividend Kings – a category reserved for companies that have managed to raise their dividends for 50 or more years consecutively.

Johnson & Johnson’s financial might allows it to pour substantial resources into expanding its operations. In the past year alone, it allocated an impressive $17 billion towards research and development, maintaining its position as a leading investor in this field across various industries. Furthermore, it finalized over $30 billion worth of merger and acquisition deals last year. These investments set Johnson & Johnson on a trajectory for growth, allowing it to continue raising its 3.3% dividend payout.

A top-tier landlord

One of the nation’s biggest apartment proprietors is Essex Property Trust. This Real Estate Investment Trust (REIT) concentrates exclusively on West Coast areas such as Los Angeles, San Diego, San Francisco, and Seattle. The real estate holdings of this trust capitalize on the robust and expanding need for rental housing in these thriving housing markets.

For over three decades, the Real Estate Investment Trust (REIT) has consistently boosted its dividends, establishing one of the longest expansion records within the industry. Specifically, Essex Property Trust, since its debut on the stock market in 1994, has amplified its payout by a whopping 516%. Presently, the REIT’s dividend offers a return of 3.6%.

Essex Property Trust is well-positioned to keep raising its dividends due to robust housing demand on the West Coast. This sustained demand ensures high occupancy rates and rising rents for them. Additionally, the REIT boasts a robust investment-grade financial structure, providing it with the necessary flexibility to further grow its property portfolio. The company engages in several activities such as acquiring operational properties, funding development projects, investing capital for asset improvements, and offering loans to developers who often have the option to purchase the completed project. These investments coupled with rental growth strengthens Essex Property Trust’s capacity to maintain and boost its dividend payouts.

High-quality, high-yielding dividend stocks

These companies – ExxonMobil, Johnson & Johnson, and Essex Property Trust – boast impressive track records for providing dividends. Given their current yields surpassing 3% and the likelihood of further growth, these are dividend-paying stocks that you can confidently invest in at this moment.

2025-07-17 01:31

The best in the oil patch by far

A healthy dividend stock

A top-tier landlord

High-quality, high-yielding dividend stocks

Read More