A Portfolio of Dividend Stocks that Pay Dividends EVERY Day
What would you do with an extra 25, 50 or even $100 a day? What if you could count on that money every single day? I’m putting together a dividend income portfolio that does just that, spin off cash flow five days a week, every week of the year!
In this video, I’ll show you how this system works and reveal the 19 dividend stocks to buy. We’re talking dividend income every day, today on Let’s Talk Money!
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How to Create a Portfolio of Daily Dividend Stocks
Hey Bow Tie Nation, Joseph Hogue here with the Let’s Talk Money channel and the second video in our daily dividends portfolio. You out there in the nation know I love those dividends but you also know…I just don’t have the patience to wait for those dividends each quarter!
Love getting’ paid, don’t love waitin’ for it!
So we’re building a portfolio of dividend stocks that don’t make you wait. A dividend investing strategy that will put cash in your account every single day!
We can do this because most dividend stocks pay out on extremely consistent schedules. Investors love the certainty and dividend-paying companies try paying out in the same week, even the same day every three months. That means, with a little bit of strategy, we can fill our portfolio with income stocks that will time our payments for every day of the week.
Now, how this is going to work, is through these three videos, I’ll highlight those dividend income stocks that will be paying out in the next month. For example, today we’ll highlight 19 dividend stocks that will pay out in November, February, May and August. I’ll show you exactly how I found these stocks later in the video but here you can see that I analyzed almost 400 dividend stocks to find the perfect income portfolio for each and every month.
The goal here is going to be about 70 to 80 stocks that will generate a dividend income on every weekday of each month. And the best part, not only is this going to be a well-diversified portfolio producing constant dividends, I’ve picked the best dividend stocks with a yield of nearly 4%…that’s almost twice the average dividend yield on the market.
I’ll be putting this video and the other three into a playlist on the channel called Daily Dividend Income Portfolio, if you’re not part of the community yet, just tap that little subscribe button so you don’t miss a single episode!
My Daily Dividend Portfolio
Our first stock in the list, $145 billion energy powerhouse Chevron, ticker CVX, and its 6.7% dividend yield.
Nation, energy has been slammed this year with the price of oil kind of stagnating around that $40 per barrel level, down 30% since the beginning of the year. But millions of barrels a day in production is being taken off the market, from the production cut announced by OPEC and the shut-ins in the U.S. oil patch, I think we’ve reached a floor for prices.
Going forward, especially over the next two years, the billions in cuts to production spending will start coming through. You just don’t get an oil field back up and producing overnight, so we could very quickly go from a surplus to a deficit in oil supply and that’s going to push prices back up.
And I know a lot of you are worried about lower oil demand on electric vehicles but we’re still years away from peak demand, in fact Bank of America doesn’t think we’ll hit peak oil demand until 2030 and other firms put it later.
We’ll highlight a couple of other energy stocks here in the group but Nation I truly believe, if you buy just one energy stock for the rebound, I think it should be Chevron. The company has the lowest break-even production price of the eight majors. The blue dots here are the price of oil each company needs to break even in 2020 with the red dots the 2021 price needed. RDS and Total are close but Chevron is really the leader here in low-cost production and that’s going to mean it’s going to be the first to return to profitability once prices increase.
CVX will go ex-dividend later than the other stocks in our list, usually mid-November, February, may and August which means you’ll collect that dividend payment towards the end of those months.
Analysts have targets for Chevron around $99 per share which is a 27% return on the current price beyond that 6%-plus dividend yield.
Next on our list is mid-cap life insurer Unum Group, ticker UNM, and a 6.3% dividend.
Financials are another group that have been hit hard in the pandemic but offer that value return as well as solid dividends. And you’ll see that in a lot of the stocks in our list. I tried to find the stocks that are not only going to put cash in your pocket every day but that will grow your portfolio as well.
For Unum, besides booking revenue growth that was slightly higher in the second quarter, shares are trading for a price-to-book value of just 0.35-times. That’s less than half the multiple it traded for last year, So you’ve got decent income fundamentals and a great value proposition with this one.
Unum also goes ex-dividend later in the list, late in October, January, April and July which means that dividend will go out around the second week of the next month. Remember, these dates you see here are the ex-dividend dates, so the first day the stock trades without that payment. To get these payments, you would have needed to buy the shares no later than the day before these.
I’ll go into how this works in a minute and show you the full list but for most of you, that ex-dividend date isn’t going to matter because these are buy-and-hold dividend stocks. You’ll continue to get that dividend for as long as you own the shares.
FirstEnergy, ticker FE, is one of the largest utility stocks in the U.S. with six million customers across six states and pays a 5.3% dividend.
I’m actually surprised utilities haven’t done better this year. With rock-bottom interest rates, the dividend yield on the sector is a great opportunity for cash-hungry investors and these are some of the most stable cash-flow companies you can find. This table shows how bad it’s been with stocks in the Utility sector down almost 7% so far this year, one of only five sectors in the red, and against a 5% gain on the broader market.
I like the opportunity here. You get an undervalued stock in a sector that is relatively immune from the economy that pays a 5%-plus dividend.
For its part, FirstEnergy has come under pressure lately on claims of illegal contributions to five Ohio politicians but the hearings and news don’t seem to be pointing to any legal liability on management’s part.
Basically, you’ve got a company with a strong utility and transmission business that is at least 20% undervalued and offers a great dividend while you wait.
This one goes ex-dividend during the first week of November, February, May and August and actually increased its payout this year.
Next in our dividend income list is Invesco Limited, ticker IVZ, the seventh largest asset manager in the U.S.
Now active asset managers, so those more focused on beating the market than just passive indexing, have had a tough time competing but Invesco’s $1.1 trillion in assets under management gives it the size to survive in a consolidating market.
The company closed its acquisition of Oppenheimer funds last year and the increased scale has added to profitability and cross-selling. It’s still booking a solid retention rate of clients above 75% and cash flows should support the higher dividend in a less certain economic environment.
Invesco did cut its dividend earlier this year but even on that $0.15 per share payout, you’re still collecting a 5.9% dividend yield and I think the payment gets back up to twenty- or thirty-cents a share next year.
Track your entire portfolio, see the gaps in your investments and compare two stocks instantly with my Portfolio Tracker spreadsheet.
Next is the largest real estate investment trust in the office market, Vornado Realty Trust, ticker VNO, and a 5.9% dividend.
Vornado has been hit hard this year, down 45% on the idea that everyone’s working from home now and won’t need office space. I think it’s an overreaction though. Take it from someone that has worked from home since 2013, sometimes you still want that office environment and most companies are still planning on having the majority of workers on-site.
Even Facebook, which in May said its employees could continue to work remotely, just signed a huge leasing deal with Vornado for 730,000 square foot office space in New York.
Vornado has a quality portfolio of real estate and I think you get at least a 25% upside in the share price along with that dividend.
The company cut its dividend only slightly last quarter, that December payment was a special dividend beyond its normal schedule, so still a strong payout for a good stock.
Next is one of my favorite regional banks, Citizens Financial, ticker CFG, and a 5.8% dividend yield.
We added Citizens to our 2020 dividend portfolio in August and it’s a strong value play in the space. The bank has doubled it’s loan loss provision account to $2.4 billion over the last two quarters and I think a lot of that gets moved back into earnings as loan defaults come in less than expected.
Shares of the regional bank trade for just 0.52-times book value of assets against a history of trading around a 0.8-times multiple so that represents about a 35% upside potential beyond the dividend.
Citizens is one of the few banks to increase its dividend this year so not only in that value sector of financials but also a best of breed in the group.
Another favorite long-term hold of mine, CVS Health, ticker CVS and its 3.5% dividend.
CVS has a lock on healthcare delivery and benefits from that in-store effect, selling higher margin items along with groceries. The company is front-and-center on the virus testing and could see a huge upside from the eventual vaccine administration. CVS beat expectations for earnings by 17% last quarter and this is a solid value play at just 1.14-times on a price to earnings growth basis, half of what it was late last year.
CVS has been building its healthcare dominance for more than a decade, adding pharmacy benefits manager Caremark in ’07 and insurance with Aetna in 2018. It basically has a hand in every step of healthcare delivery and can use that to squeeze out every penny of profit.
CVS hasn’t done a great job of growing its dividend payment but it’s been consistent and I think future cash flow can support a higher payout. Shares go ex-dividend usually around the 22nd or 23rd of October, January, April and July.
Shares of Caterpillar, ticker CAT, have lagged along with the other machinery stocks but I think it could be building to something.
Caterpillar is the largest construction and mining equipment producer in the world and while construction growth has held up, the mining segment has lagged hard since gold prices plunged in 2013. Now that gold is hitting all-time highs again though, we should start seeing a boom in capital spending by miners and top line sales for Caterpillar could jump higher.
The stock goes ex-dividend mid-month here so earlier than most on the list and pays a reliable 2.7% dividend yield.
A great sleeper-stock here, Kraft-Heinz, ticker KHC, and its 5% dividend yield.
Kraft finally came out with a serious strategic plan last month, selling its specialty cheese business for $3.2 billion and outlining how it’s going to leverage scale and cut costs. The sale will go a long way to reducing its $28 billion in debt, down over $2.7 billion in the last three years.
Five years have passed since the shares went public again, and as is typical with these private equity issues, we had a company that was so bloated with debt that it couldn’t do anything. We’re finally at a point where Kraft has some flexibility, is still a great value at just 1.5-times sales and strong cash flow to support the dividend.
Shares will go ex-dividend later next month and then again in March, May and August.
We added mall-operator Macerich, ticker MAC, to our dividend portfolio last month and its one of my favorite turnaround plays.
Macerich owns 29 class-A regional malls along with another 19 malls as part of a partnership and 12 non-mall properties. It’s a total of over 50 million leasable square feet and averages $800 in sales per square foot, which is well above the average for mall property and speaks to the quality of assets.
The company sold over $4 billion in lower quality malls over the last eight years so really went into this thing already positioned for quality. Occupancy is still over 91% though rent deferrals mean it will probably fall a little more over the next couple of quarters. Rent collection has improved from just 40% of rent due in April to over 66% in July, so definitely signs of some stability.
Macerich cut its dividend in April but then increased it again in August for an 8% yield and I think this one is at a point where cash flow will support it.
Another strong dividend stock in the energy sector here, Conoco Phillips, ticker COP, and a 5% yield.
Conoco has come out saying it can sustain the dividend and operations at $40 per barrel oil so if we are at a floor in prices, the company will have that cash flow to compete. That low-cost production is helping the company find the cash to invest in new fields when some of the higher-cost producers are struggling so we could see some surprising growth for Conoco over the next few years.
Conoco has managed to continuously increase its dividend even in that weak market for oil which really speaks to the quality of cash flow. Analysts have an average target price of $50 per share over the next year which would be a 42% return on top of that dividend.
Our next dividend income stock is Pentair, ticker PNR, a leader in water treatment with operations in 34 countries.
While the industrial side of the business took a hit last quarter, the company was able to surprise on the upside from strength in its residential pool segment, so this is a diversified business model that can perform in any economy. Between pool systems, filtration and flow technologies, the company books revenue from business, government and consumers.
It’s only a 1.7% dividend yield but the company has been consistent about increasing the payment since the 2018 spinoff and there’s some good value in the shares.
How to Pick the Best Dividend Stocks
We’ve got seven more dividend stocks to highlight and stick with me because these last two groups produce an average dividend yield of over 4%, more than twice the market yield.
I want to go through real quickly how I picked these stocks, how I put the portfolio together, so you can find your own dividend stocks or just adjust the portfolio when you need to.
Now the concept is easy but it took hours to put together the data on this. I took the 366 stocks in the S&P 500 that pay dividends, nearly 400 large-cap companies, I then went to the stock page for each one. You can find this on any investing platform but I went to Yahoo Finance and then to this Historical Data tab.
From here, I changed the time period and then to Show Dividends Only to see the dividend dates for the last five years. I took that and copied it into my spreadsheet for every single stock, noting the dividend dates over the last year.
Once I did that, I could note when each dividend stock paid out on each day and then could pick the best for our portfolio. For example, for today’s video, I 81 stocks going ex-dividend mid October and into November.
This allowed me not only to create an income portfolio that pays out nearly every weekday of the month but also to select only the strongest companies with the highest dividend yields.
This next one is our sole tech stock on the list with Oracle Corporation, ticker ORCL, and a 1.6% dividend yield.
Despite that fairly low yield, I really like the upside in Oracle. The deal for Tik Tok, whether they get it passed or not, shows the company isn’t afraid to innovate and explore new business areas. It’s already leading in that shift to cloud-based IT solutions and now this adds a consumer component to the business.
It’s one of the first to go ex-dividend on the list, right around the end of the first week in October, January, April and July.
Now if Oracle doesn’t end up doing the Tik Tok deal, there are some other options here you can choose from for an alternative around that time, here you see there are no dividend stocks going ex-dividend the same day, on the 9th but there are quite a few on the 8th we can choose from. I still like Oracle though, even without Tik Tok.
Another insurer here, in fact the largest life insurer in the U.S., MetLife, ticker MET, and a 4.9% dividend here.
The big weakness in insurance, as with most of the financials, has been those low interest rates. Insurers carry a huge amount of cash to pay premiums so they have to invest that in safe fixed income and other assets which really aren’t earning much of anything right now.
Insurers have been slowly expanding into other investments though like private equity and other higher-yield assets so that’s helping and there’s still a lot of value locked up in the shares.
Despite the low-rate environment, insurance is just a solid cash-flow business and MetLife consistently increases the payout here.
Consolidated Edison, ticker ED, is another good pick in utilities with a 4.1% yield and a great safety stock.
ConEd is primarily an electric and natural gas provider in New York and Jersey, producing some of the most stable earnings growth in the sector. The company recently pulled back on some investment spending which should support cash flow while still growing the business.
ConEd has increased its dividend for 46 consecutive years and although dividend growth has slowed to protect cash flow this year, the company is just a cash machine.
Four more dividend income stocks to highlight, then I’ll show you that entire list and the dividend dates you need to be watching.
Shares of Colgate-Palmolive, ticker CL, have done well this year on that safety play but still provide a 2.3% dividend.
Some of the companies on the list offer a little more upside for more risk but I also tried to include enough like Colgate for that safety and certainty. Like ConEd, this is pretty much the ultimate in cash flow reliability with a commanding lead in its brand segments. Colgate controls a third of the toothpaste market share, more than two-and-a-half times its largest competitor, and owns the #1 brand in a lot of its other consumer products.
Sales growth runs at around 5% a year and the company is continuously improving its cost structure to squeeze out more profits. The shares go ex-dividend later this month, around the third week of October, January, April and July.
Shares of Fastenal, ticker FAST, have surged 39% this year but I still like the 2.2% yield and upside.
The company distributes industrial and construction supplies with safety products really taking the shares higher this year. The sales growth we saw in the first and second quarter could slow a little from here but construction is still doing really well and I think industrial picks up the slack left behind from those mask sales.
Fastenal has a pristine balance sheet with only about $400 million in net debt which is extremely low for a $25 billion business. It regularly increases the dividend payment so I think you can be happy even if the current yield is a little lower.
Alliance Data Systems, ticker ADS, has been one of the hardest hit stocks on the list with shares down 65% this year.
Managing airline loyalty and mile programs is a big part of ADS’ business so you can imagine 2020 has been rough on business. Net income was down 74% in the second quarter and credit card services revenue fell 24% from last year. Still though, loyalty programs are a staple of the airlines and we’re a consumer society so I don’t see any existential risk in the credit services business either.
Earnings will probably remain weak for the rest of the year but should recover quickly in 2021 and the shares are extremely cheap. Analysts have price targets around $60 per share which is 27% higher than the current price. The company already made the hard decision to cut the dividend in May so I think cash flow is safe here.
Our highest dividend yield here with Kinder Morgan, ticker KMI at an 8.1% yield.
KMI is one of the largest pipeline operators in North America with 70,000 nat gas miles and 10,000 miles of oil pipeline. As tough as energy has been over the past few years, we’ll always need to move oil and gas through pipelines and there is a lot of value in these shares.
Case-in-point, besides the average $17.60 price target analysts have on the shares for a potential 32% return, the company’s co-founder keeps adding to his stake, buying more than 1.7 million shares this year for more than 11% of the company.
Despite that weakness in energy though, Kinder Morgan has been able to consistently increase its payout, now producing that 8% yield.
Here’s the entire list for this month, 19 stocks to pay out dividends over the next month plus Realty Income which we added last month. Remember, these dates you see, these are ex-dividend so you need to own the shares before this if you want to collect that payment. These stocks will generally pay out in November, January, April and July and you’ll get a dividend nearly every weekday.
We've still got one more video in our daily dividend portfolio series so make sure you join the community on Let's Talk Money and don't miss it. Check out that first video to see our first 20 stock picks.