Growth and Dividend Payouts: a Winning Combo
For investors, there might not be a better combination than long-term growth and earning a dividend payout along the way. Typically dividend-paying stocks do not offer much long-term capital growth aside from quarterly distributions. This is because as blue-chip stocks, much of the company’s rapid growth has already passed and this means it is settling in as a cash flow machine that enables it to pay dividends.
But so far in 2022, this bear market has provided a few opportunities for creating long-term gains and collecting a nice dividend yield as well. Here are my top two picks for growth and dividends in 2023.
Intel (NASDAQ: INTC)
Really? Intel? I know Intel hasn’t received much in the way of positive headlines this year and it seems to have fallen behind the likes of AMD (NASDAQ: AMD) and NVIDIA (NASDAQ: NVDA) in terms of investor sentiment. Truth be told, Intel’s stock is down by 49.4% for the year and has lagged all three major averages in terms of performance. But I think Intel is ready to turn a corner here and much of that has to do with its focus back on foundry and fabrication services.
Intel is determined to become the second-largest foundry in the world next to Taiwan Semiconductor Manufacturing Company ($127.89|-3.32%) (which by the way, was also a candidate for this list). Intel is bringing much of that chip production to America by way of a $20 billion chip plant project in Ohio. With chips being such a battleground industry between China and the US, Intel’s domestic production will likely put it in favour of the US government. Intel also pays the second-highest dividend yield in the Dow Jones right now at 5.42% on an annualized basis. Intel’s revenue could explode once the chip production facilities are completed, and if you buy at these levels, you’ll be collecting a nice dividend as you hold the stock.
Verizon (NYSE: VZ)
Okay, so Verizon is more of your traditional blue-chip stock. If you were to ask me at the beginning of the year if Verizon will provide much growth moving forward, I would have given you a firm no. But Verizon’s stock has severely underperformed this year with a nearly 30% loss in 2022. The company saw fewer new subscribers than rivals T-Mobile (NASDAQ: TMUS) and AT&T (NYSE: T) although Verizon remains the market leader in the United States
With the stock beaten down so much, it’s only a matter of time until Verizon recovers. The company is a cash-generating monster and is the industry leader in services we simply cannot live or function without. Finally, we all know about Verizon’s dividend. At 7.03% it is the highest dividend yield of the Dow 30. One problem with Verizon is that it took on a massive amount of debt and rising interest rates are putting a dent in the company’s margins. Still, Verizon isn’t going anywhere and I think at these price levels, the stock has some massive upside. It also doesn’t hurt to collect a massive dividend along the way.
Rate this article