Dividend stocks give investors extra cash flow and can help them in retirement. However, most investors believe they have to make an uncomfortable trade-off with dividend stocks.
On one hand, you have stocks like Microsoft (NASDAQ:MSFT) that deliver exceptional returns but have low dividend yields. Most retirees can’t do much with the tech giant’s 0.81% dividend yield.
On the other hand, you have stocks like AT&T (NYSE:T) which has been a brutal disappointment for long-term investors. Although the company offers a 7% yield, the dividend is vulnerable. Furthermore, shares have dropped by more than 30% over the past five years. AT&T shares are trading for less now than they did in 1995.
If you want the perfect blend of respectable growth and high dividend yields, you have come to the right place. These three stock picks combine appreciation with steady cash flow.
Broadcom (NASDAQ:AVGO) is a top-tier dividend stock that checks many of the boxes dividend investors have. The dividend yield is a respectable 2% and a high growth rate can raise the yield in the future.
In 2023, Broadcom raised its dividend from $4.10 per share to $4.60 per share. That represents a 12.2% year-over-year (YoY) jump in the quarterly dividend per share distribution. The year before that, the dividend jumped by 13.9% YoY.
The semiconductor company’s dividend is still good and growing, and its appreciation is even better. Shares have more than quadrupled over the past five years. An artificial intelligence boom caused the stock to lift off in 2023. However, the company still experienced solid growth before AI took center stage.
Broadcom’s net profit margins regularly exceed 35% and have touched 40% in some quarters. The acquisition of VMware (NYSE:VMW) can fuel more gains in the future. Few dividend stocks offer the same yield, dividend growth and appreciation as Broadcom.
The digital communications technology company has experienced a renaissance in 2023. An emphasis on cybersecurity and cloud computing has helped the company generate impressive revenue and earnings growth.
Shares have only gained 15% over the past five years, but they are up by roughly 10% year-to-date. Cisco (NASDAQ:CSCO) trades at an attractive 17 P/E ratio and offers a 3% dividend yield. It won’t soar like most growth stocks, but Cisco offers growth at a reasonable price.
Although it’s not the most exciting stock, Cisco is a financially robust company. As of its latest financial report, the corporation had $43.3 billion in total current assets which is more than enough to cover the company’s $31.3 billion in total current liabilities.
Although the company can handle its current obligations, dividend growth isn’t exciting at the moment. The company raised its quarterly dividend from $0.38 per share to $0.39 per share. That’s a 2.6% YoY increase, which isn’t too impressive. The main selling points for the stock are its high yield and the potential for more stock price appreciation as Cisco embraces new technology.
Stag Industrial (STAG)
Stag Industrial (NYSE:STAG) is a real estate investment trust that focuses on storage facilities. Companies like Amazon (NASDAQ:AMZN) need warehouses to store inventory. That equates to steady paychecks for Stag Industrial to distribute to investors.
Shares have gained 35% over the past five years and are up by 10% year-to-date. Stag Industrial currently has a 4.28% dividend yield and makes monthly distributions. The income is relatively reliable since many of Stag Industrial’s clients will hold onto warehouse space even if the economy slows down. E-commerce companies and other corporations will always need buildings to store products.
Stag Industrial has properties in over 40 U.S. states. The vast portfolio and the importance of storage space can help the REIT endure economic slowdowns and reward long-term investors. The REIT regularly posts net profit margins above 25% and continues to make acquisitions for its shareholders.
Stag Industrial acquired 26 buildings in 2022 and invested $467.1 million in the process. The company has expanded its presence each year since 2011.
On this date of publication, Marc Guberti held long positions in AVGO and STAG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.