As inflation and spiraling interest rate hikes continue to dominate the discussions of most investors, the stock market continues to see bearish momentum build. Many investors are growing increasingly apprehensive about what next year may hold. Accordingly, many are choosing to add exposure to high-yielding dividend stocks over growth stocks, as uncertainty reigns supreme.
This makes sense, considering the latest macroeconomic developments. In my view, investors should consider allocating at least a portion of their portfolio to dividend stocks. These companies tend to serve as an excellent source of passive income, perfect for current retirees and investors looking towards eventual retirement. Additionally, dividend stocks provide excellent added stability to investors’ portfolios.
Now, given the current market scenario, one might question a company’s ability to deliver proper dividend payouts. However, there are a few businesses with solid fundamentals that would be perfect choices right now.
The three companies below have withstood tough times in the past, consistently delivering dividend payouts to their stakeholders. Furthermore, these firms have also increased their dividend payments continuously for at least 25 years. Investors looking for passive income should consider these three high-yielding dividend stocks for the long term.
V.F. Corporation (VFC)
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First on our list of high-yielding dividend stocks to buy is U.S.-based international footwear and apparel company V.F. Corporation (NYSE:VFC). Known for its North Face, Timberland, JanSport and Eastpak brands, this company’s market presence is significant. In fact, they dominate almost 55% of the country’s backpack market.
Now, investors might refrain from putting their money in businesses that deal in apparel. There are many reasons for this, but chief among the concerns are the fact that these companies’ profits tend to be tied to products that change as quickly as consumer tastes. That said, this company has a wide array of consumer brands under its belt, with significant customer loyalty. Thus, this is a company that I think is able to align its business model with ongoing consumer trends and reap profits.
For example, North Face sales have grown by 14% in the recent quarter, and 21% year-to-date. This sort of growth has propelled the company to announce the increase of its quarterly dividend of 51 cents. This is a rise of 2% from the previous year’s 50 cents, taking the current dividend yield to 7.1%. It will be available to investors on record from Dec. 20 on. Moreover, market experts expect V.F.’s earnings per share to increase in the coming year, making the company’s valuation more attractive.
Over the years, V.F. Corporation has shown a steady rise in its dividend payouts, with very little fluctuation. In 2012, the company’s annual payout stood at 72 cents, and from there, it increased to $2.00 per share most recently.
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Another company I’ve long considered to be among the best high-yielding dividend stocks to buy is Chevron (NYSE:CVX). This oil giant provides investors with a dividend yield of 3.02%. That’s great, but perhaps not as high-yielding as many would have liked to see.
That said, investors who bought Chevron stock during the depths of the pandemic saw the kind of yield CVX stock and others provided. Dealing in oil exploration, production and refining, the company’s business model has gone from demonized to viewed as essential in the span of a year.
Due to the war between Russia and Ukraine, there is a dearth in the supply of oil and natural gas in the market. This situation is making it more difficult for European countries to generate adequate power. Hence, stocks of energy companies like Chevron are trading in the market near their all-time high.
As of today, this corporation offers a dividend yield of 3.02%. Experts predict that these payouts will increase in the future thanks to the growing demand for energy and Chevron’s share buyback program. Moreover, this company’s return on capital employed is growing at a rapid pace. Currently, it stands at 17%, recording growth of 2,640% in the last 5 years.
In addition, Chevron Corporation has entered into an agreement with Pertamina Power Indonesia and Keppel Infrastructure (OTCMKTS:KPELY) to explore the development of ammonia and green hydrogen projects in Indonesia. This partnership can enable the corporation to deliver strong growth in the long run.
Exxon Mobil (XOM)
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Texas-based Exxon Mobil (NYSE:XOM) is another energy company I think long-term investors would do well to consider at these levels. Yes, Exxon Mobil has outperformed the market of late. But that’s for good reason.
Apart from manufacturing, transporting and selling petroleum products, Exxon is also involved in the manufacturing of synthetic rubber, plastic and other products. These will continue to be in high demand, regardless of where oil prices go in the near term. Owning the entire value stack allows Exxon to capture a significant portion of the value it creates, relative to many of its peers.
At the time of writing, the dividend yield of this company stands at 3.2%. Over the last 10 years, the company has increased its dividend from 47 cents per share to a current distribution of 91 cents per share. That’s some impressive growth for investors who have simply stuck with this name.
Additionally, recent developments around Exxon Mobil’s Coral South floating project in Mozambique have intrigued investors. This project has delivered $8 billion worth of liquefied natural gas (LNG) via its first cargo ship. This massive supply will help meet the rising global energy demand in the market and also expand Exxon’s international LNG business.
Moreover, this offshore project is estimated to generate 450 billion cubic meters of natural gas for transporting. With the Coral South offshore floating project’s help, Exxon plans on doubling its LNG supply by 2030.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.