In November 2019, the S&P Dow Jones Indices produced a piece that educated readers on how to invest in high-yield dividend stocks without losing their shirts. 

The article focused on the S&P High Yield Dividend Aristocrats Index. These are stocks from the S&P Composite 1500 Index that have increased their annual dividend payment for at least 20 consecutive years. In the piece, authors Wenli Bill Hao and Qing Li noted:

“The constituents in the S&P High Yield Dividend Aristocrats have long histories of increasing their dividends. All constituents are required to have a minimum of 20 years of dividend increases, and some have a dividend increase history of 50 years or more.”

Hao and Li found that the average yield of the index was 3.5% — using Dec. 31, 1999 to Dec. 31, 2018 — versus 1.8% for the S&P Composite 1500. Basically, the High Yield Dividend Aristocrats doubled the performance of the Composite 1500 over those 18 years. 

As such, I thought I’d take a look at the S&P High Yield Dividend Aristocrats’ constituents to see how many dividend stocks I could find trading under $25 at the time of this writing. However, I’ll also use stocks from the S&P Composite 1500 to add some diversity to the list.

So, without further ado, here are 10 great dividend stocks to buy:

• People’s United Financial (NASDAQ:PBCT)
• Old Republic International (NYSE:ORI)
• Amcor (NYSE:AMCR)
• South Jersey Industries (NYSE:SJI) 
• Telephone and Data Systems (NYSE:TDS)
• Hanesbrands (NYSE:HBI)
• KeyCorp (NYSE:KEY)
• NortonLifeLock (NASDAQ:NLOK)
• Kimco (NYSE:KIM)
• General Electric (NYSE:GE)

Dividend Stocks to Buy: People’s United Financial (PBCT)

People’s United Financial is the first of five dividend stocks I’ve been able to pull from the S&P High Yield Dividend Aristocrats Index. It’s currently trading at $17.67 as I write this, with a dividend yield of 4.03%. 

PBCT owns People’s United Bank, a regional bank with “more than $60 billion in assets” and over 400 locations in New York and New England. Based in Connecticut, its history dates back to 1842. 

I chose to include PBCT stock on this list despite the fact that M&T Bank (NYSE:MTB) has an offer on the table to buy the regional player. The all-stock offer values the bank at $7.6 billion. Its shareholders will receive 0.118 of a share of M&T common stock for each share of PBCT stock held. That values PBCT at roughly $18 per share. On Mar. 31, its shares traded for slightly less than that. However, the deal won’t be completed until the fourth quarter. So, I’d wait to see if you can buy it for less.  

MTB shareholders will own 72% of the combined entity with People’s shareholders owning the rest. The combined business will have “approximately $200 billion in assets” and 1,100 locations across 12 different states, making it one of the most pervasive banks in the Northeast. The company expects to generate “annual cost synergies of approximately $330 million.” 

Plus, M&T Bank currently yields a reasonable 2.86% itself. 

Old Republic International (ORI)

Next up on this list of dividend stocks, ORI stock is also from the S&P High Yield Dividend Aristocrats Index. It’s currently trading around $22 with a dividend yield of 3.95%. 

Old Republic provides specialized insurance products in the property-casualty and title insurance businesses. It’s been around for over 97 years, with more than 50 of them as a public company. A member of the Fortune 500, it has paid dividends for 79 years, with increased annual payouts for 39 consecutive years. 

Additionally, the company’s $7.3 billion in revenues are almost evenly split between Title Insurance (46%) and General Insurance (53%). The company also made an underwriting profit in 14 of the past 15 years. 

Finally, in early January, ORI also paid out a special dividend of $1 per share. It paid out the dividend because the company’s many insurance subsidiaries have all had several years of favorable results. No doubt, that kind of performance makes the stock promising.

Amcor (AMCR)

Amcor is the third of five dividend stocks from the S&P High Yield Dividend Aristocrats Index on this list. Right now, the stock is trading at $11.63 with a dividend yield of 4%. 

Founded in 1860, this Australian consumer-packaging company has operations in more than 40 countries worldwide, plus fiscal 2020 sales of $12.5 billion and earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.9 billion. In the first half of 2021, it has also grown earnings by 16% (Page 8). 

But that’s not all. Over the past decade, AMCR has increased its dividend by 6% compounded annually. It pays out approximately 45% to 50% of its cash flow for dividends (Page 21). 

The company’s clients include some of the world’s largest food, beverage and healthcare companies, including Unilever (NYSE:UL), Coca-Cola (NYSE:KO) and Johnson & Johnson (NYSE:JNJ). Geographically, it also generates 47% of its sales from North America, 24% from Western Europe, 26% from emerging markets and 3% from its home market of Australia and New Zealand. 

Using innovation and balanced capital allocation, AMCR stock can deliver between 10% to 15% annual returns for its shareholders. 

South Jersey Industries (SJI)

South Jersey Industries is my next pick of the dividend stocks from the S&P High Yield Dividend Aristocrats. It currently trades around $22.50 and yields 5.27%. 

The one thing you’ll notice about companies on this index is that many of them have long and storied histories. The same goes for South Jersey, which dates back to 1910 when the Atlantic City Gas and Water Company merged with the Atlantic City Gas Company. Later, in 1969, SJI became a holding company so that it could further diversify its businesses.

Today, the company delivers natural gas to more than 700,000 customers in its namesake state. At the same time, South Jersey Energy Solutions participates in non-regulated businesses such as renewable energy while SJI Midstream “houses the company’s interest in the PennEast Pipeline Project.”

In 2020, SJI had $163 million in earnings from its continuing operations, more than 58% higher than the prior year. In fact, all four of its major operating segments generated higher income in 2020.  

Finally, back in December, the company acquired a minority interest in REV LNG for $39.8 million. REV has become a big player in capturing, cleaning and converting bio-methane to renewable natural gas (RNG). As part of its investment, SJI acquired four “dairy farm projects” that produce RNG with the option to purchase an additional 21 farms. In total, the 25 projects have the capacity to produce 2.1 million MMBtu of RNG annually.

All in all, the decarbonization efforts behind SJI stock are worth paying attention to. 

Telephone and Data Systems (TDS)

The final constituent from the S&P High Yield Dividend Aristocrats Index on this dividend stocks list, Telephone and Data Systems currently trades around $22.70 and yields 3.08%. 

TDS provides wireless and wireline telecom services to more than 6 million customers through four operating segments: U.S. Cellular, TDS Telecom, OneNeck IT Solutions and Suttle-Straus, the last of which is an outlier. How so? Suttle-Straus provides printing services to some of the largest companies in the country.

In fiscal 2020, TDS had total revenue of $5.23 billion, just 1% higher than a year earlier. On the bottom line, it had a net income of $226 million, 87% higher than in 2019. 

Now, the company expects sales of at least $3.02 billion in 2021 from its US Cellular business with adjusted operating income before depreciation and amortization (OIBDA) of $875 million at the midpoint. Those are about the same as in 2020 (Page 2).

At its TDS Telecom subsidiary, its midpoint guidance in 2021 for sales and OIBDA is $1 billion and $305 million, respectively. These are also flat to 2020.

So, why invest in TDS stock?

In US Wireless, you’re getting one of the larger wireless carriers in the United States, while TDS Telecom provides telecom services to “more than 1.2 million connections” and 900 communities across the country.  

Hanesbrands (HBI)

Although the last five dividend stocks on this list were selected from the S&P Composite 1500 Index rather than the High Yield Dividend Aristocrats, that doesn’t mean they’re bad picks. Instead, they add some diversification to the group.

Of course, I don’t believe Hanesbrands needs any introduction. Currently, HBI stock is trading at $19.66 and yields 3%. Plus, HBI is already off to a strong start in 2021, up 35% year-to-date (YTD) through Mar. 31. Over the past one year, it has gained an impressive 144%. 

But that’s not the only thing this name has going for it. On Mar. 24, Hanesbrands’ Champion Athleticwear brand was named the 2021 official sideline apparel partner of The Premier Lacrosse League (PLL).

Of course, like for many companies, 2020 was tough for HBI. However, it finished the year strong. For example, revenues rose 2.8% to $1.8 billion in the fourth quarter while they were off just 4.3% for the full year. Meanwhile, adjusted operating profit for Q4 2020 was $212.7 million, 12% less than Q4 2019, while its full-year adjusted operating profit was $806.9 million, 6% less than in 2019.

On its Q4 2020 conference call, however, the company provided a positive outlook for the first quarter. Hanesbrands expects Q1 2021 sales to grow by 10% on a constant-currency basis. On the bottom line, it expects operating profits of $155 million at the midpoint, an operating margin of 10.3%.

CEO Stephen Bratspies also noted that HBI will lean on “innovative products” to grow its business in the quarters and years to come.

KeyCorp (KEY)

The second bank on this list of dividend stocks, KEY stock is currently trading around $20 and yielding 3.68%.

Recently, on Mar. 2, KEY acquired financial services analytics consultant AQN Strategies. As part of the acquisition, the company’s founder — Ben Sabloff — was named KeyCorp’s head of analytics. The move deepens the bank’s commitment to transforming into a digital-first, analytics-driven organization. 

What’s more, in 2020, Key had record revenue of $6.7 billion and a net income of $1.2 billion. The bank’s net income was lower in 2020 due to a $576 million increase in its provision for credit losses to $1.02 billion. But, as noted in its Q4 2020 press release, the company also originated an increase of more than $8 billion worth of loans through the first round of the Paycheck Protection Program (PPP) in 2020.

As part of its plan to return cash to shareholders, the company has also authorized a share repurchase plan of $900 million, in addition to its quarterly dividend. 

Right now, KEY stock is up 86% over the past one year and almost 22% YTD in 2021.

NortonLifeLock (NLOK)

Next up on this list of dividend stocks is NortonLifeLock. Currently, NLOK stock is trading at around $21.40 and yielding 2.37%. 

This company specializes in software products that protect against cyberattacks. One of its newest products, Norton 360 for Gamers, was launched globally in late January. It’s also a big reason why Fast Company included NLOK on its 2021 list of the world’s most innovative companies.  

With increased gaming in users of all age groups, NortonLifeLock’s new product is not something to ignore. Rather, it responds to a significant trend. The company’s press release stated:

“We created Norton 360 for Gamers as part of our vision to protect and empower people to live their digital lives. We want gamers to continue enjoying the gaming world, but with peace of mind that they have a Cyber Safety plan in place to help stay one step ahead of the cybercriminals.”

In the first nine months of fiscal 2021, Norton made $1.88 billion in revenue flat to 2020, with operating income of $630 million. That’s double the operating income seen in the first nine months of 2020. Now for the fourth quarter, the company expects sales to grow in the high-single digits with earnings of 38 cents at the midpoint. That would be an increase of 46% YOY, up from 26 cents in Q4 2020.

Kimco (KIM)

Kimco is currently trading at around $19 and yields 3.54%

This company is one of the largest retail real-estate owners in the United States, with 400 properties providing 70 million square feet of gross leasable area (GLA) (Page 3). On top of that, more than 300 of those properties have designated curbside-pickup spots and almost 60% of consumers say they will use curbside pick-up even after the pandemic.

Moreover, approximately 77.6% of its annual base rent (ABR) is from anchor grocery stores. This is why its occupancy rate of nearly 94% is so high. Covid-19 or not, people have to eat. 

One of the ways Kimco adds value is by redeveloping its properties. For example, it’s currently redeveloping 99 of its properties in projects worth almost $1 billion. As part of these developments, it also plans to build some 10,000 multi-family units by 2025.

Additionally, the company still owns shares in Albertsons (NYSE:ACI) worth more than $700 million.

The real estate investment trust’s largest tenant is TJX (NYSE:TJX), accounting for 4% of its ABR (Page 11). However, only 14 of Kimco’s tenants have ABR that makes up more than 1% overall. 

Altogether, this pick of the dividend stocks represents great financial strength. And as more people get vaccinated, you can expect Kimco’s business to get back to normal very quickly. That should continue to drive the price of KIM stock higher. 

General Electric (GE)

GE stock is currently trading around $13.20 and yields 0.3%. Now, you’re probably wondering why I’ve included GE on a list of great dividend stocks when it yields so little.

GE plans to sell its GE Capital Aviation Services (GECAS) to AerCap (NYSE:AER) for $24 billion in cash plus a 46% of the combined entity. Then it will move the remainder of GE Capital onto its balance sheet.

Despite the protests of GE bear Stephen Tusa of J.P. Morgan, who believes the company’s most recent restructuring and divestiture moves will make it seriously overleveraged, I agree with CEO Larry Culp’s evaluation of the situation.

Culp believes the deleveraging and de-risking of its balance sheet puts the company in a better position to focus on its other operating segments. As stated in the press release for the AerCap sale, the “deal marks GE’s transformation to a more focused, simpler, and stronger industrial company.”  

Of course, I haven’t been very enthusiastic about Culp’s GE makeover in the past. However, when he took over, the company looked like a dog’s breakfast. The latest moves suggest that GE is ready to return to its roots as an industrial conglomerate.

With that, you can be sure the dividend will return to pre-Culp levels. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.