Dividends, oh. That one word that makes broke millennials sit up and listen, like when
someone says “free Wi-Fi” or “forgiveness of student loans.”
Dividends are like an allowance for adults. You put money into certain stocks, and these
corporations, sometimes known as financial sugar daddies, pay you every three months for
being patient. It’s like getting a little “thank you” money for not selling everything when the
market goes down.
In short, it’s capitalism’s way of saying, “We love that you did nothing.”
Welcome if your dream job is to do nothing and yet get paid. Get your iced coffee, open your
Robinhood app, and get ready to meet the most charitable stocks on the market. And yes,
they are strangely more reliable than half of your exes.
Income that comes in without you doing anything, baby: What are dividends?
When people say they “live off passive income,” what they really mean is “I found a way to
get paid while scrolling through TikTok.”
A dividend is a tiny amount of a company’s profit that is given to shareholders, usually once
every three months. It’s like a “thank you” note from your company for not replacing them
with crypto or an NFT monkey JPEG.
But here’s the catch: you have to own these stocks to get your money. It’s not giving money
away; it’s sharing the profits with adults who are anxious.
There are two primary groups:
Dividend growers, or the overachievers, are corporations that enhance their dividends every
year, like outstanding pupils pleading for their teacher’s approval.
High dividend yielders, often known as the “chaotic risk-takers,” are corporations who pay
out a lot of money to stockholders while secretly starting fires behind the scenes.
And you? You’re about to choose the type of dysfunction you want to get rewarded for.
Spoiler: The ones that pay the most frequently hurt your feelings.
The MVPs: Dividends That Are So High They Will Make Your Savings Account Cry
Let’s get straight to the point: you want the big checks, not the money theory. Here’s the
news: the stocks that are currently paying out the biggest dividends in America’s crazy little
market:
AT&T (T): About 6–7% yield
Can you hear me now? This old telecom company is effectively paying people to maintain
thinking it’s still important. You’re not purchasing a stock that will go up in value; you’re
getting a rental property that sometimes forgets to maintain the grass but still sends you rent.
Verizon (VZ) has a yield of about 6%.
Another phone company, because talking to your folks still pays. Bored? For sure. Is it
reliable? Like a classic Toyota. It’s like a 401(k) for dividends: sluggish and boring, but it
works.
Altria (MO) – 8% return
Tobacco is the best way to convey “steady cash flow.” The product may kill individuals, but
the stock is still alive and giving out dividends like Oprah: “You get a dividend! You get a
dividend!”
Chevron (CVX) has a yield of about 4%.
Big Oil might be bad, but your portfolio’s electric bill won’t care. Chevron will gladly pay you
for every tank of gas America uses, as long as you can live with it.
Realty Income (O) – About 5% yield
They are called “The Monthly Dividend Company” since they pay every month. You like
Target? What about Walgreens? What about 7-Eleven? These people own the buildings. In a
way, you’re collecting rent from capitalism itself.
Each of these is like a sugar daddy for a business: dependable, rich, and never texting “wyd”
after midnight.
Dividend Yields: Numbers That No One Asked For But You Pretend to Get
Okay, let’s act like grown-ups for a minute. You know what “dividend yield” means, but you
were also Googling it at the same time.
This is what you need to know:
To find the dividend yield, divide the annual dividend per share by the price per share and
then multiply by 100%.
If a stock is trading at $100 and pays a $5 dividend every year, its yield is 5%. Basically, the
higher the yield, the more money you “make” per dollar invested.
Sounds great, doesn’t it? NOT RIGHT. A stock with an extremely high yield could be a trap.
It could suggest that the company’s worth dropped so much that the % payout looks great,
but the business is actually going out of business.
That 12% yield is purely emotional bait that looks like “passive cash flow.”
If anything seems too good to be true, it’s probably a multi-level marketing scheme, a
cryptocurrency, or a dividend investment that will let you down. Choose your trauma.
The Boring Kings: Dividend Aristocrats You Can Really Count On
There are corporations in the stock market that are like royalty because they have raised
their dividends every year for 25 years or more. They are called Dividend Aristocrats, and
sure, they are as annoyingly stable as they sound.
They won’t set your portfolio on fire, but they won’t disappear on you either. Here are some
names you may casually drop at brunch to sound both affluent and boring:
Coca-Cola (KO): A classic. This bubbling beast has been giving out dividends since World
War II and shows no signs of slowing. In both a real and symbolic sense, it’s liquid
capitalism.
McDonald’s (MCD): The meal might not be good, but the earnings are. Every time someone
quits cooking, shareholders gain more money.
Procter & Gamble (PG): They own everything in your kitchen, bathroom, and maybe even
your soul. Toothpaste, razors, shampoo, and pay hikes every few years.
Johnson & Johnson (JNJ): Are there any medical lawsuits? Sure. Regular dividends?
Always. It’s like putting Band-Aids on capitalism’s wounds with money.
PepsiCo (PEP): You can’t lose by betting on sugar water. People have been arguing over
Coke vs. Pepsi for years, but Pepsi has been issuing checks.
These companies aren’t going to make you a lot of money, but they’re good for investors
who want their capitalism to be clean, quiet, and free of judgment.
It’s not sexy cash. It’s “I really use Mint to budget” money.
The ugly truth is that you’ll need a lot to get a little.
This is the phase where reality hits us all right in the face.
If you buy a stock that pays a nice 5% dividend, that’s $5 a year for every $100 you invest.
So if you want $5,000 annually in passive income, you’d need $100,000 invested—and no
emotional attachments to spending it.
So, living off profits sounds great, but unless you own a small empire or have really affluent
grandparents, you won’t be able to quit your job anytime soon.
The true game? Put those suckers back to work. Most brokerages let you use your dividends
to acquire new shares automatically. Your cousin who knows a lot about money won’t stop
talking about the compound interest hack.
While you appear to care about mutual funds at parties, your money grows more money
over time.
Putting money into stocks to get dividends is like growing a beard: it looks messy at first, but
after a year, it starts to look better.
The Real Reason Dividends Are Bad
Dividends aren’t only about money; they’re also about power. The market can crash and
your tech stocks can do yoga on the floor, but those beautiful little cheques remind you that
all is not lost.
Dividends make it feel like you’re really investing. They show that capitalism can give as well
as take. When you get rewarded for holding, it feels like the universe is giving you a cosmic
wink and saying, “Maybe, just maybe, you’re doing something right.”
Until inflation takes it up, anyway.
But that’s what makes it so great. Dividends aren’t showy; they keep you grounded. They
reward those who are patient, punish people who are greedy, and sometimes pay for your
Chipotle habit.
If investing is a roller coaster, dividends are the expensive picture they snap of you
screaming to prove you made it.
The Awkward, Somewhat Existential Ending
You did it! You now know the only legal way to make rich without doing anything (kind of).
You can’t purchase a yacht with dividends. But they will quietly get rich while the rest of us
act like we’re still “grinding.” If you play the long game and reinvest intelligently, the numbers
will eventually add up to something big, like your caffeine bills but the other way around.
So select your dividend stock partner, hold on tight, and let capitalism do its thing for a
change. Because you kind of deserved it.
