Now that we've flipped the calendar to 2020, we're going to look at last year's 10 best-performing dividend stocks.
Even if you don't find a company here that you'd consider investing in, hopefully, this review will provide you with some insights that could help you pick a top-performing dividend stock.
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The 10 top-performing dividend stocks of 2019
The stocks are ranked based upon their returns last year. Companies had to meet two criteria to be included on the list: They had to be large caps (i.e., have a market cap of at least $10 billion) and have dividend yields of at least 3% at the end of the year.Nine out of the 10 are profitable on a trailing-12-month basis; Western Digital is the odd company out.
Rank | Company | Market Cap* | Dividend Yield* | Projected 5-Year Annualized EPS Growth* | 2019 Return | 2010s Decade Return |
|---|---|---|---|---|---|---|
| 1 | The Carlyle Group (CG) | $10.9 billion | 4.3% | 15.8% | 117% | N/A |
| 2 | Apollo Global Management (APO) | $19.2 billion | 4.2% | 11.4% | 107% | N/A |
| 3 | The Blackstone Group (BX) | $67 billion | 3.5% | 13.9% | 96.3% | 668% |
| 4 | Western Digital (WDC 1.52%) | $18.9 billion | 3.1% | (13.8%) | 77.1% | 75.4% |
| 5 | Seagate Technology (STX) | $15.3 billion | 4.3% | 7.2% | 62.1% | 409% |
| 6 | Mobile TeleSystems(MBT) | $9.3 billion | 8.7% | 0.1% | 61.2% | 11.9% |
| 7 | TC Energy (TRP -0.50%) | $49.4 billion | 4.4% | 5.8% | 56.3% | 136% |
| 8 | Phillips 66 Partners (PSXP) | $14.4 billion | 5.6% | 7.8% | 56.2% | N/A |
| 9 | The Southern Company (SO 0.03%) | $65.9 billion | 4% | 1.5% | 51.7% | 205% |
| 10 | Brookfield Infrastructure Partners (BIP 1.48%) | $14.8 billion | 4% | 11.1% | 51.4% | 633% |
S&P 500 | -- | 1.9% | -- | 31.5% | 257% |
Data sources: Yahoo! Finance and YCharts. EPS = earnings per share. *Data as of Jan. 6, 2020.
Investment management companies top the list
Given that 2019 was a great year for the stock market and that other investment vehicles also performed well, it's not surprising that three companies in the investment space top this list. The Carlyle Group, Apollo Global Management, and The Blackstone Group are leading global investment firms that hold assets across a range of classes, including private equity, real assets, and credit. Their investors includewealthy individuals and families, pension funds, sovereign wealth funds, university endowments, charitable foundations, unions, and corporations.
At the end of the third quarter, Carlyle had $222 billion in assets under management, Apollo had $323 billion, and Blackstone had $554 billion, which was up a whopping 21% year over year.Wall Street expects all three companies to post solid earnings growth over the next five years, as the chart shows. Carlyle is expected to lead the way with average annual earnings growth of 15.8% over this period.
Three tech stocks -- including a Russian one
Technology stocks are also well represented on the list, taking slots four (Western Digital), five (Seagate Technology), and six (Mobile TeleSystems).Western Digital sells data storage devices, systems, and solutions for businesses and consumers. Its brands include Western Digital, G-Technology, SanDisk, Upthere, andWD. Seagate is also a data storage company. Between them, the two dominate the hard disk drive (HDD) market.
Mobile TeleSystems, or MTS, is Russia's leading telecommunications operator and digital services provider. Its dividend currently yields a whopping 8.7%. Stocks with such high yields tend to be risky and volatile, and indeed, while MTS stock had a great 2019, it's a long-term underperformer. It returned a paltry 1.9% over the just-ended decade.
A pair of energy stocks
It makes sense that a couple of energy stocks would make this list since energy prices rose last year. TC Energy (No. 7) operatesnatural gas and crude oil pipelines, storage facilities, and nuclear power plants in Canada, the United States, and Mexico. The company has increased its dividend payout for 19 consecutive years.
Phillips 66 Partners (No. 8) is a master limited partnership (MLP) formed by Phillips 66 to "own, operate, develop, and acquire primarily fee-based crude oil, refined petroleum product and natural gas liquids (NGL) pipelines and terminals and other transportation and midstream assets."
And a pair of utility stocks
Lastly, we have two companies in what many investors consider the quintessential dividend stock sector -- utilities. Indeed, the vast majority of utilities pay dividends.
The Southern Company (No. 9) is the fifth-largest utility company (of any type) by market cap in the U.S. It operates electric utilities in three southern states, naturalgas utilities in four states (three southern states plus Illinois), a power generation company serving wholesale customers across the country, a distributed energy infrastructure company, a fiber optics network, and telecommunications services. The company has increased its dividend for 19 consecutive years.
Brookfield Infrastructure Partners (No. 10) is one of the world's largest owners and operators of critical global infrastructure networks that "facilitate the movement and storage of energy, water, freight, passengers and data." It has raised its dividend for 12 consecutive years.
Beth McKenna has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.
