The Motley Fool

3 Of The Best Dividend Stocks That Money Can Buy: AstraZeneca plc, SSE PLC And Premier Farnell plc

With interest rates set to stay low over the medium term, dividend stocks are likely to remain an important part of Foolish portfolios for many years to come. After all, the return on cash balances is low and may move lower if further stimulus is required following a negative outcome to the Greek debt crisis.

Of course, many stocks have high yields, but not all companies offer the stability and consistency of dividend payments that domestic energy supplier, SSE (LSE: SSE) does. For example, SSE has increased dividends in each of the last four years and, looking ahead, even if the macroeconomic outlook worsens, it is likely to continue to do so over the medium to long term. That’s simply because SSE’s revenue and profitability are less highly correlated with the macroeconomic outlook than the majority of its FTSE 100-listed peers.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Similarly, AstraZeneca (LSE: AZN) (NYSE: AZN.US) has an earnings growth profile that is less cyclical than most of its index peers. The challenge for the company, though, has been in overcoming the patent cliff that has caused its top and bottom lines to fall heavily. As a result, share buybacks have been cancelled and the company’s focus has been on acquiring new drugs to replace the ones for which patents have expired.

However, throughout this challenging period, AstraZeneca has maintained dividend payments at a relatively consistent level. For example, they have been around 183p per share in each of the last four years and, looking ahead, are set to remain at that level in both the current year and next year. Certainly, this has equated to a fall in real terms in the value of AstraZeneca’s shareholder payouts but, with the company’s financial situation on the up, it is likely that it will begin to increase dividends from 2017 onwards.

Of course, more cyclical companies can also offer excellent dividend potential, too. For example, engineering distribution company, Premier Farnell (LSE: PFL), is a relatively cyclical company which is much more dependent upon the performance of the wider economy than SSE or AstraZeneca. However, it has been able to maintain a steady dividend in the last five years and, during that time, it has paid out around 25% of its valuation from five years ago in dividends. And, looking ahead, its dividend coverage ratio of 1.4 indicates that its shareholder payouts are highly sustainable and have scope to rise as the global economic outlook improves.

So, while life is tough for savers at the present time, stocks such as AstraZeneca, SSE and Premier Farnell can make a real difference to your income levels. Their respective yields of 4.4%, 5.8% and 6.1% are hugely appealing and, as mentioned, appear to not only be sustainable moving forward, but have scope to rise by more than inflation over the medium to long term.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Peter Stephens owns shares of AstraZeneca and SSE. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.