SATURDAY, FEBRUARY 22, 2014
For longtime holders, Apple stock is the ultimate high-yield investment. Each share, recently $525, pays $12.20 per year in dividends, for a yield of 2.3%. But an investor who bought a decade ago, well before the iPhone launch and just as sales of iPod music players were heating up, paid less than $11 a share. That means he now collects a payout of more than 100% of his original investment each year.
Apple (ticker: AAPL) is an extreme example of something all dividend investors should shoot for. No, don't count on spotting the next 40-fold gainer that will go from paying no dividend to rivalling ExxonMobil (XOM) for annual payouts. But there's a good chance of finding companies with 1% or 2% yields today, whose payments could grow quickly—even double—over the next five years. We recently found four promising candidates: insurer American International Group (AIG), oil-services outfit Halliburton (HAL), industrial manufacturer Ingersoll-Rand (IR), and credit-card lender Discover Financial Services (DFS).