U.S. Markets open in 2 hrs 30 mins

The 3 Dividend Stocks You'll Wish You'd Bought 10 Years From Now

Keith Noonan, Sean O'Reilly, and Dan Caplinger, The Motley Fool

Almost all investors will encounter that sting of regret as they watch from the sidelines a promising stock generate great returns. But they can avoid the disappointment of missing out by keeping an eye out for great companies and striking when opportunities arise. 

With a focus on dividend-paying stocks, we asked three Motley Fool investors to profile a company that investors are likely to regret not staking a long-term position in. Here's why Microsoft (NASDAQ: MSFT)Dominion Energy (NYSE: D), and Disney (NYSE: DIS) made the list.

A bar chart going up from left to right, stationed on top of a tablet.

Image source: Getty Images.

Your window to better dividends

Dan Caplinger (Microsoft): Throughout much of its history, Microsoft was more of a growth leader than a dividend stock. Yet the tech giant has matured, and key products like its Office work-productivity software suite and its Windows operating systems are cash cows that bring in huge amounts of revenue and profit. That in turn has led Microsoft to pay more attention to sharing its success with stockholders, through dividends.

Dividend increases have become part of the culture at Microsoft, and that's one reason why the coming decade looks so promising. In November, Microsoft declared an 8% increase to its quarterly dividend, so shareholders will be receiving $0.42 per share every three months. That works out to just a 2% yield at current prices, which doesn't seem all that inspiring. However, the move marked the 16th straight year in which Microsoft has boosted its payout, and over the past 10 years, the dividend has quadrupled.

Microsoft still has plenty of growth opportunities, including recent forays into cloud computing and a greater emphasis on recurring revenue. If it can execute on just a fraction of its initiatives, Microsoft should remain in position to become a Dividend Aristocrat within 10 years and keep its shareholders happy.

Generating electricity and dividend growth

Sean O'Reilly (Dominion Energy): It's rare for a stock to offer investors both an above-average dividend yield and the certainty of an even higher payout a decade in the future. Yet here's one that does: Dominion Energy. 

Based in Richmond, Virginia, and with operations mostly in the eastern U.S., Dominion currently offers a yield 3.78%. Its dividend has also grown handsomely over the past decade, rising an average of 6.4% per year. Looking ahead, Dominion is expected to surpass this impressive dividend growth. In its third-quarter earnings report, the company reiterated its plans to grow its payout 10% per year through 2020. It will almost certainly continue to rise, as management currently has projects in the works that will fuel earnings growth of an estimated 5% per year well into the 2020s. To make its growth projections a reality, Dominion has multiple projects currently approved or under construction. These include its massive 1,588-megawatt gas-fired combined-cycle power plant located in Greensville County, Virginia. Natural gas is the cleanest fossil fuel, and Dominion's new Greensville plant will be the largest and most efficient natural gas plant in the country. 

With health and growing dividend, and plans to ensure future growth, Dominion Energy is a dividend stock you'll wish you'd bought today.

Stack dividends in the Magic Kingdom

Keith Noonan (Disney): With its yield sitting at just 1.5%, Disney is a stock that might not be on the radar of many income-focused investors. Its payout might not look like much today, but its dividend is growing quickly, and investors have the chance to buy a great company at a discount relative to its growth potential.

As is often the case, that opportunity comes as the company is encountering some challenges. Declining ratings for its ESPN channels, broader threats posed to its media networks segment by the cord-cutting trend, and a slip in traffic at its theme parks have dampened the market's outlook for the company. However, Disney is a business that's built to overcome these challenges and reward long-term shareholders. The company has an unrivaled catalog of entertainment content that gives it a good chance of succeeding as it enters the stand-alone streaming space, and the House of Mouse remains in good shape to deliver dividend growth as it navigates changes in the entertainment industry landscape.

With the exception of a bonus disbursement that took place in 2014 when the company switched from an annual to a semiannual payout, Disney has boosted its payout every year since 2010 and has more than doubled its payout over the last five years. The current dividend distribution represents just 27% of trailing earnings and 28% of trailing free cash flow, so the company has plenty of room for payout increases even if earnings growth is slow in the near term.

With the world's strongest assortment of entertainment properties, a fast-growing returned income component, and shares trading at roughly 15 times forward earnings estimates, Disney is a dividend stock that investors could regret missing out on. 

More From The Motley Fool

Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Dan Caplinger owns shares of Walt Disney. Keith Noonan has no position in any of the stocks mentioned. Sean O'Reilly has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Dominion Resources. The Motley Fool has a disclosure policy.

  • Better Buy: Aurora Cannabis Inc. vs. Canopy Growth Corporation
    Business
    Motley Fool

    Better Buy: Aurora Cannabis Inc. vs. Canopy Growth Corporation

    Canadian marijuana producers have entered a new era. After several years of supplying medical marijuana nationwide, they have begun moving into Canada's recreational marijuana market, which opened on Oct. 17. Canopy's share price has soared three times higher than Aurora's has.

  • Can AMD Stock Go on a Bull Run Once Again?
    Business
    Motley Fool

    Can AMD Stock Go on a Bull Run Once Again?

    Advanced Micro Devices (NASDAQ: AMD) shares have fallen off a cliff over the past month, as investors are probably concerned about whether it can sustain its rally in the face of a fading tailwind and rising competition. The chipmaker has minted a lot of money thanks to cryptocurrency mining, but that catalyst is fizzling out and rival NVIDIA (NASDAQ: NVDA) has launched a new generation of graphics chips to reclaim its lost market share. AMD blames weak GPU sales to the cryptocurrency market for this slowdown, but recent developments indicate that it could easily surpass the low-balled guidance.

  • Business
    Benzinga

    Barron's Picks And Pans: Alibaba, Citizens Financial, FAANG Stocks And More

    This weekend's Barron's cover story shows why emerging markets may be ready to rebound. Other featured articles examine why stocks will rally in 2019 and how to play preferred stock as yields rise. Also: the prospects for Chinese internet giants and

  • Don’t cheat yourself with the 4% rule
    Business
    MarketWatch

    Don’t cheat yourself with the 4% rule

    If you’re planning for retirement, you’re probably thinking about how much you’ll need, how long the money will last, and how much you can safely take out each year. You recognize that in retirement there will be a balancing act between spending on current needs while also preserving enough for your later years. Instead, all-too-often, retirees use simplified rules of thumb to determine how much to take out each year.

  • A Reduced Payout Could Be Coming for These 3 High-Yield Dividend Stocks
    Business
    Motley Fool

    A Reduced Payout Could Be Coming for These 3 High-Yield Dividend Stocks

    The bull market has been churning higher for nearly 10 years now as the S&P 500 has more than quadrupled since the market bottom in 2009. Investors in some high-yield dividend stocks may be worried about a payout cut, especially with rising interest rates making bonds more appealing. Let's take a closer look at three high-yield dividend stocks that could see a reduced payout.

  • Elon Musk’s 150mph 'Loop' tunnel system to open in December
    Business
    The Telegraph

    Elon Musk’s 150mph 'Loop' tunnel system to open in December

    Taking to Twitter, the billionaire SpaceX founder said his underground tunnel for the project "is almost done" and will be ready on December 10. The tunnel, which is being built by Musk's Boring Company, will contain autonomous electric skates capable of transporting cars and people at speeds of up to  125-150mph. The Boring Company's website says the tunnel runs from SpaceX's parking lot east of Crenshaw Boulevard and south of 120th Street, then turns west under 120th Street, and remains underground along 120th Street for 2 miles.

  • Democrats Hold a 9-Point Lead in Midterms. But Trump's Job Rating Is at an All-Time High
    Politics
    Fortune

    Democrats Hold a 9-Point Lead in Midterms. But Trump's Job Rating Is at an All-Time High

    Democrats hold a nine-point lead going into the midterm elections Nov. 6, but President Donald Trump’s job rating is at an all-time high, according to a new NBC News/Wall Street Journal poll. The Democrats’ nine-point lead is among likely voters, who prefer Democratic Congressional candidates over Republicans by that margin. Trump’s job rating among registered voters between Oct. 14 and 17 was at 47% approve to 49% disapprove, compared to 44% approve and 52% disapprove a month earlier.

  • Saudi Arabia's King and Crown Prince Call Slain Journalist Jamal Khashoggi's Son
    World
    Meredith Videos

    Saudi Arabia's King and Crown Prince Call Slain Journalist Jamal Khashoggi's Son

    Saudi Crown Prince Mohammed bin Salman called the son of Jamal Khashoggi, the kingdom announced early Monday, to express condolences for the death of the journalist killed at the Saudi Consulate.

  • This Warren Buffett Stock Is Dirt Cheap Right Now
    Business
    Motley Fool

    This Warren Buffett Stock Is Dirt Cheap Right Now

    Warren Buffett has amassed a large portfolio of bank stocks for Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) with major holdings in Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), and American Express (NYSE: AXP), just to name a few of the most well-known and largest investments. Synchrony is a major issuer of store-branded credit cards and also operates a rapidly growing online banking platform.

  • Say Goodbye to Amazon's Blockbuster Revenue Growth
    Business
    Motley Fool

    Say Goodbye to Amazon's Blockbuster Revenue Growth

    Throughout its history, Amazon (NASDAQ: AMZN) has possessed a certain ingenuity in finding new ways to grow. Just when the company seems to be maturing in one sector, it finds a new one to jump into. Since the company's early history, its quarterly revenue growth has cycled between 15% and 50%, depending on where it is in the growth cycles in the above businesses.

  • Better Buy: Ford Motor Company vs. General Motors
    Business
    Motley Fool

    Better Buy: Ford Motor Company vs. General Motors

    Both Ford Motor Company (NYSE: F) and General Motors (NYSE: GM) have been investor favorites in the not-too-distant past, and both pay good dividends. Ford has a slew of new products on the way, starting with a brand-new Ranger pickup early next year. Ford and GM have both had a rough year in the stock market.

  • Which Canadian Marijuana Stock Will Enjoy a Bigger Bump From Its NYSE Listing -- Aphria or Aurora?
    Business
    Motley Fool

    Which Canadian Marijuana Stock Will Enjoy a Bigger Bump From Its NYSE Listing -- Aphria or Aurora?

    Maybe Wall Street should be called "Weed Street." Big Canadian marijuana grower Canopy Growth listed its stock on the New York Stock Exchange (NYSE) earlier this year. Aurora Cannabis (NASDAQOTH: ACBFF) begins trading on the NYSE on Tuesday, Oct. 23. Aphria (NASDAQOTH: APHQF) filed last week to list its stock on the NYSE.

  • 3 Dividend Stocks That Pay You More Than Coca-Cola Does
    Business
    Motley Fool

    3 Dividend Stocks That Pay You More Than Coca-Cola Does

    With a better than 50-year history of paying dividends, Coca-Cola (NYSE: KO) is seen as an icon of stable, strong, secure payouts. Although Coke and its dividend are not in trouble, there are better investments to be found. Three stocks that these Motley Fool contributors particularly like are Dominion Energy (NYSE: D), AbbVie (NYSE: ABBV), and MGM Growth Properties (NYSE: MGP).

  • 3 Reasons Alibaba Stock Could Rise
    Business
    Motley Fool

    3 Reasons Alibaba Stock Could Rise

    After reaching an all-time high of $211.70 in June, Alibaba (NYSE: BABA) shares have shed nearly a third of their value as fears of an escalating trade war between China and the U.S. rattled investors. China's e-commerce market will grow to $1.8 trillion by 2022, according to Forrester, up from $1.1 trillion this year. With only 38% of China's 1.4 billion people currently making purchases online, this massive market is set to grow briskly for many years to come.

  • This Midstream Oil & Gas Stock Is Still a Steal
    Business
    Motley Fool

    This Midstream Oil & Gas Stock Is Still a Steal

    The midstream sector is out of favor today, with the Alerian MLP ETF still off roughly 45% from its mid-2014 highs. Midstream companies own the assets that move oil, natural gas, and related products around the country. Investors were pretty excited about this space a few years back, pushing the prices of midstream companies higher and their yields lower.

  • Religious Extremists Got Their Justice. Now They're Going To Strip LGBTQ Rights.
    Politics
    HuffPost Opinion

    Religious Extremists Got Their Justice. Now They're Going To Strip LGBTQ Rights.

    While much of the country was in an uproar over the nomination (and confirmation) of Brett Kavanaugh to the U.S. Supreme Court, anti-LGBTQ religious extremists in Texas filed a federal lawsuit against the city of Austin targeting its anti-discrimination ordinance protecting LGBTQ people, claiming it infringes on their religious liberty. Like many municipalities and less than half of U.S. states, Austin protects gay, lesbian, bisexual and transgender people broadly from discrimination in housing, employment and public accommodations.

  • Business
    Benzinga

    Bulls & Bears Of The Week: Apple, Disney, Ford, Home Depot And More

    Benzinga has featured looks at many investor favorite stocks over the past week. Bullish calls included leaders in entertainment, tobacco and video games. Bearish calls included a Detroit automaker and big box retailer. Last week began with a mystery

  • Rep. Gabbard on how US should respond to Khashoggi's death
    World
    Fox Business Videos

    Rep. Gabbard on how US should respond to Khashoggi's death

    Saudi prosecutors say 18 Saudis are being held as suspects in Jamal Khasoggi's death; reaction from Democratic Rep. Tulsi Gabbard.

  • 3 Warren Buffett Stocks Worth Buying Now
    Business
    Motley Fool

    3 Warren Buffett Stocks Worth Buying Now

    Known as the Oracle of Omaha, Warren Buffett has collected both an incredible investment record and a deservedly vast following among investors of all types. Every move he makes is scrutinized in the hope of gleaning  wisdom from his investment choices.

  • Here's Which Marijuana Stocks Investors Are Betting Against the Most
    Business
    Motley Fool

    Here's Which Marijuana Stocks Investors Are Betting Against the Most

    Canada's recreational marijuana market is now open for business. Some are confident enough that certain marijuana stocks will fall that they're putting a lot of money on the line expecting that's exactly what will happen. The marijuana grower's low stock float and wild swings over the last month have received a lot of attention.

  • The ‘smart money’ says it’s time to buy the Chinese internet giants and the U.S. FAANGs
    News
    MarketWatch

    The ‘smart money’ says it’s time to buy the Chinese internet giants and the U.S. FAANGs

    When the media and investors turn negative on stocks but the “smart money” is bullish, it’s a good time to think about buying. After all, exactly what is the smart money, and how do you know? Lately, several fund managers who pass this test have been pounding the table on Chinese internet names.

  • Get Ready for Intel Earnings
    Business
    Motley Fool

    Get Ready for Intel Earnings

    Ahead of Intel's earnings release, it's worth recapping what the company told investors to expect and what the analyst community is expecting. When Intel released its second-quarter financial results on July 26, it provided detailed financial guidance for the subsequent quarter, as well as for the full year. The company told investors to expect third-quarter revenue of between $17.6 billion and $18.6 billion and operating margin of "approximately" 32.5%.

  • How the Heck Did Netflix Stock Go Down Last Week?
    News
    Motley Fool

    How the Heck Did Netflix Stock Go Down Last Week?

    Everything seemed to go right for Netflix (NASDAQ: NFLX) last week. It has another hit on its hands with The Haunting of Hill House, an eight-part horror series based on Shirley Jackson's novel that has even won the praise of the immortal Stephen King. Netflix is killing it, but investors are unfortunately singing a different tune.

  • Suze Orman has a killer question for your retirement
    Business
    MarketWatch

    Suze Orman has a killer question for your retirement

    Suze Orman is one of those singular personalities in the financial business who seems to be right on the pulse of everyone she meets. She’s written books, starred in her own television show and made innumerable appearances in person. Like Oprah

  • 3 Energy Stocks You Can Buy and Hold for the Next Decade
    Business
    Motley Fool

    3 Energy Stocks You Can Buy and Hold for the Next Decade

    North America needs to build $23 billion of new natural gas-related infrastructure annually through 2035, according to a recent report. Three of the best positioned to capture this growth are Kinder Morgan (NYSE: KMI), Williams Companies (NYSE: WMB), and TransCanada (NYSE: TRP), making them great stocks to buy and hold in the coming decade. Kinder Morgan is already the largest natural gas pipeline company in North America, operating roughly 70,000 miles of pipeline.