Top Highest Dividend Paying Stocks in the USA: A 10-Year Financial Analysis

Dividends are one of the most important factors for income-seeking investors, as they provide a reliable stream of passive income. In the U.S. stock market, certain companies have demonstrated remarkable resilience and consistency in paying high dividends over the years. In this article, we will explore the top highest dividend-paying stocks in the U.S. over the last decade, analyzing their financial health and performance.

Key Metrics for Identifying Top Dividend Stocks

Before diving into the analysis of the stocks, it's important to highlight the key metrics used to evaluate dividend-paying companies:

1. Dividend Yield: This represents the annual dividend as a percentage of the stock price. A higher dividend yield indicates a higher payout relative to the stock's price.
2. Dividend Growth: Companies that increase their dividends regularly show strength in generating cash flow and maintaining profitability.
3. Payout Ratio: This is the percentage of earnings paid out as dividends. A sustainable payout ratio (typically below 70%) is a good sign of dividend sustainability.
4. Free Cash Flow (FCF): Positive free cash flow is crucial for sustaining dividends over time.
5. Debt-to-Equity Ratio: A high level of debt can sometimes threaten dividend sustainability, so companies with lower ratios are generally preferred.

Top Dividend-Paying Stocks in the U.S. Over the Last 10 Years

Below is a table listing some of the highest-paying dividend stocks in the U.S. over the past decade, along with key metrics to assess their financial performance.

Company Name	Dividend Yield (2023)	Dividend Growth (Last 10 Years)	Payout Ratio (2023)	Free Cash Flow (2023)	Debt-to-Equity Ratio	Sector
AT&T (T)	7.4%	2.1%	65%	$10.4 billion	0.72	Telecom
ExxonMobil (XOM)	3.6%	5.5%	32%	$32.5 billion	0.21	Energy
Chevron (CVX)	3.4%	6.2%	37%	$17.2 billion	0.17	Energy
Johnson & Johnson (JNJ)	2.7%	6.8%	42%	$20.4 billion	0.48	Healthcare
Procter & Gamble (PG)	2.5%	6.1%	59%	$15.1 billion	0.56	Consumer Goods
Coca-Cola (KO)	3.2%	4.6%	75%	$9.6 billion	1.60	Consumer Goods
PepsiCo (PEP)	2.9%	5.2%	57%	$10.4 billion	2.40	Consumer Goods
Realty Income (O)	5.5%	4.0%	80%	$0.85 billion	0.62	Real Estate
Kimberly-Clark (KMB)	3.1%	5.7%	56%	$2.8 billion	3.18	Consumer Goods
Pfizer (PFE)	4.1%	5.9%	53%	$18.3 billion	0.35	Healthcare

Detailed Financial Analysis of Top Dividend Stocks

1. AT&T (T)

• Dividend Yield: AT&T is one of the highest dividend-yielding stocks in the telecom sector. Its yield of 7.4% makes it an attractive option for income investors.
• Dividend Growth: The company has faced some challenges in the past, and its dividend growth rate is modest at 2.1%. However, the company is committed to maintaining dividend payouts.
• Payout Ratio: At 65%, AT&T's payout ratio is manageable, leaving room for reinvestment and debt reduction.
• Free Cash Flow & Debt: AT&T has solid free cash flow of $10.4 billion, but its debt-to-equity ratio of 0.72 suggests a moderate level of leverage.

2. ExxonMobil (XOM)

• Dividend Yield: ExxonMobil’s 3.6% dividend yield is strong, especially in the energy sector where yields can be volatile.
• Dividend Growth: The company has increased its dividend by an impressive 5.5% annually over the last 10 years.
• Payout Ratio: A low payout ratio of 32% shows that ExxonMobil is efficiently managing its earnings while reinvesting heavily in growth.
• Free Cash Flow & Debt: With $32.5 billion in free cash flow, ExxonMobil is financially sound. The low debt-to-equity ratio of 0.21 further strengthens its position.

3. Chevron (CVX)

• Dividend Yield: Chevron offers a reliable 3.4% dividend yield.
• Dividend Growth: Chevron has raised its dividend at a rate of 6.2% per year, showing strong financial health.
• Payout Ratio: With a payout ratio of 37%, Chevron is able to maintain its dividend and reinvest in business operations.
• Free Cash Flow & Debt: The company’s free cash flow of $17.2 billion and low debt-to-equity ratio of 0.17 demonstrate its capacity to pay dividends while maintaining a strong balance sheet.

4. Johnson & Johnson (JNJ)

• Dividend Yield: At 2.7%, J&J’s yield is relatively lower, but its dividend growth rate of 6.8% makes it an attractive choice for dividend growth investors.
• Dividend Growth: The company has consistently raised dividends over the past 10 years.
• Payout Ratio: With a payout ratio of 42%, J&J maintains a balance between rewarding shareholders and reinvesting profits.
• Free Cash Flow & Debt: Strong free cash flow of $20.4 billion and a low debt-to-equity ratio of 0.48 underline the company’s financial stability.

5. Procter & Gamble (PG)

• Dividend Yield: Procter & Gamble’s yield of 2.5% is modest but supported by consistent dividend growth of 6.1%.
• Dividend Growth: The company has consistently increased its dividends, a hallmark of its financial strength.
• Payout Ratio: With a payout ratio of 59%, P&G strikes a balance between rewarding investors and reinvesting for growth.
• Free Cash Flow & Debt: The company’s free cash flow is robust at $15.1 billion, with a debt-to-equity ratio of 0.56, indicating financial prudence.

6. Coca-Cola (KO)

• Dividend Yield: Coca-Cola offers a solid dividend yield of 3.2%.
• Dividend Growth: The company’s dividend growth rate of 4.6% is steady, reflecting stable earnings.
• Payout Ratio: With a high payout ratio of 75%, Coca-Cola is highly committed to its dividend but faces potential sustainability concerns if earnings decline.
• Free Cash Flow & Debt: Coca-Cola generates $9.6 billion in free cash flow but has a relatively high debt-to-equity ratio of 1.60, indicating that its debt load may pose risks in challenging economic conditions.

7. PepsiCo (PEP)

• Dividend Yield: PepsiCo offers a yield of 2.9%, accompanied by a solid 5.2% dividend growth rate.
• Dividend Growth: PepsiCo has consistently grown its dividends, showing resilience even in challenging times.
• Payout Ratio: At 57%, the payout ratio is healthy, allowing PepsiCo to maintain dividends while reinvesting in innovation.
• Free Cash Flow & Debt: Free cash flow stands at $10.4 billion, with a debt-to-equity ratio of 2.40, which is higher than most competitors but manageable given the company’s cash flow.

8. Realty Income (O)

• Dividend Yield: Realty Income is a standout in the real estate sector with a yield of 5.5%.
• Dividend Growth: Realty Income’s dividend growth rate of 4.0% reflects steady performance.
• Payout Ratio: The payout ratio is high at 80%, which is typical for Real Estate Investment Trusts (REITs) due to the tax structure they must adhere to.
• Free Cash Flow & Debt: The company’s free cash flow is lower compared to others on the list, but its debt-to-equity ratio of 0.62 helps manage risk.

9. Kimberly-Clark (KMB)

• Dividend Yield: Kimberly-Clark offers a dividend yield of 3.1%.
• Dividend Growth: With a dividend growth rate of 5.7%, the company demonstrates resilience in its operations.
• Payout Ratio: The company maintains a balanced payout ratio of 56%.
• Free Cash Flow & Debt: Free cash flow is at $2.8 billion, and the debt-to-equity ratio is high at 3.18, which could pose risks for dividend sustainability if business conditions worsen.

10. Pfizer (PFE)

• Dividend Yield: Pfizer’s dividend yield stands at 4.1%, offering an attractive option for income investors.
• Dividend Growth: Pfizer’s 5.9% dividend growth rate reflects its ability to adapt to changes in the healthcare sector.
• Payout Ratio: A payout ratio of 53% suggests that the company can comfortably sustain its dividend while investing in future growth.
• Free Cash Flow & Debt: Pfizer’s strong free cash flow of $18.3 billion and a conservative debt-to-equity ratio of 0.35 bolster its dividend-paying ability.

Conclusion

Over the past decade, dividend-paying stocks in the U.S. have shown resilience, with companies in sectors such as energy, consumer goods, healthcare, and telecommunications leading the way. High dividend yield alone is not enough—investors should consider factors like dividend growth, payout ratio, and free cash flow to identify truly sustainable dividend stocks.

Among the top performers, ExxonMobil, Chevron, and Johnson & Johnson stand out as the most reliable and financially sound, while AT&T and Coca-Cola offer high yields but face challenges in terms of financial sustainability. Realty Income offers a solid income stream, especially for REIT investors. Diversifying across these top dividend stocks provides an excellent balance between income and growth potential for long-term investors.