Dividend yielding stocks can help boost an investor’s portfolio. Income portfolios allow for quarterly income to be made, and can fuel additional investments and pad retirement funds. The problem is that the highest dividend yields are often tied to companies that don’t have a balance sheet that can sustain high dividend payouts over the long-term.
Smaller investors that need to fund their retirement need to avoid high-risk stocks despite their high dividend yields.
Two companies that have high earnings, a long history, low-risk and a dividend yield that can help boost your income portfolio include:
1. Microsoft (MSFT)
Microsoft remains on top of the software world. The company has also dipped into the lucrative cloud business and offered Windows 10 upgrades to consumers for free. The company offers a 2.5% dividend yield with a forward P/E of under 18.
The company’s stock is up over 33% in the past 12-month period and posted profits of $6.87 billion for the first half of 2016.
Microsoft’s cloud segment sales increased by 10% during the last quarter while the company’s business processes segment posted an 8% uptick in sales. The uptick in sales allowed the company’s revenue as a whole to jump 5% as PC sales slow and harm competitors.
Commercial Office 365 sales grew 54% last quarter.
2. International Business Machines (IBM)
IBM is a giant in the tech world, and the company offers a 3.5% dividend with an even lower forward P/E of 11. The company has done well to transform its company to move into the cloud and security sectors.
The company’s cloud business is on track to post $11.6 billion in revenue in 2016.
IBM’s core revenue is down nearly $30 billion in the past 10 years, and the company’s transformation is taking longer than investors had hoped. The company has worked through numerous partnerships to speed up its transformation with a recent announcement that the company will partner with VMware (VMW) in a new cloud partnership.
