Usually, growing companies want to avoid dividends, opting to put their money into the business instead. However, that does not mean it is impossible to find dividend-paying growth stocks.
For example, Warren Buffett’s company, Berkshire Hathaway, owns stock in Mastercard and Apple, and both companies give quarterly dividends while still keeping a solid pathway for growth. Here is what you should know.
Apple has formed a consumer electronics empire. From iPhones to Macs to AirPods and the Apple Watch, the company’s hardware almost always captivates customers worldwide. In fact, Apple has a user base of over 1.65 billion devices worldwide as of its first quarter in 2021, and that is probably going to climb with the new launch of its M1-powered iPad Pro and iMac.
Not surprisingly, the company gave solid numbers over the long term.
Since 2016, Apple’s share price has increased over 375%, but shareholders have also gotten a lot of benefit from routine dividend payments. Currently, the company’s quarterly payout is $0.22 a share, but that number has gone up each year since 2012. And with Apple’s great balance sheet, investors should expect the trend to keep going.
Apple is Warren Buffett’s biggest holding, making up 40% of his company’s portfolio.
Mastercard’s platform connects merchants, consumers, and banking institutions, helping electronic payments in more than 210 nations. Last year, the company did 24% of all card-powered transactions, making Mastercard the third top payments network worldwide.
Since 2015, the company’s stock has more than tripled, going up by 285%. At this same time, its dividends have increased every four quarters, even during the covid pandemic. That backs the company’s underlying stability, and it gives me the confidence that Mastercard can stand just about anything.
Currently, their quarterly dividend is numbered at $0.44 a share, giving a payout ratio of only 31%. So in other words, investors have a good cause to think those annual dividend boosts will keep going.
Moreover, given its huge market opportunity and good competitive position, Mastercard might be a market-stomping investment over the long term. That is why you should consider investing in this stock right now.
Author: Blake Ambrose