One interesting dividend stock from each sector. Get inspired to diversify
Diversification between sectors is extremely important, and there can be many advantages in choosing the appropriate fields of human activity. But finding dividend representatives may not always be easy. Let's take a look at a few interesting representatives of each!
Of course, I know there are even more sectors. Some overlap a bit, some can be subsumed under another, and so on. We'll take a look at probably the 10 most basic ones and an interesting dividend company in each.
Financial sector
Includes banks, insurance companies and other financial institutions. The current market cap of this sector is over $8 trillion. For example, an interesting company in this sector is JPMorgan Chase & Co $JPM-0.2%.
JPMorgan Chase & Co. is one of the largest U.S. banks with a total market capitalization of over $400 billion. The company was founded in 2000 when J.P. Morgan & Co. and Chase Manhattan Corporation merged.
JPMorgan Chase provides a wide range of financial services, including bank lending, investment services, wealth management, insurance, payment and trading services. The company has a global footprint and more than 250,000 employees.
JPMorgan Chase is regarded as one of the best performing banks in the industry, with high rates of return on assets and profitability. In 2020, the company achieved a net profit of USD 29.1 billion, which was 20% lower than the previous year, attributable to the impact of the COVID-19 pandemic on the economy. However, it has already recovered from this slump and currently seems to be making the most of the ongoing banking crisis, taking advantage of the problems of smaller banks. JPM currently pays a dividend of less than 3%.
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Technology sector
Includes companies engaged in the manufacture and sale of technology products and services. The sector is currently over $13.5 trillion in size. It's hard to pick just one representative here, but the dividend condition makes it a little easier. So I choose none other than Apple $AAPL+0.2% as my representative. Apple pays a modest (0.53%) dividend, but one that is perfectly sustainable and meaningful.
Apple Inc.
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Apple Inc is an American technology company that specializes in manufacturing consumer electronics such as iPhones, iPads, MacBooks and other products. The company was founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne.
Apple itself has a large stake in the sector. It has a market capitalization of over $2.7 trillion, making it one of the most valuable companies in the world. In 2020, the company will have total revenues of $274.5 billion and a net profit of $57.4 billion.
Apple has become famous over the years for the innovative design of its products and the high quality of everything it makes. The company also has strong financials,
However, Apple is also dependent on several key products such as iPhones and iPads, which can cause fluctuations in sales and profits depending on demand and competition in the industry. The company also faces pressure from regulators and criticism for its business practices, especially in the App Store. Apple is looking to diversify its revenue and expand its portfolio of services such as Apple Music, Apple TV+ and Apple Pay. The company also plans to expand its business in the healthcare and automotive sectors.
Healthcare sector
Here, the companies are engaged in the manufacture and sale of medical devices and medicines. You can't pick anyone other than Johnson & Johnson $JNJ-0.3%, an international pharmaceutical and healthcare company and one of the few with top ratings. The latter pays a nice and healthy dividend of around 3%, which is also increased over the long term. The size of the healthcare sector is currently around $7.56 trillion.
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Johnson & Johnson is an American pharmaceutical and healthcare company that specializes in the manufacture and sale of pharmaceuticals, medical devices and consumer products.The company was founded in 1886 and has a global footprint. The company employs more than 132,000 people worldwide and has offices in 60 countries.
Johnson & Johnson is considered one of the largest and most successful pharmaceutical companies in the world, with a broad portfolio of drugs and medical devices. Interesting data from fairly recently - In 2019, Johnson & Johnson had a gross profit margin of 64.7%.
However, Johnson & Johnson has also faced a number of legal disputes and criticism for its business practices, particularly in relation to certain drugs and medical devices. The company is also facing pressure from regulators and the public over its approach to the opioid crisis in the US.
Consumer sector
This sector is incredibly broad. It includes all consumer goods such as food, clothing and cosmetics. It is therefore difficult to choose one representative. However, I would consider Nike Inc $NKE-0.7%, a manufacturer of sportswear and footwear, to be an interesting company here.
NIKE, Inc.
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Nike is an American multinational company specializing in the manufacture and sale of sports equipment, footwear and apparel. The company was founded in 1964 and has its headquarters in Oregon. It pays a 1.2% dividend.
Nike is considered one of the largest and most successful companies in the sports equipment and apparel industry, with a significant global presence and an extensive product portfolio. Interestingly, in recent years Nike has been looking to strengthen its digital technology business and take advantage of new opportunities in e-commerce. The company is also investing in sustainable production and reducing its environmental impact.
Energy sector
Includes companies involved in the production and distribution of energy, including fossil fuels and renewable energy. Here, I would single out Exxon Mobil $XOM+0.9% for example. The energy sector is, somewhat surprisingly, one of the smaller ones. Its market cap is $3.3 trillion.
Exxon Mobil is one of America's largest multinational oil and gas companies, headquartered in Irving, Texas. The company's core business is the production of oil and natural gas and the manufacture and sale of a wide range of petrochemicals and fuels, which it sells worldwide. With a market capitalization of more than $420 billion, Exxon Mobil is one of the largest companies in the world. Its dividend is currently 3.4%. Despite the oil price fluctuations of recent years, the company has remained stable due to its size, financial strength and extensive portfolio of producing assets around the world, including in the U.S., Canada, the Middle East and Africa.
In the capital markets, it is considered a relatively conservative investment that pays a stable dividend, although the earnings it achieves lag behind the world's best.
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Industrial sector
Includes companies engaged in the production of industrial products and services. The market cap here is around 5.7 trillion. An interesting dividend company in this sector is Boeing $BA+0.0%, an American aerospace company that specializes in aircraft manufacturing.
Boeing is one of the world's largest aerospace companies, headquartered in Chicago. The company is a leading manufacturer of commercial aircraft, military aircraft, satellites, rockets and spacecraft. The company's principal activities are the design, manufacture and service of aircraft for passenger and military use.
Background. The market cap of the company itself is 122 billion. However, Boeing has suspended dividend payments. Until recently, however, it was a relatively reliable payer.
Boeing is one of the world's largest aircraft manufacturers. Its best-selling models are the narrow-body Boeing 737 and the wide-body Boeing 777 and 787 Dreamliner. The company also operates in the military sector by producing combat aircraft, helicopters and unmanned systems.
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Telecommunications sector
Includes companies that provide telecommunication services such as mobile and landline telephones, internet and television. An interesting company in this sector is AT&T. But it is struggling, so let's look at my other favorite - it can't be anyone other than Verizon $VZ-0.5%
Verizon Communications is one of America's largest providers of mobile and fixed telecommunications services, headquartered in New York. It has a juicy 7.4% dividend.
Verizon is one of the largest telecom service providers in the world. The company has one of the largest and most advanced mobile phone networks in the U.S., as well as an extensive fiber optic cable network for providing Internet connectivity that is continually being expanded. Despite the highly competitive market, Verizon remains a stable company with a long history, extensive network coverage and a strong customer base.
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Real estate sector
Companies in this sector are engaged in the development, purchase, sale and lease of real estate. Perhaps a little unexpectedly, I'll include $SPG+0.3% here. Ironically, this is the smallest sector on our list. Its market cap is a "mere" $1.3 trillion.
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Simon Property Group is the largest real estate investment company focused on shopping centers in the United States, headquartered in Indiana. The company's core business is owning, managing and investing in shopping centers and retail properties throughout the United States. It owns over 200 shopping centers primarily in major U.S. cities. It owns and leases shopping centers to tens of thousands of retailers, services and restaurants. With a large and diversified asset base, it is considered a stable real estate investment that regularly increases its dividend.
Automotive
A sector in which one should not allow oneself to overextend oneself. I like to take risks and would choose $TSLA-0.2%. But it doesn't pay a dividend, so I have to reach for proven companies - like Ford $F+0.9%
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Ford Motor Company is an American automobile company headquartered in Dearborn, Michigan. The company's primary business is the design, manufacture and sale of passenger cars, commercial vehicles, electric vehicles, buses and engines under the Ford brand. This probably needs no further discussion.
It is best known for its F-Series passenger car pickups, which regularly rank among the best-selling cars in the US. Ford regularly pays dividends to shareholders and is beginning to focus more on the electric car market. Despite occasional problems, Ford remains a financially sound company with a long history, a strong brand and an extensive dealer network. Currently, somewhat unusually, its dividend has surpassed 10%!
Materials
One last sector in which companies are involved is mining and manufacturing raw materials and supplies such as metals, wood and chemicals. An interesting company in this sector is Alcoa Corp. $AA-7.0%, an American producer of aluminum and other metals.
Alcoa is an American company that specializes in the production of aluminum and other metal products. It was founded in 1888 and is headquartered in Pittsburgh, Pennsylvania. In 2021, Alcoa had sales of $9.3 billion and employed approximately 13,400 people. The company's main competitors are Rio Tinto, Norsk Hydro and Rusal.
In 2020, Alcoa announced an 82% reduction in its dividend, a result of the impact of the Covid-19 pandemic on overall demand for aluminum and metal products. Previously, the company paid a dividend of $0.18 per share in 2019. Now, the dividend yield remains at 1.2%.
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What's your favorite from each sector?
Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and other sources. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.
Nicely done.
Thank you for the reminder.
Thanks 🙋♂️
Well, you got it right. I have most of them in my portfolio!
TAdy actually I probably have no problem with any at all :)