These 7 Elite Dividend Stocks Pay $114 Billion Annually, Combined, To Their Shareholders.

There are countless ways for investors to make money on Wall Street, but few are as consistently successful as buying and holding high-quality equity stocks. Based on a study by Hartford Funds, in collaboration with Ned Davis Research (“Equity Power: Past, Present, and Future”), equity stocks have more than doubled the annual return of non-payers over half a century (1973-2024): 9.2% vs. 4.31%.

While it’s no surprise that dividend stocks have a history of underperformance, you might be shocked to learn that some of the world’s biggest dividend payers aren’t necessarily the highest yielding stocks. You can get a higher yield than Microsoft (NASDAQ: MSFT), ExxonMobil (NYSE: XOM)again JPMorgan Chase (NYSE: JPM)but you’d struggle to find public companies with more open equity plans on a dollar-for-dollar basis than these three.

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In total, the seven most influential Wall Street firms return more than $114 billion annually to their shareholders in dividends.

Even though Microsoft’s quarterly dividend of $0.91 ($3.64/year) equates to a yield of only 0.9%, it is on track to make more than $27 billion in dividends to its shareholders over the next year.

Microsoft’s ability to pay Wall Street’s largest dividend reflects the duality of its operating model. On the other hand, it enjoys the potential for rapid growth from cloud computing, its cloud infrastructure service platform, Azure, and the deployment of artificial intelligence (AI) solutions on Azure and other platforms. AI also accelerated Azure’s growth rate to nearly 40% on a constant revenue basis.

But Microsoft still generates exceptional cash flow from its legacy components, such as Windows and Office. Even though Windows is no longer, by itself, a growth driver, it remains the global desktop operating system and can generate strong margins for Microsoft.

Although it’s a narrow gap behind Microsoft, oil and gas major ExxonMobil is no dividend slouch. Based on a $1.03-per-quarter dividend ($4.12/year), that’s about $17.2 billion in cash flow over 12 months.

The beauty of ExxonMobil’s operating model is that it is integrated. While drilling generates lucrative margins for oil and gas companies, ExxonMobil also oversees midstream assets, such as pipelines and terminals, as well as downstream assets, including refineries and chemical plants. Midstream and downstream assets can counter crude oil price weakness and help stabilize the company’s operating cash flow.

But let’s be honest: commodity prices matter, too! The recent start of the Iran war, and the closure of the Strait of Hormuz to most oil exports — about 20 percent of the daily liquid fuel that passes through the Strait of Hormuz — is boosting the price of crude and raising ExxonMobil’s outlook.

When the US economy is firing on all cylinders, bank stocks are offering some of the strongest returns on Wall Street. The $1.50/quarter ($6/year) paid by JPMorgan Chase equates to $16.2 billion in annual dividend payments.

Banks are cyclical in nature, meaning they often struggle during recessions and thrive during booms. The good news is that the boom times continue a lot longer than lower. This allows JPMorgan Chase and its peers to spend more of their time wisely expanding their loan portfolio.

In addition, bank stocks benefited greatly from the Federal Reserve’s rate hike cycle from March 2022 to July 2023. To combat the highest rate of inflation in four decades, the central bank ended up raising the federal funds rate target by 525 basis points, leading to a significant increase in JPMorgan Chase’s interest income.

In addition to an apple (NASDAQ: AAPL) which sports the best share buyback program in the world ($841 billion spent on buybacks since the start of the 2013 recession), has the largest dollar dividend payments. The $0.26/quarter ($1.04/year) shareholders pay equates to approximately $15.3 billion annually.

The majority of Apple’s profits still come from its mobile devices, led by the iPhone. The inclusion of AI-driven solutions with Apple Intelligence in its physical devices seems to have controlled sales growth in recent quarters. Apple also has an incredibly loyal customer base, which gives the company exceptional pricing power.

But Apple’s future is about its pivot to subscription services. Placing more emphasis on subscriptions should increase the company’s operating margin over time, reduce sales volatility during iPhone replacement cycles, and improve its already impressive customer loyalty.

Did I mention that big oil companies and jaw-dropping dividend payouts often go hand in hand? That’s a $1.78-per-share ($7.12/year) payout Chevron (NYSE: CVX) announced in its most recent quarter up to $14.1 billion in annual dividends to its investors. Chevron has raised its annual payout for 39 consecutive years.

Many of the same catalysts fueling ExxonMobil’s growth are also at play at Chevron. In particular, an integrated operating model is critical to its success. Chevron’s refineries, chemical plants, and pipelines provide a hedge in case the price of crude oil falls.

However, drilling is still Chevron’s bread and butter. It is expanding its production capacity in the oil-rich Permian Basin, as well as integrating its $53 billion Hess acquisition, which closed last July and gave Chevron a 30% stake in the Stabroek Block offshore Guyana. The Guyana Stabroek Block is estimated to contain over 11 billion barrels of oil equivalent.

Another high-dividend stock that is more resilient than Chevron in raising its annual payout is the health care conglomerate. Johnson & Johnson (NYSE: JNJ). “J&J,” as Johnson & Johnson is better known, has increased its stock for 63 consecutive years. Its payout of $1.30/quarter ($5.20/year) results in the company giving out about $12.5 billion a year to its shareholders.

J&J’s stable cash flow is a function of its management team’s shift toward juicier-margin opportunities. It eliminated the consumer health division, now known as Kenvuein 2023 and plans to spin off its orthopedic division (DePuy Synthes) in the future. J&J focuses on the development of novel high-throughput drugs and medical devices with long-term growth runways.

Johnson & Johnson’s success is also based on the advancement of the executive suite. You only need two hands to count the number of CEOs J&J has had since its founding in 1886. Long-term leadership means that growth initiatives and key shifts are visible from start to finish.

Last but not least is the telecom titan Verizon Communications (NYSE: VZ)which pays one of the largest dollar dividends on Wall Street — $0.7075/quarter ($2.83/year), works out to $11.94 billion annually — again sports a high yield of 5.5%. Verizon has increased its basic annual dividend for 20 straight years.

Despite average sales growth in the low to mid-single digits, Verizon benefited from wireless services, broadband access, and smartphones, which have successfully evolved into a basic necessity. It enjoys a low wireless churn rate, which translates into predictable cash flow year after year.

In addition, broadband has been a bright spot for cash flow. The closing of Frontier’s acquisition by Verizon in January 2026 expands its “fiber footprint” to more than 30 million homes and businesses,” according to the company. Even though broadband isn’t the double-digit growth story it was a quarter century ago, it serves as the perfect dangling carrot to encourage the accumulation of high-margin service.

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JPMorgan Chase is the advertising partner of Motley Fool Money. Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Apple, Chevron, JPMorgan Chase, Kenvue, and Microsoft and is short Apple shares. The Motley Fool recommends Johnson & Johnson and Verizon Communications. The Motley Fool has a policy of disclosure.

These 7 Elite Dividend Stocks Pay $114 Billion Annually, Combined, To Their Shareholders was originally published by The Motley Fool.