This post may contain affiliate links. Please read our disclosure for more info.
One of my favorite investment tools we are using to build our dividend growth portfolio is LOYAL3.
LOYAL3 is a stock broker offering zero commission trades to its customers.
There are well over 50+ companies (around 70 at the time of this writing) that you can buy and sell stock in using LOYAL3.
We currently own shares of stock in 11 different companies in our LOYAL3 account. And each one of these shares was bought FREE of any brokerage fee’s or commissions. Sometimes for as little as $10 a time!
As you can probably tell by now, I am a big fan of using LOYAL3 (and Robinhood too) as one of our preferred brokers. We are always working to build our dividend income portfolio and need to save on costs whenever possible.
Do All Stocks on LOYAL3 Pay a Dividend?
I get asked this question a lot – “Do all stocks on LOYAL3 pay a dividend?”
The quick answer is NO. Not every stock available on LOYAL3 pays a dividend.
For example, well known companies like Facebook, Twitter, and Amazon can all be purchased through your LOYAL3 account. Partial shares in all of these companies can be purchased for as little as $10 a transaction.
But if you are wanting to buy dividend income producing stocks … these 3 companies won’t pay you a dividend (at least for now).
So while we are using LOYAL3 to save money and buy dividend stocks … not every company offered is a dividend growth stock.
The good news however, is that there are a bunch of great stocks you can start buying that will pay you a dividend. And probably for many years in the future.
Top Dividend Stocks Offered by LOYAL3
I ran a screen of top dividend stocks available to invest in through LOYAL3. In order to be considered, the company must currently pay a dividend (sorry Facebook).
There are 6 potential dividend stocks that met the criteria set below that could be considered for further investigation.
- 5 Years or More of Dividend Increases
- Dividend Yield > 2.0%
- Payout Ratio < 60%
- P/E Ratio < 20
- 5 Year DGR > 6%
Note – There are actually a lot more than 6 companies available to purchase on LOYAL3 that pay a dividend (around 25). However, the stock screen was run to pick the best of that list.
Here are the stocks listed below. We currently hold shares in 3 of the companies and are actively investing in 1 of them.
1 – Best Buy Corp (BBY)
Best Buy has been consistently raising annual dividends for the past 14 years.
We have continued to include BBY on our monthly stock screen list, although we don’t own any shares. Based on a low dividend yield (2.6%), we haven’t initiated a position yet.
- Dividend Yield – 2.6%
- Payout Ratio – 34.5%
- P/E Ratio – 13.1
- 5 Year DGR – 11.9%
2 – Dr Pepper Snapple Group (DPS)
Dr Pepper Snapple has been raising their annual dividends now for the past 7 years. We currently hold a small amount of DPS shares in the Money Sprout Index … but are not actively buying.
Shares of Dr Pepper Snapple only make up 0.1% of our portfolio – which accounts for $2.54 in annual income. The lower dividend yield (2.3%) and P/E close to 20 have prevented us from actively buying shares.
- Dividend Yield – 2.3%
- Payout Ratio – 45.9%
- P/E Ratio – 19.6
- 5 Year DGR – 12.7%
3 – Hasbro Inc. (HAS)
Hasbro has been rewarding it’s shareholders for the past 13 years with consistent dividend increases.
We do not currently own any HAS shares. At this point, there are better options for us to invest our money in.
- Dividend Yield – 2.6%
- Payout Ratio – 48.5%
- P/E Ratio – 18.5
- 5 Year DGR – 11.6%
4 – Target Corp. (TGT)
Target has been increasing it’s dividend now for 49 years in a row! We are actively buying shares of TGT each month through our LOYAL3 account.
The company makes up 4.8% of our overall portfolio and $108.36 in annual dividend income.
We are buying shares of Target through LOYAL3 by setting up a monthly investment plan. Our current monthly investment in TGT is $150, although over the past year it has ranged from $150 to $300.
- Dividend Yield – 3.3%
- Payout Ratio – 44.0%
- P/E Ratio – 13.3
- 5 Year DGR – 16.1%
5 – VF Corp (VFC)
VF Corp has given shareholders a consistent raise with dividend increases for the past 44 years. We currently do not own any VFC shares, but may start a small position soon.
A payout ratio (58.3%) approaching 60% has held us back from buying shares in the company.
- Dividend Yield – 3.2%
- Payout Ratio – 58.3%
- P/E Ratio – 18.5
- 5 Year DGR – 18.6%
6 – Wal-Mart (WMT)
Wal-Mart has been raising dividends for an amazing 43 years in a row! We are not actively buying shares of WMT, however the company makes up 4.8% of our portfolio.
Shares of Wal-Mart currently earn us $107.37 in annual dividend income. A slowing dividend growth rate (5 Year DGR of 7.3%) has prevented us from investing new money in the company at this time.
- Dividend Yield – 2.9%
- Payout Ratio – 43.4%
- P/E Ratio – 15.0
- 5 Year DGR – 7.3%
LOYAL3 Monthly Plans
If you are just starting out, one of the best ways to invest in dividend stocks (or any stock for that matter) on LOYAL3 is by setting up a monthly plan.
As I mentioned before, you only need $10 to buy partial shares of stock on LOYAL3 and won’t pay any commissions or fee’s.
So for as little as $10 per month, you can invest in dividend stocks through LOYAL3.
Once a monthly plan is setup, you don’t need to do anything really.
As you start receiving dividend payments, they automatically get credited into your cash balance. If they are not used before, these dividends will be used first to make your next monthly investment.
The balance is then automatically pulled from your checking account.
It can’t get much simpler than that!
Do you use LOYAL3 to invest in dividend stocks? What has been your experience using this broker to build your portfolio?
Full Disclosure – At the time of this writing, we owned shares in the following stocks noted in this post – DPS, TGT, and WMT. The material above is not a recommendation to buy. Please do your own research on a company before deciding to invest.