10 High Dividend Stocks to Own in 2020

In a time of uncertainty, it's important to invest in a company that offers some income security.

Author: Steven Lerner   

It's been a rough year for dividends. Many companies have suspended their dividends due to the economic fallout from the pandemic. 

 Here are the top 10 stocks with high dividends to own in 2020:

1. McDonald's Corporation (NYSE: MCD)

Dividend Yield: 2.35%

Payout Ratio: 63.78%

Despite lackluster second-quarter earnings, McDonald's is poised to recover nicely during the rest of the year. The decision to add Spicy Chicken McNuggets to its menu this fall could attract new customers and help the company go back to the top of the fast food mountain.

2. Home Depot Inc. (NYSE: HD)

Dividend Yield: 2.10%

Payout Ratio: 58.54%

Home Depot benefited greatly from the stimulus, as consumers used the extra funds for home remodeling projects. Same-store sales increased by 23% in the last quarter. The stock price is up 31% this year, and the company still offers a good dividend for any portfolio.  

3. Exxon Mobile Corporation (NYSE: XOM)

Dividend Yield: 8.51%

Payout Ratio: 154.67%

ExxonMobile might have just been kicked out of the Dow Jones, but with a 154% payout ratio, it's difficult to ignore its dividend in 2020. Hurricane season is usually a rough time of year for some energy companies, and it could hurt the stock. The price of crude oil is increasing, which means that ExxonMobile's strongest 2020 days are likely in the future.

4. AT&T Inc. (NYSE: T)

Dividend Yield: 6.96%

Payout Ratio: 58.26%

AT&T has a debt problem from the acquisition of Time Warner, but the company is quickly shedding the debt away and returning to its status as a dividend staple. The launch of HBO Max in 2020 should bring a new source of revenue by going after the streaming crowd, and it will help AT&T pay off its debt.

5. Prudential Financial, Inc. (NYSE: PRU)

Dividend Yield: 6.37%

Payout Ratio: 37.64%

If you're into buying the dip, keep Prudential Financial on your radar. Prudential Financial has sold off two of its life insurance businesses in Asia, which improve the company's financials. A recent plan for the company to redeem some of its junior subordinated notes bodes well for investors.

6. Frontline Ltd. (NYSE: FRO)

Dividend Yield: 33.45%

Payout Ratio: 341.46%

If you cling to dividend aristocrats, then look no further than Frontline. Its stock price might be down, but its dividend is an incredible value. The company raised its dividend by 75% this year, and if the company does well in the future, expect more dividend increases.

7. Duke Energy (NYSE: DUK)

Dividend Yield: 4.77%

Payout Ratio: 76.28%

Its stock might be down for the year so far, but Duke Energy has a lot of promise and a high dividend for loyal investors. The Southern U.S. energy holding company recently beat earnings expectations in the second quarter. It also just announced the acquisition of new battery storage sites, which will add to its growth.

8. Caterpillar, Inc (NYSE: CAT)

Dividend Yield: 2.92%

Payout Ratio: 37.25%

It's been a rough year for the construction machinery sector, but the tide is turning for Caterpillar. Revenue is down, but less than expected. The stock is up 7% since March. As the world recovers from the pandemic, Caterpillar will recover as well. In the meantime, its strong dividend can soothe any stock pains.

9. Comerica, Inc. (NYSE: CMA)

Dividend Yield: 6.73%

Payout Ratio: 34.83%

With Comerica's stock down 43% year-to-date, it's a good opportunity for investors to scoop in and get a piece of the financial services sector. In the second quarter, Comerica beat revenue and earnings expectations. Some analysts have labeled Comerica as a good target for M&A.

10. Johnson & Johnson (NYSE: JNJ)

Dividend Yield: 2.66%

Payout Ratio: 46.54%

For the past 57 years, Johnson & Johnson has been increasing its dividend, which is a strong reason to hold onto the stock. The share price will likely skyrocket if there are promising results from its COVID vaccine in the future.