Top 10 US Dividend Stocks for Malaysian Investors in 2024

In today’s globalized financial landscape, portfolio diversification has become more important than ever. For Malaysian investors looking to expand their horizons beyond the domestic market, US dividend stocks offer an attractive opportunity to generate stable income while realising potential capital appreciation. The attraction of US dividend stocks lies not only in their historical performance but also in the stability they offer in volatile market conditions. By focusing on the best dividend stocks, investors can find reliable income and growth potential. Investors need to understand the unique advantages and considerations of investing in these securities.

This guide aims to help Malaysian investors understand US dividend stocks by exploring their intrinsic value and investment potential. By evaluating each stock’s dividend yield, company fundamentals, industry position and growth prospects, it will help Malaysian investors screen decisions that meet their investment objectives. For those looking to diversify their portfolios, identifying the right stocks to buy is crucial. Whether you are a seasoned investor or just starting out, understanding the US Dividend Stocks is one of the tools to build a solid and diversified portfolio to help investors in their investment journey.

What are US Dividend stocks?

The best dividend stocks are a reliable source of passive income when considering international investment opportunities. US dividend stocks are ownership shares of a US company that regularly distributes a portion of its earnings to shareholders in the form of cash payments or additional shares. These distributions are called dividends and are usually paid quarterly.

How Dividend Stocks Work

Dividend stocks in the United States operate on a simple principle: when a company makes a profit, it has the option of distributing a portion of that profit to shareholders in the form of a dividend. The process usually involves the following steps:

• Earnings assessment: The company first assesses its financial position and profitability.

• Board of Directors Decision: The board of directors decides whether to pay a dividend and the amount to be paid.

• AGM approval: The decision to pay a dividend needs to be approved at a shareholders’ meeting.

• Dividend declaration: Once approved, the company declares the exact amount of the dividend and the date of payment.

• Dividend Payment: On the specified date, the dividend is paid to shareholders registered before the record date.

Over the long term, dividend stocks have generated substantial returns, emphasizing the importance of patience and a strategic mindset in navigating fluctuating market conditions.

Distribution of dividends

Dividends are usually distributed in two forms:

• Cash dividends: the most common form, where the company pays cash directly to shareholders.

• Stock dividend: less common, where the company distributes additional shares to shareholders instead of cash.

Over the past few years, there has been a noticeable trend in how companies are choosing to distribute dividends, with some shifting from cash dividends to stock dividends.

Types of companies that usually pay dividends

Not all companies pay dividends, but the following types of companies tend to be more inclined to do so:

• Established companies: companies that have established a solid position in the market and have a stable cash flow.

• Blue-chip companies: those that are top performers in their respective industries and have a strong financial position.

• Utilities companies and consumer goods companies: Companies in these sectors usually have predictable income streams and are therefore more likely to pay dividends.

By investing in US dividend stocks, Malaysian investors can gain exposure to some of the world's most successful companies while enjoying the benefits of a steady income stream.

Why invest in US Dividend stocks?

Investing in US dividend stocks offers significant advantages to Malaysian investors in terms of diversifying their portfolios, seeking stable returns and coping with the uncertainties of the current economic environment. Emphasizing the long term in investment strategies can help investors focus on companies with stable income streams and strong dividend track records, ultimately yielding better results.

Stable income and growth

US dividend stocks provide a regular and predictable stream of income that can help offset the volatility that often characterises equity markets, which can be attractive in times of economic uncertainty. Unlike some stocks that may be more focused on capital appreciation, US dividend stocks typically strike a balance between income and potential capital gains.

Diversification

By investing in US dividend stocks, Malaysian investors have access to a wide range of industries and companies that may not be available domestically. This diversification helps to reduce risk and can lead to better overall returns. In addition, US equities offer the opportunity to invest in the world's largest economy, which is beneficial in today's interconnected financial markets.

Strong financial position

Companies that consistently pay dividends tend to have a strong financial foundation. They typically have solid balance sheets, stable earnings, and strong cash flow - all necessary attributes for long-term success.

Reinvestment opportunities

Many US dividend stocks offer Dividend Reinvestment Plans (DRIP), which allow investors to automatically reinvest dividends back into the company. This reinvestment can increase over time, resulting in an exponential increase in the value of the investment.

Risks of US Dividend Stocks

For Malaysian investors, US dividend stocks, while offering attractive yield potential and investment stability, come with a specific set of risks.

Market volatility

While dividend stocks are generally considered more stable than other stocks, they are still subject to market volatility. Economic downturns, geopolitical events and changes in interest rates can all affect the performance of US dividend stocks.

Currency exchange rate fluctuations

As dividends are paid in US dollars, Malaysian investors are exposed to the risk of exchange rate movements. If the US dollar strengthens against the Malaysian Ringgit, the purchasing power of dividends received will be reduced, which may lower the overall return on investment.

Dividend cuts

While the company strives to maintain a consistent dividend payment, there is always a risk that the company will cut its dividend due to financial difficulties or a shift in strategy. This could negatively impact income streams that investors rely on.

Tax implications

Dividends received from US equities may be subject to withholding tax in the US and may have additional tax implications in Malaysia. It is important for investors to be aware of the tax treaties between the two countries to minimise the tax impact on their returns.

Top US High Dividend Stocks to Invest

In 2024, Malaysian investors may be interested in some of the best dividend stocks in the US, which are good investment options due to their solid dividend payment record and good market reputation. Below are the top 10 US dividend stocks:

[Total Market Cap (by 30 August 2024), YTD % change (until 30 August 2024)]

1. Chevron Corporation (CVX)

Industry: Energy

Total Market Cap: 267.02 billion

YTD % change: 1.07%

Dividend Yield: 4.30%

Chevron Corporation (CVX) is an energy company whose shares are listed on the New York Stock Exchange (NYSE). The company provides a range of services including exploration, production, refining, marketing and transportation. Chevron has a record of more than 30 years of consecutive dividend increases and payments, demonstrating its commitment to shareholder returns and the company’s financial stability. As of August 2024, Chevron has a dividend yield of 4.30%, making it a strong candidate to buy for investors seeking reliable dividend income.

2. Opera Limited (OPRA)

Industry: Technology

Total Market Cap: 1.29 billion

YTD % change: 17.03%

Dividend Yield: 5.56%

Opera Limited (OPRA) is a global browser and Internet technology company that offers a wide range of Internet services including the Opera browser, Opera News service and Opera GX gaming browser. In addition to its core browser business, Opera has diversified its revenue streams through its digital advertising solutions. Over the past few years, Opera has demonstrated strong financial performance and the company’s financial strength supports its ability to pay a dividend. As of August 2024, Opera has a dividend yield of 5.56 %.

3. Helmerich & Payne, Inc. (HP)

Industry: Energy

Total Market Cap: 3.22 billion

YTD % change: -6.71%

Dividend Yield: 5.34%

HHelmerich & Payne, Inc. (HP) is a company focused on providing contract drilling services for oil and gas drilling. The company provides services such as drilling, completions, and maintenance covering all phases of oil and gas exploration and development. HP has more than 80 years of industry experience and over 20 years of dividend growth and payment history, demonstrating the company’s profitability and commitment to shareholder returns. Over the years, HP has shown consistent long-term performance, and as of August 2024, HP has a dividend yield of 5.34%.

4. Altria Group, Inc. (MO)

Industry: Consumer Staples

Total Market Cap: 90.81 billion

YTD % change: 37.82%

Dividend Yield: 7.37%

Altria Group, Inc. (MO) is an American tobacco products company that includes well-known cigarette brands such as Marlboro, as well as other tobacco products and newer products such as e-cigarettes. MO has a history of stable dividend growth and payment for more than 30 years. MO’s dividend payout is supported by the company’s strong financial position, with a high level of profitability and cash flow generation. As of August 2024, MO has a dividend yield of 7.37%.

When comparing Altria Group's performance with the S&P 500, it is evident that while the S&P 500 has shown strong historical annual returns, MO's high dividend yield offers a compelling advantage for income-focused investors.

5. NextEra Energy Partners, LP (NEP)

Industry: Renewable Energy

Total Market Cap: 2.29 billion

YTD % change: -11.25%

Dividend Yield: 14.24%

NextEra Energy Partners, LP (NEP) is a US-based energy company specialising in renewable energy projects, including wind and solar power. As the global demand for renewable energy continues to grow, NEP is expected to benefit from this trend. The company manages a portfolio of renewable energy projects that generate steady cash flows and typically ensure reliable income to support its dividend payments. As of August 2024, NEP has a dividend yield of 14.24%.

6. Columbia Banking System (COLB)

Industry: Banking

Total Market Cap: 5.2 billion

YTD % change: -1.76%

Dividend Yield: 4.35

Columbia Banking System (COLB) is a bank holding company headquartered in the state of Washington. COLB provides a wide range of banking services to personal, small business, and commercial customers in the Pacific Northwest region of the United States. These services include, but are not limited to, commercial lending, personal lending, deposit products, mobile and online banking solutions, and a variety of investment and insurance products. COLB has been delivering value to its shareholders through consistent dividend payments for more than 20 years. As of August 2024, COLB has a dividend yield of 4.35%.

7. Rio Tinto Group (RIO)

Industry: Mining

Total Market Cap: 102.31 billion

YTD % change: -9.33%

Dividend Yield: 6.9%

Rio Tinto Group (RIO) is a mining company focused on the extraction of minerals such as iron, aluminium, copper and diamonds, and the company has operations across the globe. Demand for minerals such as copper and aluminium is expected to continue to grow as the global demand for sustainable energy and electric vehicles increases, providing growth opportunities for the company. RIO has a history of consistently paying dividends for more than 20 years, and as of August 2024, RIO has a dividend yield of 6.90%.

8. Ternium S.A. (TX)

Industry: Steel Manufacturing

Total Market Cap: 6.63 billion

YTD % change: -16.14%

Dividend Yield: 9.77%

Ternium S.A. (TX) manufactures and sells steel products, including flat steel and long steel, serving a variety of industries, including construction, transportation, energy and agriculture. The Company provides a broad range of value-added products and services to a variety of customers through its fabrication operations. TX has a track record of paying continuous dividends, and as of August 2024, TX has a dividend yield of 9.77%.

9. Verizon Communications Inc. (VZ)

Industry: Telecommunications

Total Market Cap: 174.65 billion

YTD % change: 15.58%

Dividend Yield: 6.41%

Verizon Communications Inc. (VZ) is a telecommunications service provider offering a wide range of services, including wireless communications, broadband Internet, television and voice services. Verizon generates a steady stream of revenue from its diverse portfolio of services, including wireless subscriptions, broadband and enterprise solutions. Verizon has been delivering value to shareholders for more than 20 years through consistent dividend payments. As of August 2024, Verizon has a dividend yield of 6.41%.

10. Alliance Resource Partners, L.P. (ARLP)

Industry: Coal Mining

Total Market Cap: 3.06 billion

YTD % change: 24.07%

Dividend Yield: 11.71%

Alliance Resource Partners, L.P. (ARLP) is a US-listed partnership specializing in the mining and marketing of coal, primarily serving utilities and industrial users in the U.S. ARLP produces a wide range of thermal and metallurgical coals through the operation of multiple mines in different regions. ARLP has delivered value to its holders through consistent dividend payments for more than 20 years. As of August 2024, ARLP has a dividend yield of 11.71%.

Invest US Dividend Stocks with Moomoo

For Malaysian investors looking to tap into the potential of US dividend stocks, moomoo provides a user-friendly platform that simplifies the investment process. Below are some of the features that make moomoo particularly useful:

Dividend Calendar

One of the standout features of the Moomoo MY Platform is its comprehensive dividend calendar. This tool clearly displays upcoming dividend payment dates, enabling investors to plan their investments and cash flow management effectively. By keeping tabs on when dividend payments are due, investors ensure that they do not miss out on the opportunity to receive dividends.

Screening Tools

Moomoo's screening tool allows investors to quickly locate high dividend-yielding stocks based on key metrics such as dividend yield. This feature is useful for identifying companies that provide a source of income through dividends, making it easier to build portfolios that meet investors' income goals.

Customizable Watchlists

Moomoo's platform allows investors to create personalized stock watch lists based on their preferences and needs. With this feature, investors can not only track the performance of the stocks they are watching in real-time but also receive timely alerts on major price changes or news updates, making investment decisions more timely and accurate.

Conclusion

In summary, US dividend stocks offer attractive investment opportunities for Malaysian investors seeking a stable source of income and capital appreciation potential. These stocks offer a unique combination of regular dividends, capital growth potential, and diversified income that can significantly contribute to a well-rounded portfolio. Investing in US dividend stocks requires careful consideration of a variety of factors, including stock-specific characteristics, the broader economic environment, and personal financial goals.

Malaysian investors must develop a sound investment strategy that is consistent with their risk tolerance and long-term objectives. While US dividend stocks offer attractive prospects, it is important to recognize their inherent risks, such as market volatility, currency fluctuations, and dividend policy changes. Proper risk management, including diversification across different industries and regions, can help mitigate these risks. By carefully evaluating returns and risks and utilizing platforms such as moo-moo, Malaysian investors can harness the potential of US dividend stocks to achieve their financial goals. Remember to conduct thorough research, consider professional advice, and take a long-term view of your investments.

Disclaimer:

Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In Malaysia, investment products and services available through the moomoo app are offered through Moomoo Securities Malaysia Sdn. Bhd. ("Moomoo MY").

This content is for informational purposes only and does not constitute a recommendation or solicitation for any financial products or services. Past performance does not guarantee future results. All investments carry risks, including loss of principal. This content does not consider your investment objectives or financial situation. Please consult your financial adviser as to the suitability of any investment. Full disclaimers at https://www.moomoo.com/my/support/topic9_37.

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