Here are examples of stocks that pay Qualified Dividends, and those that commonly pay Non-Qualified (ordinary) Dividends...
Qualified Dividend Stocks:
Most big, regular companies in the U.S. that are listed on the stock market pay qualified dividends. These dividends get a lower tax rate if you hold the stock long enough (usually more than 60 days around the payout period).
Examples:
- Johnson & Johnson (JNJ)
- PepsiCo (PEP)
- ExxonMobil (XOM)
- Merck (MRK)
- Lockheed Martin (LMT)
- These are called "qualified" because the companies are U.S.-based, the dividends are paid on common stock, and you meet the holding period rule.
Non-Qualified (Ordinary) Dividend Stocks
Non-qualified dividends (also called Ordinary Dividends) are usually paid by certain types of companies—like Real Estate Investment Trusts (REITs), some foreign companies, business development companies (BDCs), and money market funds. These are taxed at your normal income tax rate, which is usually higher than the rate for qualified dividends.
Examples:
- Oxford Square Capital Corp. (OXSQ)
- Armour Residential REIT Inc. (ARR)
- Prospect Capital Corp. (PSEC)
- Horizon Technology Finance Corp. (HRZN)
- Many money market mutual funds or bond funds (check with your fund provider)
If you're getting a dividend and you want to know what kind it is, look for info from the company's investor relations page or your broker's tax summary.