If you are an investor looking for sources of regular income, dividend stocks are a good option. Read on to learn about the best dividend stocks to buy now and how dividends work.
First, let’s see how dividend stocks become a consistent source of income. In this type of stock, investors receive a percentage of the company’s total profits. So, your stocks keep a specific amount of money coming into your account regularly.
It’s common among companies to pay investors a quarterly dividend. Furthermore, renowned companies also provide an increment on the dividend. Hence, investors play an annuitant-like role in the business.
Overall, dividend stocks are a low-risk type of investment. This owes to the fact that involved companies are renowned and well-established.
Comparing Dividend Stocks with Dividend Funds
To start, we’ll tell you about the two types of dividend fund investments you can make.
In the first type, you can buy single dividend stocks individually. Whereas with the second type of investment, you can buy mutual funds having multiple stocks.
These can be of two types:
- Index funds
- Exchange-traded funds
These fund investors can access various dividend stocks through a single investment. In easier words, you can buy a whole portfolio containing multiple dividend stocks. As a result, this index fund will provide you with regular cash flow from each stock.
Mutual funds have one edge over individual ones. That is instant diversification. Due to this, you can count on multiple sources of independent income.
Hence, the loss of funds from one dividend won’t affect your other revenues because other stocks will still provide regular cash flow.
Be it dividend stocks or funds; you’re sure to get an improved return if you reinvest them. For example, divided fund returns typically increase by a small percentage thanks to dividends.
For example, S&P 500 bagged a total annual return of almost two percentage points greater than their index’s annual change in value.
However, buying individual stocks has its own set of perks. Such investors can customize their portfolios and have a higher chance of attaining a high yield. Furthermore, ETF’s also charge investors an expense fee. Hence, individual stocks are also a more economical option than mutual funds.
So, the best dividend stocks to buy now are dependant on your current priority and investment goals.
Dividend Aristocrats
A good way to invest in dividend stocks is to search for high-yield stocks. First, however, you need to stay consistent in your efforts.
This is where Dividend Aristocrats come into the picture. The market index S&P 500 Dividend Aristocrats comprises only the S&P 500 companies.
The inclusion criteria for companies is as follows,
- An annual increase in dividends for at least the past 25 years
- A three billion dollar float-adjusted market cap
- A trading value averaging at five million dollars
The index is required to include at least 40 companies. In addition, a single company is allowed only 30% of the total index weight.
Making an Investment in Dividend Stocks
Here is how you can build your portfolio for individual stocks.
Search for a Dividend-paying Stock
One way to find stocks that pay dividends is to search the internet. You will find the relevant data on financial websites. Moreover, your broker’s website will also have plenty of information on such stocks.
Scrutinize the Stock
Once you have selected the highest monthly dividend stocks, it’s time to assess them. To do this, compare your stock with its peers. If its dividend yield is way higher than others, you must do thorough research on it. But, again, this is because your goal is to find safe, high dividend stocks.
Next, check the payout ratio of that stock. You can know the percentage of the company’s income given to dividends by this.
A high payout ratio is also a red flag. This means the company has to subside a greater portion of its income to pay off investors. In addition, a payout ratio of over 100% means the company is in debt, as it is taking loans to make payments.
Decide How Much You’re Willing to Invest
Diversification is key when you’re investing in individual stocks. So, when choosing the best dividend stocks to buy now, you must keep this in mind.
You need to decide how much of your portfolio you want to put into each stock for a profitable investment. For example, you buy eight stocks. These two are risky, so you will want to invest less in them.
Hence, you could put only 2% of your portfolio in these. But, at the same time, the majority of your portfolio could go into the promising ones.
Another important thing is the dividend yield. Now you must be wondering, “ what is dividend yield”?
It’s a financial ratio. It’s a percentage of the share price annually paid as dividends.
High dividend yields shouldn’t be trusted. Because these often indicate unsustainable payouts and sometimes can also mean the stocks are being sold by investors.
25 Stocks Having a High Dividend That You Should Invest in
3M Co.
3M (MMM) is a versatile enterprise that manufactures and delivers products internationally. The company has four divisions to manage various aspects of its business, which are:
- Safety and Industrial
- Consumer
- Transportation and Electronics
- Healthcare
Furthermore, it’s also involved in the residential cleaning industry. For this, it has collaborated with Merry Maids. In addition to this, another collaboration is with The Infectious Disease Research Institute and the Duke Human Vaccine Institute.
It plans on creating vaccinations against multiple SARS variants to provide health solutions against Covid-19.
The company’s estimated growth in the next year is 5.70%. In addition to this, the total enterprise value is $111.6 billion, and it has a 3.48% annual dividend yield.
Hence it’s one of the outstanding dividend stocks to buy now.
ALLETE Inc.
ALLETE Inc. (ALE) is a business that deals with energy through sectors such as ALLETE Clean Energy. Its services are sourced by four forms of energy (hydroelectricity, wind, natural gas, and solar).
The company has customers in multiple sectors, with at least 15000 electric consumers and more than 10000 water and gas consumers only in Wisconsin.
In addition, its services spread through Michigan, Minnesota, and to North Dakota, where it operates its coal mining.
The current enterprise value is $5.08 billion with an annual dividend yield of 4.14%. Furthermore, its quarterly revenue growth is 17.50%.
American Electric Power Co Inc.
American Electric Power Co Inc. (AEP) stands with an enterprise value f $76.55 billion. The company specializes in providing electric utility services. Its various operating segments are as follows:
- Transmission and Distribution Utilities
- AEP Transmission Holdco
- Generation & Marketing segments
- Vertically Integrated Utilities
It generates and provides electric supply to several residential and wholesale customers. The electricity is generated through various energy sources, including lignite and nuclear energy.
With a forward annual dividend yield of 3.84% and quarterly revenue growth of 13.70%, it’s one of the best high yield dividend stocks to buy now.
Calavo Growers Inc.
Calavo Growers (CVGW) is a worldwide distributor of perishable goods. It mostly supplies these items to mass merchandisers, wholesale, and foodservice customers in addition to others all over the globe.
It has three subdivisions:
- Calavo Foods
- Renaissance Food Group
- Fresh Products
Each of these segments is involved in growing and distributing fresh avocados and vegetables in various forms.
The Californian enterprise is worth $835.51 million. Furthermore, its forward annual dividend yield is 2.83%. For the prior 12 months, the company’s revenue has been $1.02 billion with an operating cash flow (ttm) of $29.92 million.
Chevron Corp.
The Chevron Corp. (CVX) currently has an enterprise value of $248.89 billion, thanks to its worldwide petroleum and energy trades.
Two of its segments are engaged in supplying and refining crude oil. At the same time, other segments are knee-deep in the finance and technology sector.
In 2005 the enterprise changed its name from ChevronTexaco Corporation to Chevron Corp. and has operated under this name from California ever since.
Its forward annual dividend yield is 4.66%, and operating cash flow (ttm) is $21.97 billion. Hence, it’s one of the best dividend stocks to buy and hold at the moment.
Edison International
The (EIX) $54.71 billion enterprises operate from Southern to Coastal California. Furthermore, it has served up to 15 million customers throughout this geographical plane.
The company specializes in generating and providing electric power to residential, industrial wholesale, and agricultural companies.
The Rosemead-based network has a forward annual dividend yield of 4.05% and a quarterly revenue growth of 14.10%.
Furthermore, its dividend payouts ratio is 130.54% making it the company with one of the highest dividend-paying stocks in the world. In addition to this, it offers the most profitable dividend stocks to buy now, considering its payout ratio.
Equity Residential
Equity Residential (EQR) is an S&P 500 member company that offers residential estates for rent. The business currently owns 305 properties that have more than 70,000 apartment units.
The properties are located around important cities like Boston, San Francisco, and New York.
According to statistics, the enterprise value is $39.45 billion. In addition, its forward annual dividend yield is 2.82%.
With its dividend payouts ratio at 88.1%, the company has some of the best dividend stocks to buy now for you.
Eversource Energy
As the name states, Eversource Energy (ES) is involved in the energy delivery business. It conducts its utility delivery through four segments:
- Water Distribution segments
- Electric Transmission
- Electric Distribution
- Natural Gas Distribution
The company is currently serving 216,000 customers through its water utilities. It currently has an enterprise value of $48.67 billion. Its quarterly revenue growth is (ttm) 3.80% and a forward annual dividend yield of 2.90%.
Hasbro Inc.
Hasbro Inc. (HAS) is a big name in the entertainment industry. From action figures to board games, they make it all. In addition, it has spread its roots from Europe and Asia to South Africa. Furthermore, it also has segments serving film and television content and merchandising.
The enterprise value is $16.46 billion in addition to its 10.90% quarterly revenue growth. Moreover, the forward annual dividend yield of the company is 2.77%, with a payout ratio of 83.18%.
Considering the payout ratio and overall profile, these are some of the best dividend stocks to buy now.
Iron Mountain Inc.
Iron Mountain Inc. (IRM) is a leading name in real estate. Through its different segments, it has spread its services across 50 countries. It specializes in the secure storage of records and management of information.
Since its birth in 1951, it has provided customers with a more digital approach to their work.
At this time, the enterprise value of Iron Mountain Inc. is $24.20 billion. In addition, its quarterly revenue growth is 9%, and it provides a forward annual dividend yield of 5.26%.
With a 112.45% payout ratio on dividends, you’ve got a good deal as an investor here.
J.M. Smucker Co.
J.M. Smucker Co. (0L7F.L) is a big name in the branded food industry. It carries out its business through four sectors:
- International and Away From Home
- U.S. Retail Coffee
- U.S. Retail Pet Foods
- U.S. Retail Consumer Foods
It provides frozen food for humans and specializes in pet food manufacturing as well. The Ohio-based enterprise has a market value of $18.32 billion with a forward annual dividend yield of 3.10%. In addition, the company’s payout ratio is 52% making them the best long-term dividend stocks to buy now.
Kimberly-Clark Corp
Kimberly-Clark Corp (KMB) produces tissue and personal care items to be delivered worldwide. It has three operational segments:
- Consumer Tissue
- K-C Professional
- Personal Care
It currently has an enterprise value of $53.02 billion and a forward annual dividend yield of 3.43%. In addition, the company offers a payout ratio of 76.36%, giving you a major benefit as an investor.
Lamar Advertising Co.
Lamar Advertising Co. (LAMR) is North America’s most gigantic advertising company. Its billboards and outdoor advertising forums allow brands an extensive opportunity to reach their audience regularly.
Moreover, the company is up-to-date with modern technology with its 38000 digital displays around the US.
The current enterprise value of Lamar is $15.27 billion, and its forward annual dividend yield is 3.60%. In addition, the companies quarterly revenue growth is a solid 23.80%. Moreover, the payout ratio is an ideal 81.30% as well.
National Presto Industries Inc.
The Industry (NPK) provides safety products and common household appliances. It operates through three segments:
- Houseware Designs (Presto Control Master)
- Defense Segment
- Safety Segment
The overall enterprise value of National Presto Industries Inc. is $461.68 million. Along with this, the company has a forward annual dividend yield of 1.21% and a 19.38% payout ratio.
NorthWestern Corp.
NorthWestern Corp. (NWE) specializes in providing electricity and gas to various customers and consumers. It conducts business through two segments:
- The Electric Segment
- The Gas Segment
It was established in 1921 and is currently at an enterprise value of $5.53 billion. Its quarterly revenue growth is 16.20%, and its forward annual dividend yield is 4.45%.
Moreover, it has a solid 66.67% payout ratio, making it ideal for investors.
Omnicom Group Inc.
Omnicom Group Inc. (OMC) has made its name in the communication industry thanks to advertising and corporate-level services. Its business is spread all through Australia to Asia and Africa as well.
However, its headquarters are still in New York, where it came into existence in 1944. Its enterprise value is $15.99 billion, and it has a forward annual dividend yield of 4.05%.
In addition to this, its payout ratio is 42.83% which is quite practical and lands it among the safe dividend stocks to buy these days.
ONEOK Inc. b
ONEOK Inc.(OKE) is a leading natural gas transporter in the United States. The company has a total of three segments:
- Natural Gas Liquids
- Natural Gas Gathering and Processing
- Natural Gas Pipelines
The company has not only interstate gas pipelines but also intrastate ones. It currently has an enterprise value of $41.9 billion. In addition, its quarterly revenue growth is an astounding 108.6%, with a 6.16% forward annual dividend yield. Moreover, the company’s payout ratio is 116.6%.
Philip Morris International Inc.
Philip Morris International Inc. (PM) is in the nicotine business. Its various segments are involved in producing and selling cigarettes and related products.
Various brands such as Marlboro, L&M, and Bond Street sell their products. Thanks to its widespread business worldwide, the company has an enterprise value of $159.86 billion. Moreover, the quarterly revenue growth is at 9.10%, in addition to a 5.69% forward annual dividend yield. Furthermore, its payout ratio is 84.49%.
Phillips 66
Phillips 66 (PSX) is a logistics company involved in energy production and manufacturing. It has four sectors to streamline its various services:
- The Midstream segment
- The Chemicals segment
- The Refining segment
- The M&S segment
The enterprise currently has a value of $42.32 billion with quarterly revenue growth of 89.6%. It also offers a forward annual dividend yield of 5.16%.
Pinnacle West Capital Corp.
The Pinnacle West Capital Corp. (PNW) is an Arizona-based electric service provider. It is centered in Arizona, and its subsidiary is the Arizona Public Service Company.
It mainly generates, distributes, and transmits electricity using natural resources like hydro and solar.
Its enterprise value is currently $15.09 billion, and the quarterly revenue growth the company achieves is 4.20%. Furthermore, it has a forward annual dividend yield of 5.19%. In the end, the payout ratio is a handsome 65.87%.
Principal Financial Group Inc.
Principal Financial Group Inc. (PFG) has all your assets covered and managed thanks to its excellent services. Furthermore, it also provides insurance services on various levels. It has three sections that deal with various parts of the business:
- The Retirement and Income Solutions
- Principal International and U.S. Insurance Solutions
- Principal Global Investors
The Iowa-based company has an enterprise value of $19.17 billion with quarterly revenue growth of 3.40%. Next, its forward annual dividend yield stands at 3.65%, with a safe payout ratio of 37.94%.
Regency Centers Corp.
Regency Centers Corp. (REG) is responsible for providing you with the majority of your shopping experiences. They own and manage multiple shopping centers and malls in highly populated areas.
In addition, they also have an S&P 500 Index member real estate investment trust by the name of Regency Centers.
The company’s overall enterprise value is $15.37 billion, and its quarterly revenue growth is 28.10%.
Furthermore, it offers a forward annual dividend yield of 3.48% with a 122.68% payout ratio.
Safety Insurance Group Inc.
The name Safety Insurance (SAFT) makes its services pretty clear. The company provides insurance for automobiles, homeowners in the US. In 2002, Safety Holdings Inc converted its name to Safety Insurance Group Inc.
Its enterprise value is currently $1.18. Furthermore, it has a forward annual dividend yield of 4.62%. In the end, the payout ratio is a handsome 35.36%.
Sempra Energy
Sempra (SRE) is a multi-national energy service holder company. It supplies natural gas and electricity through two of its sectors:
- San Diego Gas & Electric Company
- Southern California Gas Company
Formerly known as Sempra Energy, the company currently holds an enterprise value of $64.33 billion, and its quarterly revenue growth is 14%.
Furthermore, it offers a forward annual dividend yield of 3.56% with a 123.44% payout ratio.
WEC Energy Group Inc.
WEC Energy Group Inc. (WEC) is a gigantic provider of multiple energy sources, including non-renewable energy.
It currently has six operational segments,
- Electric Transmission
- Non-Utility Energy Infrastructure
- Corporate and Other
- Illinois
- Wisconsin
- Other States
The Wisconsin-based enterprise is currently worth $43.45 billion, and the quarterly revenue growth the company achieves is 5.80%. Furthermore, it has a forward annual dividend yield of 3.05%. In the end, the payout ratio is a practical 64.22%.
Investing in Safe Dividend Stocks
Here are some safe dividend stocks to invest in
Ally Financial
Ally Financial (ALL) holds the title of the US’s top auto financing company. Other services offered by the franchise include:
- Ally Bank
- Ally Invest
- Insurance
- Mortgage and loan provision
Its overall market value is $20.1 billion, and it offers a dividend yield of 1.8%. In addition to this, its estimated dividend growth over the next 12 months is 31.6%.
Hence, it is among the top dividend companies to invest in currently.
Evercore
Evercore (EVR) is a firm that specializes in advisory and investment banking. Since June 30th, the management has possessed assets worth $11 billion under its wealth management division.
In the last four quarters, the company has delivered much higher earnings than expected.
The impressive growth of the company owes to several factors:
- Its macroeconomic backdrop
- Geographical business expansion strategy
- Fortification of investment banking
- Low-interest rates
- Favorable market situation
Currently, the company holds a market value of $6.5 billion, and its dividend yield is 1.7%. In addition, its estimated dividend growth over the next 12 months is
Goldman Sachs
The investment bank has an estimated dividend growth of 58.9%. Furthermore, it has a free cash flow percentage of 4,116%. Since early 2020, the company has focused on increasing its revenue on incumbent businesses by at least two billion dollars.
In addition to this, Morningstar analyst Michael Wong reported a 1 billion dollar increase in new businesses.
Its market value is $137.5 billion, and its dividend yield is 1.9%. Additionally, the company’s estimated dividend growth in the next 12 months is also promising.
Hershey
The North-American chocolate manufacturers are at the top of the financial game. The company gets its name from its hallmark chocolate bar. However, that isn’t the only sweet treat they make.
Hershey is the hub of various sweets and candies like:
- Jolly rancher
- Almond Joy
- Twizzlers
- Bubble yum
- Cadbury
- Reese’s
Its headquarters are in Pennsylvania and are a kid’s dream destination. They have a museum called ‘Hershey’s Chocolate World.’In addition, they have their very own theme park with joy rides and fun activities.
In addition to children, Hershey has a fair share of sweetness to offer to dividend investors. Thanks to its 12.1% quarterly payout, it has the safest stocks to buy.
As the public stayed indoors and entertained themselves with candy, the company achieved substantial improvement in its second-quarter earnings.
Currently, the business has a market value of $37.0 billion. Moreover, its dividend yield is 2%. Therefore, with its dividend yield estimated at 11.1%, the company has one of the best dividend stocks to buy now.
HP
HPQ is the former Hewlett-Packard’s grandchild and a leading name in the PC (personal computer) and printing industry. As a result, it is often mistaken for HPE.
To clear the air Hewlett-Packard split up in 2015, and HP and HPE were born. Now, HPE is focused on cloud and storage while the PC business is dealt with by HPQ.
Nevertheless, the company has a market value of $33.0 billion. Its dividend yield stands at 2.7%. Furthermore, its estimated dividend growth over the coming 12 months is 10%, making it one of the best dividend stocks to buy now.
Jefferies’s Financial Group
Jefferies’s Financial Group (JEF) is an investment banking firm specializing in commercial mortgage banking, foreign exchange trading, vehicle financing, capital markets, etc.
The company has kept diversification as its main growth strategy. However, the quality of services hasn’t suffered due to this. Its revenue which went up by 19% in the third quarter is proof of that.
The company’s five-year dividend history has scored a nine, in addition to a 24% increase in dividend payouts.
The company’s market value stands at $10.3 billion. In addition, its dividend yield is 2.4%, with a 50% growth estimated in the next 12 months.
Lowe’s
Lowe’s (LOW) is a business that specializes in home improvement. It has been in the top-tier for the past year and a half, thanks to Covid-19. With more people working from home and social distancing, the industry has become the public’s favorite.
The company offers the safest stocks to buy owing to a 23.% estimated dividend growth. In addition, it has a solid ten five-year dividend growth score. Furthermore, the enterprise’s free cash flow-to-dividend ratio is 330.4%.
Overall the business is worth $155.8 billion with a dividend yield of 1.4%.
MDC Holdings
MDC Holdings (MDC), the predecessor of Richmond American Homes, is a home-building business. But, thanks to its good growth strategies and current trends, it has made it to the safest stocks.
Various economic and cultural factors have benefited the business, such as low-interest rates, remote working, downsizing, etc.
The $3.6 billion company pays a 3.3% dividend which is comparatively higher than others in the field. Furthermore, the payout has doubled in the previous five years, making them safe stocks to invest in currently.
Morgan Stanley
Morgan Stanley (MS) is a $181.1 billion investment bank specializing in the tech industry. Furthermore, it has made recent acquisitions of enterprises like David Konrad and Smith Barney, etc. This indicates the company’s wealth and investment management.
With its quarterly dividend doubling to 70 cents per share and an EPS growth of 35.6%, the company offers the best and safest dividend stocks to buy now.
Furthermore, it has raised its dividends exponentially, considering its five-year payout score is a solid 9.
Nexstar Media Group
Nexstar Media Group (NXST) is USA’s most renowned television broadcaster. It has 199 stations spread throughout 39 states. 82.5 million households in America have access to its channels.
The company’s market value is $6.4 billion, with a dividend yield of 1.9%. In addition, ts net revenue (YoY) saw a 24% increase, and the free cash flow-to-dividend ratio is a sturdy 474%.
Moreover, it has almost doubled its net income to $199.8 million.
All this success is due to its rapid growth and the introduction of new markets. The company has recently moved into the digital network and launched its news channel. At the rate it’s going, the future seems bright for investors, making them the safest stocks to buy.
Stanley Black & Decker
Stanley Black & Decker (SWK) is involved in the tools business. More specifically, it specializes in household power tools. In addition to this, industrial equipment and security services are also part of the business.
In August, the company announced that it would purchase the remaining stake in MTD Holdings for $1.6 billion.
The annual revenue of these companies totals up to $17 billion. Furthermore, the purchase of the remaining MTD stocks seems promising for the company’s future.
These are Wallstreet’s safest stocks to buy, so if you’re looking for dividend stocks to buy now or shortly, Stanley Black & Decker is a good option.
This is because the company has a market value of $30.6 billion, and its dividend yield is 1.7%. Furthermore, its estimated dividend growth over the coming 12 months is 10%.
Target
TGT has made a special place in the market with its services. In addition, investors have profited greatly in the last five years. With improvements in the Covid situation, an even higher surge in the company’s demand is expected.
The upcoming ease of Covid restrictions will positively impact the enterprise’s growth. We will see this in the form of ‘Back-to-work’ and ‘Back-to–School’ seasons.
Overall the company holds a market value of $123.1 billion, and its dividend yield is 14.1%. Furthermore, Target’s estimated dividend growth over the coming 12 months is 25.9% making it one of the best dividend stocks to buy now.
United Parcel Service
Up till now, the best shareholder payouts have been provided by UPS. In 2020, the business will pay up to $3.6 billion in dividends. In 2021 it produced free cash flow by paying up dividends of up to $1.7 billion.
The company’s quarterly dividend increased in February by one percent. Currently, the company is leading in the business, thanks to the pandemic.
As people shift their dealings online and keep physical interactions to a minimum, the future seems bright for UPS. However, experts expect moderation in these trends as things go back to normal post-vaccination.
Nevertheless, the company’s current market value is an impressive $170.1 billion, and it has a dividend yield of 2%. Furthermore, its estimated dividend growth over the coming 12 months is 10%, making it one of the best dividend stocks to buy now.
