Best Dividend Stocks

When selecting dividend stocks to invest in, there are a few things to consider: the strength of the business, payout stability, and high yield.

Though some of these criteria may seem obvious, many investors need to consider them together. Dividend growth can be an excellent tool for portfolio protection from economic ups and downs and provide extra income during recessions or other times of financial strain.

Cintas (CTAS)

Cintas (CTAS) has been increasing its Dividend annually for 47 years, most recently increasing it by 21.1% to $1.15 per share in July 2024.

CTAS has also been successful in acquiring smaller uniform rental companies, propelling it to double the size of its rivals within the industry.

Amcor (AMCR)

Amcor (AMCR) is a leader in responsible consumer packaging design and production and offers services related to plastics recycling and waste management.

The company pays out a significant portion of its earnings to shareholders through dividends and share repurchases. This strategy should result in solid per-share growth over the coming years.

Pentair (PNR)

Pentair (PNR) has been a reliable Dividend Stock that has created significant shareholder wealth over time. Its earnings-per-share growth rate has remained consistent for over a decade, and the company has been increasing its Dividend at an annualized rate of 5.5% during this time.

Dividend Aristocrat has exceeded EPS estimates three times in the last four quarters, suggesting that this trend will likely continue.

Walgreens Boots Alliance (WBA)

Walgreens Boots Alliance (WBA) is a dividend stock that has increased its payout for 47 consecutive years, earning it the title of one of the Dividend Aristocrats and making it an excellent choice for dividend growth investors.

As a dividend investor, you should seek stocks with solid fundamentals that can provide high returns in the long run. Furthermore, avoiding stock returns that fluctuate annually would be best, as these can negatively affect your investments.

American Express (AXP)

Established in 1850, American Express is a worldwide payments firm. It issues credit cards and operates its processing network.

Additionally, it pays a quarterly dividend yielding 1.15% – slightly more than you’d get from an average credit card company but still a little more.

Shares of AXP have gained 25% year-to-date, making it a top holding of Berkshire Hathaway (BRK.A). Despite its modest Dividend, Osteen finds AXP an attractive value play.

IBM (IBM)

IBM (IBM) is a technology company that offers hardware, software, cloud computing services, and cognitive computing. Established in 1911 in Armonk, New York, the company is headquartered there today.

Dividend Aristocrat: For decades, this Dividend Aristocrat has raised its Dividend annually. Furthermore, it repurchased stock worth more than $14 billion back to shareholders in recent years.

NextEra Energy (NEE)

NextEra Energy (NEE) is a dividend stock that offers investors security when investing in the energy sector. Its diversified business model provides ample room for growth as the industry transitions from fossil fuels.

Florida Power & Light, a regulated electric utility, and NextEra Energy Resources, an industry leader in renewable energy generation, form the two primary businesses of NEE. With this combination of stability and growth, it should be possible for NEE to sustain its above-average payout ratio and continue increasing its quarterly distributions at an even pace.

Realty Income (O)

For investors seeking a high dividend stock with growth potential, Realty Income (O) is an excellent option. This monthly dividend stock has been increasing its payouts at an impressive 4.4% annualized rate for 28 years – making it a Dividend Aristocrat.

This REIT purchases properties and rents them out to various tenants. Generally, its business model involves leasing long-term space to established retail chains that can negotiate lower annual rent increases.

Clearway Energy (CWEN.A)

The AAII Dividend Investing Strategy utilizes dividend stocks to generate income, reduce overall portfolio risk, take advantage of tax advantages, and boost purchasing power through dividend reinvestment programs.

To assist investors in finding the top dividend stocks, AAII created the Dividend Investing Grader. This intuitive A-F grade system assigns reserves an A-F grade based on three “pillars”: dividend valuation, growth, and strength. The DI Grader is an effective screening and strategy tool that condenses data in an actionable and customizable format suitable for all investors.

SYY

Sysco is a dividend growth stock that pays out an ongoing income to shareholders. It has been paying a dividend for over 50 years and has raised it continuously.

It is a renowned food distribution company with an impressive global business, widely held by institutions and analysts. Analysts predict its earnings and dividend yield to increase by up to 7% over the next five years.

While the COVID-19 crisis had its fair share of effects in the market, leading to a stock market correction earlier this year, most companies are now gradually getting back up as the economy opens. This makes it a great time to invest in stocks while the prices are more affordable and can get you more in return.

This is where the dividends and other distributions shine. The best stock is the one that pays the highest dividend yield for many investors. By purchasing stocks that have a high dividend yield, you can get your initial investment back over time.

What is the dividend yield?

Think of the dividend yield is the percentage you will get back in return for your investment. The dividend yield is as basic as it sounds, it’s the dividend per share divided by the stock price.

At the time of writing, the National Health Investors Inc. (NHI) has the highest dividend yield at 6.65 percent. A $100 investment in the company would equal to $6.65 in dividends every year.

However, most dividends aren’t paid annually. Instead, the companies hand out dividends to its shareholders every quarter after reporting the earnings. This is why the dividend yield is what needs to be taken into account rather than the actual dividend amount since it refers to a quarterly amount.

In one of our previous articles, we’ve presented you with the highest dividend stocks which some of you may refer to as best stocks if the dividend stocks is what get your attention.

The bottom line is the best dividend stocks are the ones that have the highest dividend yield. Just like any other investment though, make sure to read the market as the dividend yield is subject to change. As a general rule, if the stock goes up, the dividend yield drops, or vice versa. This is why reading the market is quite important.