best dividend stocks 2023

Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. The company’s strategic investments in projects such as the Oyu Tolgoi copper-gold project in Mongolia and the Rincon Lithium Project in Argentina position it for long-term growth. However, the bank’s CET1 ratio stands at a respectable 14.1%, and it anticipates a return on tangible equity of around 10% for the full year.

Alternatively, maybe you’ll take a softer line on yield because you’d like the income to be reliable. Here, your analysis will touch on dividend yield, but also delve into the company’s dividend track record, sales and cash flow growth performance, dividend payout ratio and return on invested capital. To assist investors in identifying reliable dividend stocks, Forbes Advisor has compiled a list of the top 10 dividend-paying companies in the U.S. stock market. MCD last raised its dividend in October 2022, when it lifted the quarterly payout by 10% to $1.52 a share.

  • Praxair raised its dividend for 25 consecutive years before its merger, and the combined company continues to be a steady dividend payer.
  • Indeed, 67 consecutive years of annual dividend increases is proof positive of the company’s commitment to returning cash to shareholders.
  • It is structured as a Master Limited Partnership, or MLP, and operates as an oil and gas storage and transportation company.
  • Typically, investors view a higher dividend coverage ratio as more favorable.

Automotive and industrial replacement parts maker Genuine Parts (GPC) is best-known for the Napa brand. However, it also has deep roots in Mexico, where it operates under the AutoTodo brand, as well as Canada, where it operates as UAP. Property and casualty insurer Cincinnati Financial’s (CINF) offerings include life insurance, annuities, umbrella insurance and a wide range of business insurance products.

Sales And Cash Flow

The company paid out a first-quarter dividend of 15 cents per share, its 15th consecutive payout. Genco reported a reduced rate of return from its shipping vessels, resulting in a 31% decrease in total revenue in the first quarter. A dividend yield is the percentage of a company’s price per share that it pays in dividends each year, providing a handy ratio for directly comparing different dividend per share amounts separate companies. IBM is an American multinational technology corporation that specializes in computer hardware, middleware and software. The company also provides hosting and consulting services in areas ranging from mainframe computers to artificial intelligence.

With its well-below-average payout ratio, income investors can count on Target to keep hitting the mark for dividend growth. Over the past decade, the company’s dividend boasts a compound annual growth rate of nearly 12%. Happily for the income-minded, Grainger has achieved annual dividend growth for a half century and maintains a below-average payout ratio. It renewed its Dividend Aristocrats membership card in April 2022 when it announced a 6.2% increase in the quarterly payout to $1.72 per share. Kimberly-Clark has raised the annual payout for 51 consecutive years. In January 2023, the board of directors approved a 1.7% increase in the quarterly dividend to $1.18 a share.

Dividend stocks are long-term investments

Including Gates’ investment company, Cascade Investment LLC, the billionaire owns nearly 8% of the company, making him the largest shareholder. One easy way to identify quality dividend stocks is to filter the largest stock indices in the United States, such as the Dow Jones Industrial Average and the S&P 500. Altria continues to grow, which makes its 8.3% dividend yield even more attractive.

Indeed, 67 consecutive years of annual dividend increases is proof positive of the company’s commitment to returning cash to shareholders. It first paid a dividend in 1924 and its dividend growth streak is long-lived too, at 50 years and counting. The last payout hike came in December 2022 — an 8.5% increase to 51 cents per share quarterly. Archer Daniels Midland has paid out dividends on an uninterrupted basis for 89 years.

Through good economic times and bad, one of ADP’s great advantages is its “stickiness.” After all, it’s complicated and expensive for corporate customers to change payroll service providers. That competitive advantage helps throw off consistent income and cash flow. In turn, ADP has become a dependable dividend payer – one that has provided an annual raise for shareholders since 1975. CLX boasts a reasonable payout ratio and ample free cash flow, which should ensure a 46th consecutive increase to the dividend in 2023.

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The company most recently paid a quarterly dividend of $1.07/share, which implies an annualized dividend rate of $4.27 per share. Williams is an American energy infrastructure company that is primarily focused on the production and transportation/shipment of natural gas and petroleum. The company owns and operates approximately 33,000 miles of pipelines, 29 processing facilities, and approximately 24 million barrels of natural gas storage capacity. Last year, WMB paid an annual dividend of $1.79/share, and its most recent quarterly dividend was $0.45/share. Although the yield on the payout might not wow investors, Nordson’s epic streak of dividend increases certainly proves the company’s commitment to returning cash to shareholders.

Enterprise Products has a tremendous asset base which consists of nearly 50,000 miles of natural gas, natural gas liquids, crude oil, and refined products pipelines. The 7 best high yield securities are listed in order by dividend yield below, from lowest to highest. Please see Open to the Public Investing’s Fee Schedule to learn more. Thousands of dividend investors trust our online tools and research to track their portfolios, avoid dividend cuts, and achieve lasting financial freedom.

best dividend stocks 2023

You can use this extra income via dividend payments to reinvest or, alternatively, to help you cover your monthly expenses. We disagree and, having perused more than 50 years of data, conclude that Applied is unquestionably a growth company trading at a value price. The green bars indicate that semiconductor manufacturers have grown industry revenue at 7.5% over the last decade, more than three times the growth of the U.S. economy over this same decade. The orange line indicates that the percentage of this revenue that the industry commits to capital spending has gradually risen from roughly 20% to 30%. Putting these two trends together, it should come as no surprise that Applied has grown revenue at a rate of 11%, and operating income at more than 19% over this same time period. Companies with consistent dividend hikes become top choices for investors because of their long-term growth potential and lower volatility.

FY22 adjusted earnings rose to $39.9 billion in the year, driven by elevated oil prices caused by the Ukraine War and increased post-pandemic economic demand. Dividend Yield – This is a ratio of the stock’s annual dividend divided by the current stock price. So a stock that pays out $4.00 annually and has a stock price of $100 has a dividend yield of 4%. This means that the dividend yield may change frequently making dividend yield alone an imperfect measure for evaluating the quality of a dividend stock.

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The company last raised its dividend in February 2023, by 10% to 46.75 cents per share per quarter. If you are looking for a company with a wide economic moat, a lion’s share of its market, and a decent dividend to boot, it’s unusual to also get a bargain price. Those boxes include decent returns on capital, a significant economic moat that makes it difficult for competitors to breach its businesses and a management team that seems to be righting the ship.

Using NerdWallet’s investment calculator, we can see that a $5,000 investment that grows at 6% annually for 20 years could grow to over $16,000. Bump that up to 8% growth to include dividends, and that $5,000 could grow to over $24,000. Our partners cannot pay us to guarantee favorable reviews of their products or services. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances.

Arguably, the recent share price decline presents a potential buying opportunity for investors, considering the attractive dividend yield and the company’s strong financial position. For example, a real estate investment trust (REIT) is required to pay out up to 90% of its earnings as a dividend. As a result, these stocks have some of the highest dividend yields available. You’ll want to make sure you compare companies that are in similar sectors (financials, consumer durables, healthcare, etc.). JPMorgan Chase is an American multinational financial services company headquartered in New York City. As of 2023, it is the largest bank in the United States and the world’s largest bank in terms of market capitalization.

However, the company notes that excluding a period of government controls in 1971, that streak would stretch to 58 years. Either way, ITW’s dividend sports a 10-year compound annual growth rate of 13%. If you’re considering investing your cash savings in dividend stocks, it may be tempting to compare dividend yields to the APY
in your savings account. This isn’t an apples-to-apples comparison, because dividend stocks return value to you in two ways—the dividend plus share price appreciation.

In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information.

What are the best dividend stocks?

One of the most important characteristics of a dividend-paying stock is a long history of consistent profitability. A long history of consistently strong earnings can translate to increased stability in the dividend, in terms of amount and frequency. Simon Property Group is an American real estate investment trust (REIT) that invests in shopping malls, outlet centers and community/lifestyle centers. It is the largest owner of shopping malls in the United States when measuring by square feet. At the outset of the pandemic, SPG was forced to halt payment of its dividend for one quarter. However, the quarterly dividend is now back up to $1.80/share, and has paid a dividend for the last 11 quarters.

best dividend stocks 2023

Pentair has raised its dividend annually for 47 straight years, most recently in December 2022, by 4.8% to 22 cents per share quarterly. A modest payout ratio and consistently ample free cash flow helps ensure that Pentair will continue to be one of the best dividend stocks. PPG has paid a dividend since 1899 and has raised it annually for 51 years. A below-average payout ratio and solid outlook for long-term earnings growth should keep the dividend increases coming.

T. Rowe Price

Within the past 12-month period, the stock price of Johnson & Johnson has declined by 9.53%. This has contributed to the company currently paying a Dividend Yield [FWD] of 3.00%. In my opinion, this makes Johnson & Johnson a very attractive fit for investors. Allianz belongs to the largest positions of my personal investment portfolio. The main reason for this is that I believe the company is an excellent fit in terms of risk and reward. I consider the risks that come attached to an Allianz investment as being relatively low, while I consider the reward in the form of its expected compound annual rate of return to be relatively high.

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