10 Dividend Stocks to Buy for 2023
During periods of high inflation and a potential recession, dividends can be a great source of income for your investments. Listed below are 10 dividend stocks you should consider for your portfolio.
Dividend investing is one of the most potent ways for stockholders to able to have a steady flow of cash over the longer term, which when reinvesting dividend income can boost their returns. Dividends have accounted for about 40% of S&P 500 returns over the last decade.
What Is A Dividend Stock?
A dividend stock is an equity investment that regularly distributes dividends to its shareholders. Investors seeking income typically buy dividend stocks, but the best dividend stocks also provide long-term appreciation. Dividend stocks provide investors with both price appreciation and capital gains, which are useful for hedging against inflation. In a span of 24 years, dividend stock delivered double that of non-dividend payment stocks.
Here’s the catch, not all dividend stocks are the same.
Dividends cannot compensate for underperforming stocks. Moreover, a high dividend yield may serve as a shield to hide erratic payouts, poor performance, or minimal growth potential.
Plus, not all companies pay dividends, but many do. (Approximately 75% of companies in the S&P 500 pay regular dividends.)
10 Top Dividend Stocks to Buy for 2023
1. Devon Energy (DVN)
Devon Energy Corporation is a leading independent oil and natural gas exploration and production company with a premier multi-basin portfolio. Devon’s operations are focused onshore in the United States.
Dividend yield: 8.4%
Annual dividend: $5.40
Is Devon Energy a good stock to buy?
In addition to its impressive growth, Devon Energy currently has an S&P debt rating of “BBB”. As long as the price of oil and natural gas remains high and continues to be in demand. High yields can be expected to continue. It is also a possibility of additional capital appreciation.
The stock appreciate 22% in a 1 year period even with a major drop in late June due to interest-rate hikes, the strengthening US dollar, and recession fears. Oil prices have been trending downward since mid-May 2022.
2. Altria Group Inc. (MO)
Altria Group, Inc. is an American corporation and a major producer and marketer of tobacco and cigarettes. The company is headquartered in Henrico County, Virginia, and operates worldwide. As part of its portfolio, the company produces smokeless tobacco brands Copenhagen and Skoal, as well as well-known cigarette brands Marlboro, Black & Mild, pipe tobacco, and cigar products. When it comes to nicotine fixes, Altria dominates the U.S. market because of its brand strength.
Dividend yield: 8.52 %
Annual dividend: $3.76
Is Altria a good stock to buy?
With more than 50 consecutive years of dividend increases, the company has been able to boast a sustainable and generous dividend payout that is very attractive to investors who want to take a risk-free position.
In the event of an economic recession just around the corner, Altria is just the kind of dividend stock that can continue to pay you dividends even during an uncertain economic time. Furthermore, analysts expect that the company will grow its earnings per share through 2023, which will enable it to raise its dividend once again in the future. The stock’s price forecast to range around $37 to $63 in 2023.
3. Enbridge (ENB)
Enbridge Inc provides gas and oil services through the following segments: Liquid Pipelines, Gas Distribution & Storage, Gas Transmission & Midstream, Renewable Power Generation, and Energy Services.
Dividend yield: 6.54%
Annual dividend: $3.55
“We have a consistent track record of delivering annual dividend increases, and our continuing goal is to deliver superior shareholder returns through capital appreciation and dividends.”- Enbridge
Is Enbridge a good stock to buy?
Most technical indicators show that ENB is currently the fairly value, only bull-bear oscillators show a ‘BUY’ reading. The rest remain as ‘Neutral’.
Enbridge’s stock performance remain consistent over 1 year period even with a major drop in late June due to interest-rate hikes, the strengthening US dollar, and recession fears. Oil prices have been trending downward since mid-May 2022. Another circle of a price drop of almost 6% September to Mid October 2022 when oil prices tumbled by 12%.
However, when viewed from a dividend stock perspective, Enbridge has been paying dividends to shareholders for over 68 years. In this way, investors are able to take advantage of their income rather than focusing on their capital gains.
4.Newell Brands Inc. (NWL)
Newell is the company behind a host of home goods, such as Calphalon cookware, Rubbermaid storage products, Sharpie and Paper Mate office products, Yankee Candle, and many other brands that lead their categories. Admittedly, it’s a bit of a grab bag of products in the NWL suite, but this variety helps provide a more stable revenue stream because it insulates Newell from changing economic circumstances or consumer tastes.
Dividend yield: 5.81%
Annual dividend: $0.23(quarterly) (**NWL’s next ex-dividend date has not been announced yet.)
Is Newell Brands a good stock to buy?
Wall Street analysts predict that Newell Brands’ share price could reach $17.88 by Jan 26, 2024. In a span of a year, the stock had dropped 31.75%. Accordingly, a figure of $17.88 is achievable if it reaches $21.42 on August 16, 2022.
5. International Business Machines (IBM)
IBM is one of the largest tech companies in the United States, and it earns more than two-thirds of its revenue from software and consulting services. Over the past 100 years, IBM has paid dividends consistently.
Dividend yield: 4.91%
Annual dividend: $6.60
Is IBM a good stock to buy?
A consensus of 15 analysts predicts IBM’s price range to be within the range of $110 – $165. The valuation metrics for International Business Machines Corporation suggest that it may be undervalued. Considering IBM’s financial health and growth prospects, it has the potential to outperform the market.
As of September 2022, IBM stock is up by 17%, which is an outstanding achievement among battered tech stocks, and despite IBM’s excellent performance over the past few months, the stock still represents a good investment option for value investors.
AT&T is another telecommunications leader that provides communications and digital entertainment services in the United States and the world. As the company invests in 5G and pays down its heavy debt load, it has divested some assets and cut its dividend by nearly half. Four segments make up the company: Business Solutions, Entertainment Group, Consumer Mobility, and International.
Dividend yield: 5.8 %
Annual dividend: $1.11
Is AT&T a good stock to buy?
Despite reported positive Q4 earnings that beat market estimation by 7%. The company left investors worried as it also reported continuing loss operation of $23.1B. The company’s forecast earnings for 2023 sit between $2.35 to $2.45. It falls short of analyst expectations of $2.56. There is a mixture of opinions as analyst estimation for the stock’s price to range between $9-$25.
7. Verizon Communications Inc. (VZ)
Verizon is one of the top three wireless carriers in the United States. Through its subsidiaries, the company provides communications, information and entertainment services, and through its wireless segment, it sells communications equipment, wireless voice and data services, and communications products to consumers, businesses and government agencies.
Dividend yield: 6.42 %
Annual dividend: $2.61
Is Verizon a good stock to buy?
The industry has seen its growth taper off following the burst in demand during the pandemic. Costs remain elevated thanks to pricey 5G rollouts and expensive purchases of wireless spectrum. With a combination of rising costs with a mature industry, telecom carriers seem less attractive.
The current market price of Verizon is $40.64. Analysts forecast the price to range between $37 to $53. Most moving averages indicate the stock with a ‘buy’ signal while almost all oscillator signals are at neutral and MACD levels at 0.37 indicate sell.
8. V.F. Corporation (VFC)
V.F. Corporation owns popular apparel and footwear brands such as The North Face, Vans, Timberland, Icebreaker, Dickies, Napapijri, Supreme, and Kipling.
The company operates in three segments: Outdoor, Active, and Work. Throughout the outdoor segment, there is an authentic outdoor lifestyle, the active segment represents a group of brands that are active lifestyle focused, and the work segment represents an array of active clothing and footwear that are designed specifically for work and work-inspired lifestyles.
The company has struggled recently as revenue has declined for some brands and inventories have spiked, leading to more discounts on their products.
Dividend yield: 6.7 %
Annual dividend: $2.04
Is V.F. a good stock to buy?
V.F. shares have had a very rough 2022.
As of 2023, I do not expect a dividend cut, even when the company has higher inventory levels, lower consumer spending, and promotional activity. It should be noted, however, that these characteristics have always proved transitory in past recessions. Moreover, in order to keep the dividend increase streak alive and to make sure the investor keeps smiling, the management will likely defend the dividend.
In spite of that, V.F. has raised its dividends for 50 consecutive years, making it one of the top dividend-paying stocks. It a good option for income investors.
9. Ford Motors Co. (F)
The Ford Motor Company manufactures, distributes, and sells automobiles as a part of its business activities. It operates through the following three segments: Automotive, Mobility, and Ford Credit.
Ford Motors and Lincoln vehicles are developed, manufactured, marketed, and serviced in the Automotive segment, while Ford Smart Mobility LLC and autonomous vehicles are part of the Mobility segment. On a consolidated basis, Ford Credit consists primarily of financing and leasing activities related to vehicles.
Dividend yield: 4.52 %
Annual dividend: $0.60
Is Ford a good stock to buy?
Ford Motor Co’s share price is predicted to reach $16.64 by Jan 25, 2024, according to Wall Street analysts
Ford’s stock is attractive due to its strong brand, its focus on EVs, and the potential benefits of the Inflation Reduction Act, among other things. Ford certainly makes it to the top of the list of stocks to consider if you’re considering adding an auto stock to your portfolio in 2023.
10. 3M Company (MMM)
The 3M Company manufactures industrial, safety, and consumer products. The Minnesota-based company makes a wide variety of products, including building materials, electronics, orthodontics, and its most famous product: Scotch tape.
There are five segments under this company’s umbrella: Safety and Industrial, Transportation and Electronics, Health Care, Consumer, and Corporate and Unallocated.
Dividend yield: 5.17%
Annual dividend: $5.96
Is 3M a good stock to buy?
Over the past 100 years, 3M has continuously paid dividends to shareholders.
3M Co’s market capitalization was $62.0 billion on January 26, 2023, placing it in the 97th percentile of Consumer Goods Conglomerates companies. While from a pricing perspective, analysts forecast the price to range between $105 to $197. Thus, it make the company an attractive stock to invest in from both value and income investors.
When it comes to evaluating dividend stocks, these are the key concepts you need to know:
Dividend yield. The dividend amount is divided by the stock’s current price per share to get this percentage. The dividend yield tells investors how much a stock pays out in dividends each year based on its price.
Consistent growth in earnings per share and revenue. It is more important for dividend stocks to have a strong underlying business than a high dividend payout. Choose dividend stocks that have delivered stable and growing earnings and revenue.
Durable competitive advantages. There is no doubt that the companies that have maintained the highest dividends over the longest periods of time have also been able to achieve some of the most durable competitive advantages. The best dividend stocks have some form of competitive advantage, whether it is based on technology, barriers to entry, high customer switching costs, or a strong brand name.
It is important to do thorough research on dividend stocks before investing in them. It is possible that some companies with high payouts today might be forced to cut the payments if their business suffers in the future.
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None of the material above or on our website is to be construed as a solicitation, recommendation or offer to buy or sell any security, financial product or instrument. Investors should carefully consider if the security and/or product is suitable for them in view of their entire investment portfolio. All investing involves risks, including the possible loss of money invested, and past performance does not guarantee future performance.