The 7 Best Dividend Stocks to Buy for an Uncertain 2023 (2023)

With uncertainty baked into the possibilities for the new year, investors may want to shift their focus toward the best dividend stocks to buy. Now, don’t misinterpret what I’m trying to say: it’s not that you should avoid growth-oriented names altogether. Rather, it’s a prudent idea to pivot your portfolio to a balanced profile. That way, you can accommodate any variability to your market thesis.

While no one can say with absolute authority what will happen in 2023, investors should stay on their guard. For one thing, you have a massive geopolitical conflict in Europe that may not be resolved anytime soon. Further, the Federal Reserve still has much work to do to clamp down on excess liquidity. It’s not out of the realm of possibility, then, to see deflationary pressures.

Speaking of deflation, eroding economic sentiment contributed to mass layoffs. Having to digest multiple market catalysts, investors should focus on the best dividend stocks to buy for 2023.

SOSouthern Co$66.86
AEPAmerican Electric Power$92.66
PSXPhillips 66$106.94
WHRWhirlpool$152.12
HRBH&R Block$38.50
TSNTyson Foods$66.15
KHCKraft Heinz$40.26

Southern Co (SO)

The 7 Best Dividend Stocks to Buy for an Uncertain 2023 (1)

Source: jittawit21/Shutterstock.com

A gas and electric utility holding company, Southern Co (NYSE:SO) commands extraordinary relevance because of its footprint. According to its public profile, Southern is the second largest utility company in the U.S. in terms of customer base, as of 2021. Although it’s a vital component of the economy, SO didn’t get much love these days. In the trailing year, shares slipped a bit under parity.

Nevertheless, this circumstance may change for the better because of Southern’s migration-related advantage. Situated in the southern portion of the U.S. (hence its name), it commands a huge coverage map in Georgia. This is significant because Georgia represents one of the states that millennials are moving to. In particular, young folks have streamed into Atlanta.

As a passive income provider, Southern offers a very attractive profile. Currently, the company carries a forward yield of 4.05%. This ranks a bit higher than the utility sector’s average yield of 3.75%. As well, Southern features 21 years of consecutive annual dividend increases, making it an attractive candidate for best dividend stocks to buy.

American Electric Power (AEP)

The 7 Best Dividend Stocks to Buy for an Uncertain 2023 (2)

Source: Dmitry Lobanov/Shutterstock.com

(Video) The 7 Best Dividend Stocks for Retirement Income Portfolios in 2023

A major investor-owned electric utility, American Electric Power (NASDAQ:AEP) electricity to more than five million customers in 11 states. Like Southern Co above, American Electric benefits from millennial migration trends. Featuring a coverage map that includes much of the Midwest and eastern states, AEP enjoys a clear advantage.

With costs of living skyrocketing in major metropolitan areas, young folks have found refuge in relatively more rural areas. For instance, Virginia – where AEP features a strong presence – offers an attractive alternative to pricey regions. Stated differently, American Electric conducts business where the money will be, not necessarily where it is right now.

Just as well, the company provides a solid dividend with a forward yield of 3.6%. Also, it features 13 years of consecutive annual dividend increases. Admittedly, its payout ratio of 58.78% is a bit on the high side. Nevertheless, it’s within a reasonable level as to not spark alarm bells.Finally, Wall Street analysts love AEP, rating it a consensus strong buy. Thus, it makes a great case for best dividend stocks to buy.

Phillips 66 (PSX)

The 7 Best Dividend Stocks to Buy for an Uncertain 2023 (3)

Source: iQoncept/shutterstock.com

A hydrocarbon energy giant, Phillips 66 (NYSE:PSX) specializes in the downstream component of the industry’s value chain. This component covers operations like refining and marketing, as opposed to upstream (exploration and production) and midstream (storage and transportation). Fundamentally, as society reaches full normalization, PSX may skyrocket. Indeed, in the trailing year, it’s already up over 29%.

But prospective investors shouldn’t be discouraged. As companies start recalling their workers back to the office, traffic volume will surely increase. For instance, Disney (NYSE:DIS) generated headlines recently when CEO Bob Iger basically put an end to remote operations. While some intrepid workers may go independent and join the gig economy, I’m sure most will fall in line.

And with that, you’re talking about a high-probability fundamental catalyst. From this angle alone, PSX ranks among the best dividend stocks to buy.Still, as a bonus, the company carries a forward yield of 3.63%. And a relatively low payout ratio of 31% presents little concern about sustainability.

(Video) The 5 BEST Dividend Stocks to Buy Now for 2023 | Where to Invest $5,000 Right Now

Whirlpool (WHR)

The 7 Best Dividend Stocks to Buy for an Uncertain 2023 (4)

Source: Shutterstock

An oddity among the best dividend stocks to buy, I genuinely believe investors should watch Whirlpool (NYSE:WHR) closely this year. Let me be the first to say that appliance manufacturers represent a boring component of the economy. As well, WHR hasn’t exactly been a friend to long-term stakeholders. In the trailing year, shares slipped over 27%. And in the trailing five years, they’re down 19%.

So, what gives? As you know, anything mechanical eventually breaks down. Further, the complexities involved in modern appliances and equipment make (in some cases) out-of-warranty repairs financially non-sensical. Plus, if an appliance breaks down, you tend to want a new one.

Now, during the first three years of the coronavirus pandemic, the work-from-home pivot likely accelerated home appliance usage (as opposed to in-office appliances). Therefore, the extra, unplanned usage may accelerate the underlying appliances’ breakdown period.

Cynically, then, Whirlpool enjoys upside potential. While you’re waiting for this thesis to pan out, the company offers a forward yield of 4.64%. It’s strange but WHR could be one of the best dividend stocks to buy.

H&R Block (HRB)

The 7 Best Dividend Stocks to Buy for an Uncertain 2023 (5)

Source: Shutterstock

(Video) My Anticipated High Yield Dividend Stock Picks for 2023

One of the companies that aligns strongly with the gig economy, H&R Block (NYSE:HRB) ranks among the best dividend stocks to buy. At the very least, you should monitor its progress this year. Granted, its core tax consultancy business doesn’t signal a particularly exciting business. However, it’s going to be among the most relevant, depending on how serious workers want to consider the gig economy.

Already, we’re seeing reports globally about people quitting rather than going back to the office. In that case (in the U.S.), gig workers must then transition from filing W-2 forms with the IRS and move to the (dreaded) 1099. Unfortunately, I don’t have the time to go over all the differences. However, the key point centers on disclosures. With 1099 forms, you must make more of them.

Further, because gig workers report their earnings and legal deductions, mistakes may trigger an IRS action. Therefore, it’s vital that these independent contractors know what they’re doing. H&R Block can help. Plus, the company offers a forward yield of 3.10%.

Tyson Foods (TSN)

The 7 Best Dividend Stocks to Buy for an Uncertain 2023 (6)

Source: Shutterstock

Although Tyson Foods (NYSE:TSN) represents a vital category in the economy, it hasn’t had a great performance in 2022. Indeed, in the trailing year, TSN gave up nearly 29% of equity value. It’s not just related to technical rumblings. Fundamentally, investors lost confidence in Tyson because of growing margin pressure and operational issues.

From this basis, Tyson represents one of the riskier names among the best dividend stocks to buy. At the same time, it’s difficult to be overly negative on food-related enterprises. Unlike companies in the consumer discretionary space, no trade down (cheaper alternative) exists for food. You’re either eating or you’re not.

Financially, the troubles did make TSN more attractive. Currently, the company sports a decently stable balance sheet and solid profitability. Better yet, the market prices TSN at 9.65-times forward earnings, below the sector median of 16 times.

Finally, Tyson carries a forward yield of just under 3%. Also, it features 11 years of consecutive annual dividend increases. Thus, it’s a solid contrarian candidate for best dividend stocks to buy.

(Video) Top 7 Dividend Stocks to Buy and Hold Forever

Kraft Heinz (KHC)

The 7 Best Dividend Stocks to Buy for an Uncertain 2023 (7)

Source: Shutterstock

A multinational food company formed by the merger of Kraft Foods and Heinz, Kraft Heinz (NASDAQ:KHC) presents an intriguing narrative for the best dividend stocks to buy. Primarily, it features a generous rate of passive income. At the same time, KHC has been a proven winner. You’re probably not going to get rich off the shares. However, I’ll take a trailing-year performance of 9.6% any time, particularly when the benchmark equities index slipped sharply.

Fundamentally, investors should pay close attention to KHC because of the trade-down effect. Assuming economic conditions worsen from here, consumers will start cutting unnecessary expenses and seeking cheaper alternatives to desired products/services. However, you can’t trade down from making your own food at home. Therefore, Kraft Heinz’s core grocery products-related business should blossom.

While investors wait for this plotline to pan out, they can collect some sweet passive income. Currently, Kraft Heinz carries a forward yield of 4%. And while its payout ratio at 55.24% is somewhat elevated, it’s arguably not going to cause serious concern. Thus, KHC ranks among the best dividend stocks to buy.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

Dividend Stocks

FAQs

What stock pays highest dividend? ›

Comparison Results
NamePriceDividend Yield
T AT&T$19.536.97%
XRX Xerox$16.736.04%
IBM International Business Machines$145.914.53%
CVX Chevron$177.513.20%
6 more rows

How many dividend stocks should I own? ›

By owning fewer than 25 stocks, investment risk increases significantly. But, by owning more than 25 stocks, there are diminishing benefits from diversification. Especially when additional stocks are added to a portfolio beyond 30. So, 25 stocks should be plenty.

How do you find good dividends on a stock? ›

If you plan to invest in dividend stocks, look for companies that boast long-term expected earnings growth between 5% and 15%, strong cash flows, low debt-to-equity ratios, and industrial strength.

What is a good dividend yield? ›

A good dividend yield is high enough to meet your current income needs. But low enough to suggest a company's dividend is not at risk. Dividend yields that meet these requirements will typically fall between 2% and 5%. Since a stock with a yield of less than 2% may not provide the investor with enough current income.

What is the safest dividend stock? ›

  • One of the safest and smartest high-yield dividend stocks investors can buy for the new year is oil and gas stock Enterprise Products Partners (EPD -0.78%).
  • A second extremely safe, high-yield dividend stock to buy for 2023 is tobacco behemoth Philip Morris International (PM -0.46%).
Dec 20, 2022

What are the 3 dividend stocks to buy and hold forever? ›

9 dividend stocks to hold

Prudential Financial Inc. Coca-Cola Co. AbbVie Inc. AT&T Inc.

How long should you hold dividend stocks? ›

In order to receive the preferred 15% tax rate on dividends, you must hold the stock for a minimum number of days. That minimum period is 61 days within the 121-day period surrounding the ex-dividend date. The 121-day period begins 60 days before the ex-dividend date.

What stock pays monthly dividends? ›

Highest-Paying Monthly Dividend Stocks
  • LTC Properties, Inc. ...
  • Dream Office Real Estate Investment Trust (OTC:DRETF) ...
  • Gladstone Investment Corporation (NASDAQ:GAIN) ...
  • Main Street Capital Corporation (NYSE:MAIN) ...
  • Gladstone Commercial Corporation (NASDAQ:GOOD) ...
  • EPR Properties (NYSE:EPR) ...
  • Gladstone Capital Corporation (NASDAQ:GLAD)
Nov 24, 2022

Is Verizon a good dividend stock? ›

Verizon (VZ 0.12%) pays a strong dividend that attracts income investors. That said, those investors will want to know how sustainable the 5G company's nearly 7% dividend yield is for the long term. *Stock prices used were the afternoon prices of Nov. 25, 2022.

Can you get rich off dividends? ›

Can an investor really get rich from dividends? The short answer is “yes”. With a high savings rate, robust investment returns, and a long enough time horizon, this will lead to surprising wealth in the long run. For many investors who are just starting out, this may seem like an unrealistic pipe dream.

What is 7% dividend yield? ›

The dividend yield is a financial ratio that tells you the percentage of a company's share price that it pays out in dividends each year. For example, if a company has a $20 share price and pays a dividend of $1 per year, its dividend yield would be 5%.

What is the 4% dividend rule? ›

But remember that the 4% rule says you have to sell 4% of your portfolio, including bonds, every year. This means that if you are close to or already retired, the short-term decline in bond prices could force you to take a loss on your bond investment.

What is a good dividend portfolio? ›

You Can Build a Dividend Portfolio for Regular Income

Hold between 20 and 60 stocks to reduce company-specific risk. Roughly equal-weight each position. Invest no more than 25% of your portfolio in any one sector. Target companies with Safe or Very Safe Dividend Safety Scores™

Which stocks is the least risk dividend? ›

Best Low-Risk Dividend Stocks to Invest In
  • Walmart Inc. (NYSE:WMT) ...
  • Archer-Daniels-Midland Company (NYSE:ADM) Dividend Yield as of December 7: 1.76% ...
  • McCormick & Company, Incorporated (NYSE:MKC) ...
  • Starbucks Corporation (NASDAQ:SBUX) ...
  • Hormel Foods Corporation (NYSE:HRL) ...
  • The Home Depot, Inc.
Dec 7, 2022

What is better than dividend stocks? ›

For investors who are still decades away from retirement, growth stocks offer significantly higher upside than dividend stocks. This is because instead of returning cash flows to investors, these companies are investing aggressively back into their businesses to grow their products and services or enter new markets.

Are dividend stocks good in a recession? ›

Companies that manage to maintain a stable (or even growing) dividend in all circumstances (also known as dividend aristocrats) tend to outperform in recessionary periods.

What is the most stable stock? ›

Best safe stocks to buy
  1. Berkshire Hathaway. Berkshire Hathaway (NYSE:BRK. ...
  2. The Walt Disney Company. ...
  3. Vanguard High-Dividend Yield ETF. ...
  4. Procter & Gamble. ...
  5. Vanguard Real Estate Index Fund. ...
  6. Starbucks. ...
  7. Apple.

What are the 3 important dates for dividends? ›

What are the Important Dividend Dates?
  • Declaration Date. The declaration date is the date on which the board of directors announces and approves the payment of a dividend. ...
  • Ex-Dividend Date. The ex-dividend date is the first day that a stock trades without a dividend. ...
  • Record Date. ...
  • Payment Date.
Dec 6, 2022

What stocks to hold forever? ›

7 Safe Stocks to Buy and Hold Forever
TMUST-Mobile$152.41
GRCGorman-Rupp$27.32
GWRSGlobal Water$12.66
ADUSAddus HomeCare$112.55
AEMAgnico Eagle Mines$51.77
2 more rows
Dec 5, 2022

When should I start buying dividend stocks? ›

The 4 best times to buy dividend stocks are: Anytime as part of a long-term dividend investing strategy. Whenever you identify high-quality stocks that pay dividends. When the overall stock market is down.

What is the 45 day dividend rule? ›

You must hold the shares or interest for 45 days (90 days for certain preference shares) excluding the day of disposal. For each of these days you must have 30% or more of the ordinary financial risks of loss and opportunities for gain from owning the shares or interest.

When should I buy dividend stocks? ›

You should consider buying dividend-paying stocks whenever you start investing to reap their long-term benefits. Dividend stocks, especially those in companies that consistently increase their dividends, have historically outperformed the market with less volatility.

What are the top 5 dividend stocks? ›

  1. Home Depot. Market value: $282.1 billion. Dividend yield: 2.8%
  2. Coca-Cola. Market value: $242.0 billion. Dividend yield: 3.2% ...
  3. Merck. Market value: $242.4 billion. Dividend yield: 2.9% ...
  4. Goldman Sachs. Market value: $111.0 billion. Dividend yield: 3.1% ...
  5. Chevron. Market value: $339.0 billion. Dividend yield: 3.3% ...
Oct 26, 2022

How do I get high monthly dividends? ›

How To Make $500 A Month In Dividends: Your 5 Step Plan
  1. Choose a desired dividend yield target.
  2. Determine the amount of investment required.
  3. Select dividend stocks to fill out your dividend income portfolio.
  4. Invest in your dividend income portfolio regularly.
  5. Reinvest all dividends received.

Does Coca-Cola pay dividends monthly? ›

Coca-Cola does NOT pay a monthly dividend.

Where will AT&T stock be in 5 years? ›

Its AT&T stock forecast 2025 has T stock down to just $4 by December 2025.

Is Pfizer a good dividend stock? ›

Since March 26, 1973, Pfizer Inc. has paid out quarterly dividends ranging from $0.08 to $0.66 per share. Over the past five years, Pfizer Inc.'s dividend yield has averaged 3.5% per year. Interested in learning how AAII's Dividend Investing can help you develop a successful strategy?

What is Verizon's next dividend? ›

VZ pays a dividend of $0.65 per share. VZ's annual dividend yield is 6.81%. When is Verizon ex-dividend date? Verizon's upcoming ex-dividend date is on Jan 08, 2023.

How to become a millionaire with dividends? ›

3 Steps to Getting Rich With Dividend Stocks
  1. Make sure you're choosing the right stocks. Not all companies pay dividends. ...
  2. Reinvest your dividend payments. Every time you're paid a dividend, you have the option of reinvesting that payment or cashing out. ...
  3. Hold your investments for as long as possible.
Jan 31, 2021

How do I avoid paying tax on dividends? ›

How can you avoid paying taxes on dividends?
  1. Stay in a lower tax bracket. ...
  2. Invest in tax-exempt accounts. ...
  3. Invest in education-oriented accounts. ...
  4. Invest in tax-deferred accounts. ...
  5. Don't churn. ...
  6. Invest in companies that don't pay dividends.
Sep 6, 2022

Does Warren Buffett reinvest dividends? ›

While Berkshire Hathaway itself does not pay a dividend because it prefers to reinvest all of its earnings for growth, Warren Buffett has certainly not been shy about owning shares of dividend-paying stocks.
...
Warren Buffett's Dividend Portfolio.
TickerC
NameCitigroup
IndustryDiversified Banks
Dividend Yield4.09%
Dividend SafetyBorderline Safe
9 more columns
Jan 13, 2023

Is 6 a good dividend yield? ›

A 6% annual return is considered pretty good by today's investing standards and typically you have to reach into some riskier places to try and achieve that kind of return year after year after year.

How much is a 2% dividend yield? ›

Individual Stocks

With a 2% dividend yield, you can expect to get $100 per year in payments (2% of $5,000 = $100).

Which is the biggest expense for most retirees? ›

Housing. Housing expenses—which include mortgage, rent, property tax, insurance, maintenance and repair costs—remained the largest expense for retirees. More specifically, the average retiree household pays an average of $17,454 per year ($1,455 per month) on housing costs, representing over 35% of annual expenditures.

What is the best age to retire? ›

Retiring at Age 65 or Earlier

An individual's retirement savings, health benefits, and social security commonly dictate the best time to stop working and vary by age.

Is 4 million enough to retire at 65? ›

A nest egg worth $4 million can provide many retirees with enough money for everyday expenses, as well as general freedom to do what they want. If you're preparing to retire with $4 million, there's a number of specific tasks you'll want to complete to ensure your continued success.

What is the fastest way to grow dividend income? ›

  1. Invest New Cash In Dividend-Paying Stocks To Increase Dividend Income. ...
  2. Receive Dividend Increases To Increase Dividend Income. ...
  3. Reinvest Your Dividends To Increase Dividend Income. ...
  4. Swap Lower-Yielding Stocks For Those With Higher Dividend Yields To Increase Dividend Income. ...
  5. Practice Dollar-Cost Averaging.

What stocks pay the highest dividends 2022? ›

For this list, we selected dividend stocks with the highest returns in 2022 so far. These companies also have strong balance sheets and sound financials.
...
  • Devon Energy Corporation (NYSE:DVN) ...
  • Phillips 66 (NYSE:PSX) ...
  • EOG Resources, Inc. ...
  • Archer-Daniels-Midland Company (NYSE:ADM) ...
  • CF Industries Holdings, Inc.
Dec 13, 2022

How to make $1,000 a month in dividends? ›

In a market that generates a 2% annual yield, you would need to invest $600,000 up front in order to reliably generate $12,000 per year (or $1,000 per month) in dividend payments.

What dividend pays 100k a year? ›

You'll need to build your portfolio up to at least $1 million to make $100,000 each year through dividend investing. Conservative options trading will give you more capital to invest into more dividend stocks and get you closer to the 6-figure goal.

Which penny stocks gives highest dividend? ›

Penny stock with dividend paying
S.No.NameCMP Rs.
1.Standard Inds.32.55
2.Geojit Fin. Ser.48.70
3.CESC73.95
4.Steel City Sec.59.55
22 more rows

How do I make 5k a month in dividends? ›

How To Make $5,000 A Month In Dividends
  1. Develop a long term perspective.
  2. Determine how much you can allocate for investment.
  3. Select dividend stocks that are consistent with your strategy.
  4. Invest in your selected dividend stocks regularly.
  5. Keep investment costs and trading to a minimum.
  6. Reinvest all dividends received.

How to make a million dollars in dividends? ›

How To Build A Million-Dollar Dividend Portfolio
  1. Think long term.
  2. Identify dividend stocks for investment.
  3. Develop a watch list.
  4. Analyze the stocks on your watch list.
  5. Invest regularly.
  6. Reinvest all dividends.
  7. Monitor your dividend stock portfolio.

Videos

1. Top 5 Dividend Aristocrat Stocks to Buy for 2023 | High Dividend Growth
(MAPsignals)
2. Top 7 Best Monthly Dividend ETFs To Make Money in 2023 (High Dividend Yield)
(Brothers Invests)
3. 10 Undervalued Dividend Stocks for 2023
(Morningstar, Inc.)
4. 8 DIVIDEND STOCKS WITH HUGE GROWTH POTENTIAL IN 2023!!!
(Stock Market Mate)
5. Dividend Stocks in 2023 | Best Monthly Dividend Stocks 2023
(Dividend Stocks 2023)
6. Top 10 Dividend Stocks to Buy in 2023
(Wealth Within)
Top Articles
Latest Posts
Article information

Author: Rob Wisoky

Last Updated: 03/13/2023

Views: 6484

Rating: 4.8 / 5 (48 voted)

Reviews: 87% of readers found this page helpful

Author information

Name: Rob Wisoky

Birthday: 1994-09-30

Address: 5789 Michel Vista, West Domenic, OR 80464-9452

Phone: +97313824072371

Job: Education Orchestrator

Hobby: Lockpicking, Crocheting, Baton twirling, Video gaming, Jogging, Whittling, Model building

Introduction: My name is Rob Wisoky, I am a smiling, helpful, encouraging, zealous, energetic, faithful, fantastic person who loves writing and wants to share my knowledge and understanding with you.