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)

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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)

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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)

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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.

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Whirlpool (WHR)

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

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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)

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(Video) 8 DIVIDEND STOCKS WITH HUGE GROWTH POTENTIAL IN 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)

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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.

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Kraft Heinz (KHC)

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

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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

Which stock pays highest dividend? ›

20 high-yield dividend stocks to watch
High-yield dividend stockTickerDividend yield
Intel(NASDAQ:INTC)5.45%
Johnson & Johnson(NYSE:JNJ)2.57%
Medical Properties Trust(NYSE:MPW)9.76%
3M(NYSE:MMM)4.69%
16 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 stocks have the highest dividend growth rate? ›

Dividend Growth Market Leaders
  • KO60.550.32% ...
  • MCD269.560.27% McDonald's Corporation.
  • MDT80.80-1.57% Medtronic plc.
  • SHW249.363.32% The Sherwin-Williams Company.
  • EMR89.480.48% Emerson Electric Co.
  • AFL72.801.26% Aflac Incorporated.
  • CTAS440.242.47% Cintas Corporation.
  • MKC78.60-0.05% McCormick & Company, Incorporated.

What is the best dividend stock to buy and hold? ›

Energy
StockBusiness SummaryDividend Yield
1. Brookfield Renewable Corporation (NYSE: BEPC)Renewable energy provider4.6%
2. Brookfield Renewable Partners (NYSE: BEP)Renewable energy provider5.2%
3. ChevronIntegrated energy and chemicals producer3.2%
4. Devon Energy (NYSE: DVN)Oil and gas producer8.9%
3 more rows
Jan 3, 2023

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 1.40%).
  • A second extremely safe, high-yield dividend stock to buy for 2023 is tobacco behemoth Philip Morris International (PM -0.66%).
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.

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

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.

Is it smart to buy a stock right before dividend? ›

If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

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™

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%.

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.

What are the 5 highest dividend paying stocks? ›

Most Recent Earnings of Dividend Stocks
  • XRX. Xerox. Oct 25, 2022. ...
  • IBM. International Business Machines. Oct 19, 2022. ...
  • CVX. Chevron. Oct 28, 2022. ...
  • EOG. EOG Resources. Nov 03, 2022. ...
  • EPD. Enterprise Products Partners. Nov 01, 2022. ...
  • ET. Energy Transfer. Nov 01, 2022. ...
  • HESM. Hess Midstream Partners. Oct 26, 2022. ...
  • ARCC. Ares Capital. Oct 25, 2022.

What stocks will boom in 2023? ›

Jim Cramer predicts these 10 S&P 500 stocks will perform well in...
  • HAL-1.13 (-2.79%)
  • CEG-0.47 (-0.56%)
  • ENPH-8.77 (-3.84%)
  • MCK-1.43 (-0.38%)
  • NOC+6.14 (+1.36%)
  • NFLX+5.79 (+1.62%)
  • SWK+0.34 (+0.38%)
  • VFC+0.02 (+0.07%)
Jan 4, 2023

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.

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 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.

Which stock is best for long term holding? ›

Best Long Term Stocks India: Overview
  • 1) Reliance Industries. ...
  • 2) Tata Consultancy Services (TCS) ...
  • 3) Infosys. ...
  • 4) HDFC Bank. ...
  • 5) Hindustan Unilever.
Jan 12, 2023

When should you not pay a dividend? ›

A company that is still growing rapidly usually won't pay dividends because it wants to invest as much as possible into further growth. Mature firms that believe they can increase value by reinvesting their earnings will choose not to pay dividends.

Is AT&T a good dividend stock? ›

Overall, the AT&T Inc.'s current dividend yield is 5.8%, which ranks in the 90th percentile among all U.S.-listed dividend-paying stocks. Its compound average dividend growth rate is 1.6% over the last five years.

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.

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? ›

What Months Does Coca-Cola Pay Dividends? On the other hand, the company's dividends are not quarterly or every 3 months. Coca-Cola dividends are paid in April, then July, October, and December.

Is it better to get dividends monthly or quarterly? ›

A monthly dividend calendar better aligns with your living expenses. But the benefits actually go beyond financial planning. If you're still working and reinvesting your dividends for growth, a monthly dividend will compound faster over time.

Are dividend stocks good for long term? ›

Dividend stocks can be useful sources of income, but the best dividend stocks can also be excellent ways to increase your wealth over the long term. However, not all dividend stocks are great investments, and many investors aren't sure how to start their search.

Can you lose with dividend stocks? ›

Regardless of what causes the company-specific problems. You can lose money with dividend stocks when the companies behind your stocks perform poorly. Making it very important. To diversify your portfolio with the optimal number of dividend stocks.

What stocks pay the highest dividends 2022? ›

For this list, we selected dividend stocks with the highest returns in 2022 so far.
...
  • 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

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.

Is 4 a good dividend yield? ›

What is a good dividend yield? In general, dividend yields of 2% to 4% are considered strong, and anything above 4% can be a great buy—but also a risky one.

How does a 5% dividend work? ›

A stock dividend is a payment to shareholders that consists of additional shares rather than cash. The distributions are paid in fractions per existing share. For example, if a company issues a stock dividend of 5%, it will pay 0.05 shares for every share owned by a shareholder.

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.

Are dividends taxed? ›

Dividends can be classified either as ordinary or qualified. Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates.

Can you live off dividends? ›

Living off dividends amidst volatility is challenging but achievable. With preparation, knowledge, and wise portfolio diversification, returns may offset risks. It is important to be familiar with dividend-paying stocks and other investments.

What dividend pays 100k a year? ›

Using these assumptions, $100,000 per year in dividends will require a dividend portfolio with a market value of $2,352,941. Yeah. That's a lot of money.

What is the safest dividend? ›

  • 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 1.40%).
  • A second extremely safe, high-yield dividend stock to buy for 2023 is tobacco behemoth Philip Morris International (PM -0.66%).
Dec 20, 2022

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.

How much dividend will I get from Coca Cola? ›

KO pays a dividend of $0.44 per share. KO's annual dividend yield is 2.78%. When is Coca-Cola ex-dividend date? Coca-Cola's previous ex-dividend date was on Nov 29, 2022.

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