The best dividend stocks should be a part of every income-oriented investor’s portfolio. Dividends can provide a steady income stream, lower volatility, and a hedge against inflation because they combine stock price appreciation with the yield of a quarterly dividend. While the inflation rate fell last year, it was still 3.4%. A solid dividend stock can easily beat that in total return. Over the long term, the best dividend stocks tend to outperform the S&P 500.
Despite the relative safety of an income-focused investment strategy, purely including high-dividend stocks in any portfolio is a risky approach. Instead, building a balanced portfolio works best.
The best dividend stocks show consistent dividend growth, both in yearly increases and solid earnings that allow companies to afford the payouts. This guide presents 10 dividend stocks for solid long-term gains, representing a diverse mix of industries, and including small-cap, mid-cap and large-cap stocks.
While these 10 stocks represent very different industries, they all have a good potential for dividend growth. They are also attractively priced given their earnings growth potential. While’s a stock’s dividend yield isn’t the only way investors should look at dividend stocks, it is a crucial metric. It shows how much each company will pay you for holding its stock, compared to the stock’s price. Here’s a breakdown of each of the above stocks’ dividends yield: Let’s take a deeper look at the case for investing in the above dividend stocks. Read on to find the best dividend stocks this month. The building product supplier tops our list of the best dividend stocks to buy right now because in addition to its track record of raising its dividend payouts each year for nearly half a century, it has an attractive valuation and ambitious growth targets. Arizona-based Carlisle has made a pivot to becoming a pure-play building materials company focusing on two business segments, construction materials and waterproofing technologies, with the view of achieving higher returns. It recently released targets for 2030, seeking to achieve an adjusted EPS of $40 from $15 currently. as it aims to benefit from higher demand for labor-saving and green products and reroofing technologies. It targets organic revenue growth of at least 5% a year and an EBITDA margin of more than 25% through 2030. The dividend appears solid. With a cash dividend payout ratio of only 21%, there is plenty of room for continued dividend increases. The stock is trading at a P/E ratio of about 24, compared with a record 35 reached in 2021.
We chose AbbVie because it can be counted on for long-term dividend growth, having increased its dividend for 52 years in a row, making it a Dividend King. Since its spinoff from Abbott Labs (NYSE: ABT) in 2013, its dividend has grown by more than 285%. Most recently it raised its quarterly dividend in February by 4.7% to $1.55. The stock boasts an above-average dividend yield of 3.7%. What also makes this stock attractive is that despite an overall revenue decline in the latest quarter due to growing competition for its blockbuster immunology drug Humira, it already has two immunology drugs, Skyrizi and Rinvoq, that it says will eventually replace sales lost by Humira. It expects the duo to eventually bring in $15 billion in annual revenue. On top of that, it has 90 new products in its pipeline, including 50 in mid- or late-stage development, which it is heavily investing in. AbbVie expects the new drugs to bring it back to revenue growth by 2025.
SunCoke is among our top picks for revenue stocks because it bucks the trend of struggling coal producers. The market has soured on coal companies because of the global push for lower emissions. However, SunCoke managed to increase its revenue in its most recent quarter and in 2023 as a whole, and it also paid down its gross debt (short term and long term) by $44 million to $500 million. SunCoke’s coal is crucial to steel production and increased infrastructure spending is expected to continue boosting steel demand. Last year, the company raised its quarterly dividend by 25% to $0.10, giving it a yield of around 3.76%. Its cash dividend payout ratio is only 16.42%, leaving room for continued increases. The valuation is also attractive. The stock is trading at slightly under nine times earnings, providing a solid buying opportunity.
Brookfield is a top-pick dividend stock because it’s expanding its data center properties, which helps it benefit from the growth of tech stocks and AI. Brookfield posted a 10% increase in its funds from operation (FFO) to $2.3 billion in 2023, and it using its resources to buy companies to further drive growth. Last year it bought Triton international, the world’s largest owner and lessor of intermodal containers, for $13.3 billion. It also acquired Data4 and Compass, and in January it completed its $775 million purchase of data colocation company Cyxtera, which it plans to combine with its other US colocation company, Evoque. The company raised its dividend by 6% this year to $0.405 giving it a FFO payout ratio of 66%. Thanks to the company’s new acquisitions, FFO is expected to increase in the near future, providing ample opportunity for more dividend increases.
Realty Income made our list of the best dividend stocks because of its consistent dividend increases and unusual method of monthly payouts to shareholders. It has garnered a loyal following among investors who like the idea of having a dependable passive income stream from dividends each month. Its shares took a slight hit when it said it was acquiring Spirit Realty in an all-stock merger worth roughly $9.3 million on concern that the transaction will increase the company’s debt. However, the transaction further diversifies the REIT’s portfolio, giving it an advantage because if one industry is lagging, the company leases properties to other industries that are thriving. Even before the Spirit deal, its 1,303 clients were spread across 85 industries. The combined company will be the fourth largest REIT in the S&P 500 Index with a $63 billion enterprise value, which means the stock will be included in more index funds, potentially driving up the stock’s price.
Lowe’s operates more than 1,700 home improvement stores in the US and we chose it as one of the best dividend stocks because of resilient margins and EPS despite a slowdown in housing starts. As home construction took a hit from rising interest rates so did the company’s revenue but, but not its profit. In fiscal 2024 that ended Feb. 2, revenue plunged 11% to $86.4 billion, net profit rose to $7.7 billion from $6.4 billion in the previous fiscal year. EPS rose to $13.24 from $10.20 a year earlier. Lowe’s has increased its dividend for more than 25 consecutive years and it raised its shareholder payout by 5% last year to $1.10 per share quarterly, equaling a yield of around 1.9%. The dividend is well covered, with a payout ratio of 24.1%, so there’s a reason to expect continued dividend raises.
We included Microsoft among the best dividend stocks because, unlike many high-growth tech companies, it makes dividend payments and also, it stands to benefit from the adoption of artificial intelligence. Its purchase of ChatGPT creator OpenAI is a long-term investment that is already paying off and the company has been adding AI features to its Bing browser and suite of Office products. In the September to December quarter, revenue rose 18% year-on-year to $62 billion, and profit rose 33% from a year earlier to $21.9 billion. With all that profitability, the company’s dividends are due to keep increasing, especially since the current payout ratio is low at 25.1%.
Coca Cola made our list because it has been able to consistently increase its dividend as its revenue and EPS continue to grow and its strong brand presence gives it a competitive edge that few companies can match. In the fourth quarter, revenue rose 7% over the same period last year to $10.8 billion. EPS declined 2% to $0.46, while comparable EPS (a non-GAAP measure) grew 10% to $0.49. It also raised top-line and bottom-line guidance for 2024. The company may have even benefited from inflation. Cash-strapped customers who used to eat out more at a higher-end restaurant are eating more fast-food meals, and that means more Coke beverage sales. Coca-Cola’s quarterly dividend yields around 3.23%. While the payout ratio is a little high at above 74%, with the growth and profitability prospects that’s a small concern. We expect it to remain among the top dividend stocks.
Seagate is going through a rough patch, but, in our view, the data storage company is headed for a turnaround. In the third quarter of fiscal 2024, the company posted revenue of $1.66 billion, down 11% on a year-over-year basis, but rising 6% sequentially. Earnings per share, adjusted for non recurring items, totaled $0.33, more than doubling from $0.12 in the previous quarter. Adjusted loss per share was $0.28 in the year-ago quarter. For the fiscal fourth quarter, the company projects revenue of $1.85 billion, plus or minus $150 million, and adjusted EPS of $0.70, plus or minus $0.20. Seagate sees a strong demand for hard drives because of the increasing need in the US for cloud computing, especially helped by the spread of AI. The company has increased its dividend by 62% over the past decade, but it has not raised it since 2022. However, at $0.70 per quarterly share, the yield is an above-average 3.35%.
Banner is a top dividend stock for having increased its payouts to shareholders by 220% over the past decade, with the last increase being more than 9%. The dividend is well protected with a payout ratio of around 35.9%. A payout ratio of between 30% and 50% is considered healthy. The banking group’s stock price is down 15% this year, however, it’s trading at less than 10 times earnings, which means that it’s a potential bargain for dividend seekers. The company’s dividend of $0.48 equals a yield of around 4.2%. Banner’s key earnings numbers were down in its most recent quarter. Net income of $37.6 million, or $1.09 per diluted share, for the quarter, compared to $42.6 million, or $1.24 per share, for the preceding quarter and $55.6 million, or $1.61 per share, for the first quarter of 2023. Revenue in the quarter totaled $144.6 million, falling 5% from the previous quarter and down 11% from a year earlier.
The eToro platform has over 3,000 stocks currently listed on its offering, all of which have been included in our list of best dividend stocks. Founded in 2007 and regulated by leading bodies in the US, UK, and Europe, eToro has become the go-to destination for stock traders, due to its unique social trading features. This enables new investors to mirror the trades of more seasoned vets, copying those who have a track record of high performance. eToro holds various regulatory licenses across the globe, from the United Kingdom, the US, Europe, and Australia, meaning that client funds are held in secure segregated accounts. Over 30 million traders currently use the platform, which offers around-the-clock support in more than 20 languages. One of the main competitive advantages it has over other platforms is its low costs. eToro charges zero commissions, with all costs wrapped up into the spread, which is the difference between the buy and sell price. So if you want to buy Carlisle Companies stock, the price is currently $351.49, the sell price is $349.74, and the difference is under $2 in the spread. This is less than IG, which charges up to $8 for the same trade. Pros Cons
Dividend stocks distribute a portion of the company’s earnings to shareholders. Dividends are usually paid quarterly, but can be given monthly, every six months or yearly. They are either paid out in cash or are reinvested in additional stock. Common shareholders of dividend-paying companies are eligible to receive a distribution as long as they own the stock prior to the ex-dividend date. The dividend yield is the dividend per share and is expressed as a percentage, such as 2.5%, calculated A key indicator for dividend stocks is their payout ratio. The payout ratio shows how much a company pays shareholders in dividends as a percentage of its net income. The higher the payout ratio, the bigger the risk that the dividend may become unsustainable. Dividend stocks distribute a portion of the company’s earnings to shareholders, as determined by the company’s board of directors. Dividends are usually distributed quarterly, but can be done monthly, every six months or yearly. They are either paid out in cash or are reinvested in additional stock. The annual dividend yield is the dividend per share and is expressed as the dividend payments over the past year as a percentage of a company’s share price, such as 2.5%. Common shareholders of dividend-paying companies are eligible to receive a distribution as long as they own the stock prior to the ex-dividend date. A key factor at looking at companies that pay dividends is their payout ratio, sometimes called the dividend payout ratio. The payout ratio shows how much a company pays shareholders in dividends as a percentage of its total earnings. In other words, if a company is paying too high a payout ratio, the dividend is likely to be unsustainable. Dividend stocks can provide stability to an investor’s portfolio. Through quarterly distributions, investors can count on regular payments to use for bills, to reinvest in those same dividend stocks or to invest in something else. There are no guarantees in the stock market, but dividends, and dividend stocks tend to be more consistent than stocks that do not pay dividends. Buying a stock with an above-average dividend yield also allows investors to think more in long-term concerns, because even if the stock falters, unless it’s a huge loss due to a financial crisis, the dividend will still be paid. Dividend ETFs are a great way for new investors to increase their income with less risk. They also provide a monthly cash flow for investors that is already diversified. Take the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG), the Schwab US Dividend Equity ETF (NYSEMKT: SCHD) or the Vanguard High Dividend Yield ETF (NYSE: VYM). All three have a low expense ratio of 8% or below and double-digit returns over the past five years. ETFs can take the guesswork out of when to get into a dividend stock and when to exit, if the company’s financials may point to a potential dividend cut. Choosing the right dividend stock can seem complex. It’s not just about picking a stock with a high annual dividend yield. That can be a recipe for disaster because stocks with ultra-high yields often have too high a payout ratio and a dividend cut is likely, along with a subsequent tumble in the stock price. These stocks are known as dividend traps and there are plenty of examples in recent years where a company with a high-yielding dividend had to cut its dividend and the stock plunged, such as General Electric, AT&T, Royal DutchShell and more recently, Medical Properties Trust. The best way to avoid a dividend trap is to compare the stock to others in its sector, to see if the dividend seems too good to be true. Companies with rising payout ratios can turn into dividend traps. A good rule of thumb is a payout ratio should be between 30% and 60%. Stocks with higher payout ratios may be struggling to generate enough profits to cover its dividend payments. Sometimes, though, a very low payout ratio may mean the same thing, that the company needs all of its profits to keep afloat. There are exceptions to the high payout rule. Real Estate Investment Trusts (REITs), for tax purposes, are expected to return at least 90% of their taxable income to shareholders, so they tend to have higher payout ratios. One method many investors use is looking for stocks with a consistent record of dividend increases. Those that have raised their dividends for at least 25 consecutive years are known as dividend aristocrats and those that have raised their dividends for 50 or more consecutive years are dividend kings. If you’re not invested in a diversified dividend ETF, it’s important to choose your dividend investments in a way that’s balanced by industry and by size. That reduces the risk, for example, if an economic trend, government decision or new regulation hits one industry particularly hard. Smaller companies tend to grow their dividends at a faster rate, but because they have less free cash flow, they can often have more risk. Larger companies are more likely to be able to sustain regular dividend increases, but their dividend yields tend to be lower. We’ve established that finding the highest dividend stocks to invest in is a laborious task. The process requires significant research and analysis. For further information regarding dividend stock picks, we recommend checking out AltIndex and Benzinga Pro. AltIndex provides stock picks, alerts, and insights using alternative data. This means that it analyzes social media and other websites, app downloads, customer satisfaction ratings, and other data points regarding a company. It tracks this data over time, compares it to other companies, and then uses machine learning to generate investment insights. Stocks are given a ranking score out of 1 to 100, simplifying the analytical process that can often be very difficult for stock investors. With over 10k members, AltIndex is a widely used and trusted service. It provides over 100,000 unique daily stock insights and alerts, and has a very impressive win rate of 75% from its AI stock picks. You can try AltIndex’s Starter Plan for just $29 a month and receive stock picks directly to your email, as well as a range of other useful features. The next place to access stock tips and insights is Benzinga Pro – a financial news and research service that provides stock traders with real-time information. Benzinga Pro offers an array of features that cater to both novice and experienced traders, including stock alerts, actionable trade ideas, and detailed charting tools. One of its highlights is Daily Trade Picks, where professional traders share live trade ideas throughout the day, making it easier to spot opportunities in real time. The platform also provides exclusive market-moving stories, offering early access to news that can impact stock movements. Another useful feature is the Audio Squawk, which streams live market updates, allowing users to stay informed without constantly watching their screens. With three pricing options, ranging from the Basic plan at $37 per month to the Essential plan at $197 per month, Benzinga Pro gives traders various levels of access to advanced tools like real-time scanners and more. It’s a great option for day traders looking for fast, actionable insights.
Focusing on dividend stocks can be a great way to upgrade your portfolio. The key to investing in dividend stocks is finding companies with healthy balance sheets that have a likelihood of increasing or at least continuing their dividends. It’s also important to make sure the dividends are safe in terms of a company’s payout ratio. One way to address the safety of a particular stock is to take a deep dive on the company’s earnings. eToro can help with that as it uses a multifaceted approach to providing data that can be leveraged for making better decisions.
10 Best Dividend Stocks to Invest in 2024
A Closer Look at the Top Dividend Stocks to Buy
1. Carlisle Companies – Best Dividend Stock to Buy Right Now
Ticker
Industry
Dividend Yield
NYSE: CSL
Building Supplies
0.89%
2. AbbVie – Best Stock for Long-Term Dividend Growth
Ticker
Industry
Dividend Yield
NYSE: ABBV
Pharmaceuticals
3.6%
3. SunCoke Energy – Best Dividend Stock for Contrarian Investing
Ticker
Industry
Dividend Yield
NYSE: SXC
Materials
3.54%
4. Brookfield Infrastructure – Trending Dividend Stock for Tech Growth
Ticker
Industry
Dividend Yield
NYSE: BIPC
Utilities
4.92%
5. Realty Income – Popular Dividend Stock for Monthly Returns
Ticker
Industry
Dividend Yield
NYSE: O
Real Estate
5.79%
6. Lowe’s – Popular Dividend Stock for Safe Returns
Ticker
Industry
Dividend Yield
NYSE: LOW
Home Improvement
1.89%
7. Microsoft – Top Dividend Stock for Steady Share Price Growth
Ticker
Industry
Dividend Yield
NASDAQ: MSFT
Information Technology
0.72%
8. Coca-Cola – Established Dividend Stock for Shielding From Inflation
Ticker
Industry
Dividend Yield
NYSE: KO
Consumer Staples
3.09%
9. Seagate Technology – Best Dividend Stock for an Earnings Rebound
Ticker
Industry
Dividend Yield
NASDAQ: STX
Information Technology
3.34%
10. Banner Corporation – Best Dividend Stock With a Safe Payout Ratio
Ticker
Industry
Dividend Yield
NASDAQ: BANR
Financials
4.22%
eToro – Best Platform for Buying Dividend Stocks
What Are Dividend Stocks?
Dividend Yield
by dividing the companies annual dividend payments by the share price. This shows the annual dividend yield. It’s used to evaluate a stock’s return on investment. However, a high dividend yield sometimes masks problems that push the share price down. That’s why a decision on investing in a dividend stock should be made after analysing the company’s financials.Payout Ratio
Why Invest in Dividend Stocks?
Are There Dividend ETFs?
How to Pick the Best Dividend Stocks to Invest in
How to Avoid a Dividend Trap
Look for a Consistency of Dividend Increases
Diversification is Important
Where to Get Dividend Stock Tips and Insights
AltIndex
Benzinga Pro
Conclusion
References
FAQs
What are stock dividends?
How do stock dividends work?
Which stocks pay monthly dividends?
Which stocks have the best dividends?
Jim Halley
EditorI am an experienced journalist who has also worked as an editor and writer at the Savannah Morning News, Salt Lake Tribune, USA Today, Stars and Stripes, and The Motley Fool. I spent the first half of my career in sports journalism, but in recent years have switched to writing about my other passion, stocks, particularly healthcare, real estate and consumer staples stocks. I've won numerous journalism awards from the Associated Press and state press associations and have been a judge for the Georgia Sportswriters Association. I've written one non-fiction book, Just One More Time, about Georgia Southern football, and…
