Want to make stable cash flow without selling your stocks? Dividend investing is a popular path for investors who want cash distributions that grow over time. Investors can reinvest these proceeds into additional shares, and companies tend to raise their dividends each year. Dividend investing creates the possibility of consistently growing cash flow that allows investors to hold onto their shares instead of selling them to cover living expenses in retirement. But some dividend stocks are better than others. This guide will showcase some of the top dividend stocks to consider.
Quick Look at the Top Performing Dividend Stocks:
Deep Dive
Looking for some good dividend stock ideas? These are some of the best dividend stocks to buy and hold.
1. Iron Mountain Inc. (NYSE: IRM)
Iron Mountain stores paperwork for 95% of the Fortune 1,000 companies and works with various governments. The company keeps important documents secure for its clients. While the company got started with securing physical documents, it also offers cybersecurity services.
2. Cisco Systems Inc. (NASDAQ: CSCO)
Cisco shares haven’t been too exciting for recent shareholders, but this year is shaping up to be an impressive one. Cisco reported double-digit revenue growth in the recent quarter and gave investors good guidance. Cisco gives investors exposure to cybersecurity, cloud and software. Recent growth and the company’s opportunities may support a higher valuation.
3. Bank of America Corp. (NYSE: BAC)
Bank of America is the second-largest bank based on assets under management. Many consumers and business owners flocked to financial institutions like Bank of America when some regional banks defaulted.
4. Broadcom Inc. (NASDAQ: AVGO)
Broadcom combines high dividend growth with rapid share price appreciation. The semiconductor giant is up by over 50% year to date and has almost quadrupled over the past five years.
5. Deere & Co. (NYSE: DE)
Deere & Co. manufactures farming, lawn care and other types of equipment. Although shares are roughly flat year to date, they have more than tripled over the past five years. Deere & Co. has a dividend yield of a little above 1%, but it has raised the dividend multiple times in some years.
6. Elevance Health Inc. (NYSE: ELV)
Elevance Health is an American health insurance provider that makes steady payouts from health insurance policies. Shares are up by almost 80% over the past five years and come with a dividend yield above 1.25%. Elevance Health’s double-digit year-over-year revenue and earnings growth can help power the stock higher and result in a high dividend growth rate.
7. American Tower Corp. (NYSE: AMT)
American Tower is a real estate investment trust that owns over 225,000 cell towers. That portfolio helps the company generate high cash flow for investors with some appreciation.
8. Sysco Corp. (NYSE: SYY)
Sysco is a top food distributor that is more resilient to recessions than other stocks. Shares are only up by 6% over the past five years, but the stock has a dividend yield close to 3%. Sysco isn’t a growth stock by any means, but the company can produce reliable cash flow for investors without the same vulnerabilities as a high-tech company.
9. Automatic Data Processing Inc. (NASDAQ: ADP)
Automatic Data Processing shares have gained roughly 80% over the past five years. The company provides human resources management software. The software has helped the company maintain double-digit profit margins.
Pros
Buying and holding dividend stocks presents many advantages for investors. The shares can appreciate in the long run, and you receive cash flow while you wait. Dividend-paying companies tend to increase their dividends every year, allowing you to reap more cash flow in the process. If you do not need the proceeds right away, you can reinvest the dividend into additional shares, ensuring your next dividend payment is higher than the previous one.
Where to Buy
Investors can choose from many dividend stocks, but they can also choose from many brokers. These are some of the top places to invest in dividend stocks.
Frequently Asked Questions
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Investors can choose from many reliable dividend stocks. However, it’s important for investors to consider their financial goals and risk tolerance before investing. Knowing those two things can help you determine what a reliable investment means to you.
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You can make $1,000 per month with dividend stocks by accumulating shares each month. Finding companies with higher yields can get you there faster, but you should avoid dividend stocks with high but unsustainable dividend payments.
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It is possible to live off of dividends. Most dividend-paying companies raise their dividends each year. That consistent growth combined with reinvestments and consistent contributions while you work can cover your retirement.
Best Dividend Stocks Methodology
This methodology involved looking for companies that have respectable dividend yields and appreciation potential. This list avoids high-growth, low-yielding dividend stocks. It also avoids high-yielding stocks that have seen their values decrease and have declining business models.