10 Stocks with the Juiciest Dividends in 2023

Investing for Income: Unlocking the Sweetest Dividends

When it comes to investing for passive income, dividends reign supreme. They offer a steady stream of cash flow that can supplement your income or grow your wealth over time. And while there are plenty of stocks that pay dividends, not all are created equal. To help you navigate the dividend landscape, we've compiled a list of the 10 stocks that offer the most attractive combinations of dividend yield, growth potential, and financial stability.

1. Realty Income (O)

• Dividend Yield: 4.4%
• Annual Dividend: $3.48
• Years of Dividend Increases: 99

Realty Income is a real estate investment trust (REIT) that specializes in acquiring and managing single-tenant commercial properties. Its long-standing reputation for consistent dividend payments and modest dividend growth make it a reliable choice for income-seeking investors.

2. Johnson & Johnson (JNJ)

• Dividend Yield: 2.7%
• Annual Dividend: $4.52
• Years of Dividend Increases: 60

Johnson & Johnson is a healthcare behemoth with a diverse portfolio of pharmaceutical, medical device, and consumer products. Its strong financial performance and commitment to returning cash to shareholders through dividends make it a blue-chip stock for income and stability.

3. Coca-Cola (KO)

• Dividend Yield: 2.9%
• Annual Dividend: $1.72
• Years of Dividend Increases: 61

Coca-Cola is the epitome of brand recognition and global reach. Its iconic products have stood the test of time, generating consistent cash flow that supports its long history of dividend payments and moderate dividend growth.

4. Verizon Communications (VZ)

• Dividend Yield: 5.9%
• Annual Dividend: $2.61
• Years of Dividend Increases: 16

Verizon is one of the largest wireless carriers in the United States. Its vast customer base and focus on dividend sustainability make it an attractive option for investors seeking a high yield with a moderate level of risk.

5. Chevron (CVX)

• Dividend Yield: 3.3%
• Annual Dividend: $1.48
• Years of Dividend Increases: 35

Chevron is an integrated energy company with operations in oil, gas, and refining. Its strong financial position and commitment to dividends, even during market downturns, make it a reliable choice for investors seeking energy exposure and dividend income.

6. Procter & Gamble (PG)

• Dividend Yield: 2.6%
• Annual Dividend: $1.14
• Years of Dividend Increases: 67

Procter & Gamble is a household name with iconic brands like Tide, Pampers, and Gillette. Its consistent product innovation and strong distribution network have led to decades of dividend increases and a stable dividend yield.

7. Walmart (WMT)

• Dividend Yield: 1.8%
• Annual Dividend: $2.24
• Years of Dividend Increases: 49

Walmart is the world's largest retailer, with a massive customer base and a proven track record of dividend payments. Its focus on low prices and convenience make it a reliable dividend payer in good times and bad.

8. AT&T (T)

• Dividend Yield: 5.5%
• Annual Dividend: $2.12
• Years of Dividend Increases: 36

AT&T is a telecommunications giant with a vast network of wireless, broadband, and fixed-line services. While its dividend yield is high, investors should note that the company has reduced its dividend in the past due to financial pressures.

9. AbbVie (ABBV)

• Dividend Yield: 4.1%
• Annual Dividend: $5.64
• Years of Dividend Increases: 12

AbbVie is a biopharmaceutical company with a portfolio of blockbuster drugs that includes Humira, the world's best-selling drug. Its strong cash flow generation and growth potential make it an attractive choice for growth-oriented income investors.

10. Duke Energy (DUK)

• Dividend Yield: 3.8%
• Annual Dividend: $4.10
• Years of Dividend Increases: 15

Duke Energy is an electric utility company that provides electricity to millions of customers across the United States. Its strong regulatory environment and commitment to dividend sustainability make it a reliable choice for investors seeking a steady income stream.

Tips and Tricks for Dividend Investing

• Consider your investment goals. Are you seeking a high yield, dividend growth, or a combination of both?
• Research dividend history. Look for companies with a long track record of consistent dividend payments and growth.
• Evaluate financial stability. Ensure that the company has strong financials, including a low debt-to-equity ratio and positive cash flow.
• Monitor dividend coverage ratio. This measures the company's ability to generate enough cash to cover its dividend payments.
• Seek diversification. Invest in a variety of dividend-paying stocks to reduce risk and smooth out returns.

Pros and Cons of Dividend Investing

Pros:

• Provides a steady stream of income
• Hedges against inflation
• Encourages long-term investment
• Potential for dividend growth and stock appreciation

Cons:

• Dividend payments can be cut or suspended
• High dividend yields may indicate financial distress
• Dividend income is taxed at higher rates than capital gains

FAQs

1. What is a good dividend yield? A good dividend yield is one that is sustainable in the long term, typically in the range of 2-5%.
2. How often do stocks pay dividends? Most stocks pay dividends quarterly, but some may pay monthly, semi-annually, or annually.
3. Are dividends taxable? Yes, dividend income is taxed as ordinary income, typically at a rate higher than capital gains.
4. Can dividend payments be reduced or suspended? Yes, companies can reduce or suspend dividend payments if they face financial difficulties.
5. What is the difference between a dividend and a share buyback? Dividends are cash payments made to shareholders, while share buybacks involve the company repurchasing its own shares.
6. Is it better to invest in high-yield dividend stocks or growth stocks? The best investment strategy depends on individual goals and risk tolerance. Consider the trade-offs between yield, growth potential, and financial stability.
7. How do I calculate the dividend coverage ratio? Divide the company's annual earnings per share (EPS) by its annual dividend per share.
8. What is the dividend payout ratio? This is the percentage of earnings that a company pays out as dividends. A high payout ratio may indicate less financial flexibility.