Best Dividend Stocks

The Best Dividend Stocks to Watch

The following “Best Dividend Stocks” list features Income Investors’ favorite dividend ideas, thoroughly vetted and highly rated by our research team.

The stocks below have been hand-picked by our editors. Our five-point investment criteria identifies companies with safe payouts, growing earnings, and a long-term track record. The list is geared toward conservative buy-and-hold investors looking to put new money to work right now.

To be clear, every stock on this list is not appropriate for all investors. Our best dividend stocks list does not represent a complete portfolio. We recommend readers do their own research and consult a professional financial adviser before making any investment decision.

What We Look For

Timeless Business: We look for businesses that have stood the test of time. In some cases, the products that they make have remained almost unchanged for decades. Many of these stocks have been paying out dividends to shareholders for over 100 years.

Competitive Advantage: We look for companies with sustainable advantages. They have patents, powerful brands, irreplaceable assets, a low-cost advantage, or de facto monopolies. By sheltering their profits from competition, these firms can generate oversized margins decade after decade.

Management: We look for great executives who think beyond the next quarter. We want to own companies run by honest managers with above-average skill for allocating capital. We want people with unquestionable integrity, a frank communication style, and a long-term outlook.

Distribution Growth: We look for firms with a commitment to rewarding shareholders. Our best dividend stocks have raised their regular distributions for at least 25 consecutive years. Steady dividend increases signal that the company has a bright future and forces management to be careful when allocating capital.

Dividend Yield: We look for stocks with above-average dividend yields. A high payout suggests that a company might be temporarily out of favor with investors. Studies show that companies with the highest dividend yields tend to outperform the broader market over time.

Best Dividend Stock List

Company Name Ticker Yield Industry First Year of Dividend Increase
AT&T Inc. T 5.1% Telecom Services 1985
HCP, Inc. HCP 4.7% REIT – Healthcare 1986
Target Corporation TGT 4.4% Discount Stores 1968
Chevron Corporation CVX 4.1% Integrated Oil and Gas 1988
AbbVie Inc ABBV 3.9% Drugs and Biotech 2013*
Exxon Mobil Corporation XOM 3.8% Integrated Oil and Gas 1983
Consolidated Edison, Inc. ED 3.4% Diversified Utilities 1975
The Coca-Cola Co KO 3.3% Beverages – Soft 1963
T. Rowe Price Group Inc TROW 3.3% Asset Management 1987
Emerson Electric Co. EMR 3.3% Electronics 1957
Procter & Gamble Co PG 3.2% Personal Products 1957
VF Corp VFC 3.1% Apparel 1973
Kimberly-Clark Corp KMB 3.0% Personal Products 1973
Archer Daniels Midland Company ADM 3.0% Agribusiness 1976
Genuine Parts Company GPC 2.9% Auto Parts Wholesale 1957
Cincinnati Financial Corporation CINF 2.9% Insurance 1961
Leggett & Platt, Inc. LEG 2.8% Home Goods 1972
Johnson & Johnson JNJ 2.7% Drugs and Biotech 1963
PepsiCo, Inc. PEP 2.7% Beverages – Soft 1973
Wal-Mart Stores Inc WMT 2.6% Department Stores 1975
Air Products & Chemicals, Inc. APD 2.6% Chemicals 1983
McDonald’s Corporation MCD 2.5% Restaurants 1977
SYSCO Corporation SYY 2.4% Wholesale Food 1971
3M Co MMM 2.3% Conglomerates 1959
AFLAC Incorporated AFL 2.3% Insurance 1983

*AbbVie Inc (NYSE:ABBV) is a spinoff from Abbott Laboratories (NYSE:ABT). Its first dividend was issued in 2013.

(Source: Various Corporate Filings, last accessed May 29, 2017.)

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