The top 25 dividend stocks in 2023 are excellent inflation hedges as they generate capital gains and appreciation to balance off rising prices. These businesses have consistently delivered long-term pricing stability, increased their profitability year after year, and increased annual dividend payouts for at least ten years.
Even though they have initially low yields, the best dividend stocks can generate greater total returns (price plus dividends) over the long term due to the fact that consistent dividend increases raise the yield based on an investor’s initial cost basis. If you hang around long enough, the modest return on your initial investment could eventually reach double digits. Let’s dive into the top 25 dividend stocks in 2023 you can invest in.
Top 25 Dividend Stocks 2023
Aside from the fundamental indicator, buyers shouldn’t purchase a stock just because of its dividend yield. The sustainability of the dividend payments must be ensured. It should be a reputable business with consistent cash flow, a solid balance sheet, and apparent growth prospects. These are the top 25 high-yield dividend stocks to keep in 2023.
Here’s a quick look at why each of these high-yield dividend stocks appears to be a good investment in 2023.
#1. Automatic Data Processing, Inc. (ADP)
ADP came top on our list of top 25 dividend stocks in 2023. They offer business services for payroll, insurance, and retirement. It has the highest dividend growth rate on the list and a strong history of increasing dividends. Over the past ten years, the stock’s returns have averaged 5.7% annually higher than those of the S&P 500. Late in 2022, ADP’s stock price reached a new high; it currently trades 19% below that level. Pullbacks of 15% to 20% usually present attractive opportunities to purchase the stock.
#2. Amgen Inc. (AMGN)
Amgen is a biotech enterprise that produces medicines for conditions like asthma, inflammatory and renal illnesses, and cancer. The yearly dividend payout amount has grown at a respectable rate over the past five years, and it has the second-highest dividend yield on the list.
The average annual EPS growth rate over the previous five years was 35.9%, and is expected to slow to 5.1% annually. The stock is currently trading about 18% below its all-time high and offers an appealing entry point during declines of 15% to 20% from the highs. AMGN also provides decent pricing stability, with 25% of its price lost over the past ten years. Over the past ten years, at least one loss of 50% or more has occurred in more than half of all American stocks.
#3. AbbVie
Coming third place on our list of top 25 dividend stocks in 2023 is AbbVie. It has a track record of paying out dividends since its 2013 separation from Abbott Labs. It has increased its payout each year, continuing the dividend growth tradition inherited from Abbott. Despite losing its patent-protected exclusivity for the best-selling medication Humira in 2023, more recent products like Rinvoq and Skyrizi should lessen the blow. As a result, it is in great form to maintain and grow the dividend income.
#4. AvalonBay Communities
AvalonBay benefits from receiving consistent rental income to maintain its high-yielding payment as one of the largest apartment owners in the nation. The real estate investment trust (REIT) moreover has a strong financial standing, which gives it the freedom to keep growing its apartment inventory by creating and acquiring new communities.
Although AvalonBay hasn’t increased its payout every year since its initial public offering (IPO) in 1994, the firm has boosted its dividend at a 5% yearly rate, notably by 3.8% in early 2023. In the upcoming years, the REIT should be able to keep raising its dividend because of the rising demand for units.
#5. Extra Space Storage
Extra Space Storage is a real estate investment trust (REIT) in the United States with a respectable dividend yield and strong dividend growth over the past five years. Over the following five years, analysts predict 6% EPS annually.
The share price has decreased by around 28% since its peak in December 2021, despite the company’s performance in comparison to the S&P 500 being among the best on the list. Dedicated to owning, running, and managing self-storage facilities, Extra Space Storage is a REIT and its stock has been among the best-performing ones in the REIT industry. For the past ten years, Extra Space Storage has nearly doubled its compensation. That is why we placed Extra Space Storage in the fifth spot on our list of the best 25 dividend stocks in 2023.
#6. Brookfield Infrastructure
With a focus on utilities, transportation, energy midstream, and data, Brookfield Infrastructure manages a diverse portfolio of infrastructure operations. To maintain its expanding dividend, the company’s cash flow is comparatively consistent. Beginning in 2023, the firm increased its dividend for a record 14 consecutive years.
Powered by the organic growth of its current operations and acquisitions, Brookfield plans to raise its dividend at a rate of 5% to 9% per year over the long term. Five investments totaling $2.9 billion were made in 2022, and they are expected to support growth over the ensuing years.
#7. Texas Instruments Inc. (TXN)
Texas Instruments is the world’s largest manufacturer of analog chips and is the second-highest rate of recent dividend growth. For the past five years, TXN has consistently increased its average earnings by more than 21%.
For the next five years, analysts predict an annual increase in EPS of 10%. The stock is down 14% from its peak in November but has outperformed the S&P 500 by 9% annually over the past ten years. The stock is the best-performing stock on the list by this metric, having outperformed the S&P 500 by 9% annually over the past ten years. That is why we placed Texas Instruments in the 7th spot on our list of the best 25 dividend stocks in 2023
#8. Brookfield Sustainable
Both Brookfield Renewable and Brookfield Infrastructure are owned by Brookfield Corporation (BN 1.71%), making them siblings. Including hydropower, wind, solar, and energy storage facilities, this Brookfield organization specializes in sustainable energy. Long-term power purchase agreements with utilities and other end users sustain the assets’ consistent cash flow generation and Brookfield’s high-yield dividend.
Also, the corporation anticipates long-term payout growth of 5% to 9% annually. The prediction is supported by both additional acquisitions as well as its internal growth drivers, which include a sizable pipeline of new renewable energy projects.
#9. Air Products & Chemicals, Inc. (APD)
APD is one of the biggest producers of helium and hydrogen worldwide and a provider of industrial gases. It is a consistent dividend performer that has significantly increased annual earnings. During the next five years, analysts forecast annual EPS growth of 10.7%.
Over the past ten years, the stock has managed to outperform the S&P 500 by an annual average of 3.5%. The stock is 9% below its all-time high set in December 2022.
#10. Consolidated Edison
An electric and gas utility serving the New York City metropolitan region is called Consolidated Edison, or ConEd. ConEd has a stellar track record of paying dividends. With the longest record of any utility in the S&P 500 index, the firm has grown its payout for the last 49 years running. The trend is unlikely to end soon. As the U.S. economy moves faster toward cleaner energy sources, ConEd is continuously investing in growing its operations, including more money spent on greener alternatives.
#11. Enterprise Products Partners
One of the leading companies in the midstream oil and gas business is Enterprise Products Partners. For approximately 25 years, the dividend stocks of the master limited partnership (MLP) keeps increasing, we are not excepting less in 2023.
Although the business’ current focus is on fossil fuels, it established an evolutionary technology group in 2021 to explore prospects in the energy transition. Future investments should provide Enterprise with the impetus it needs to keep raising its dividend.
#12. Crown Castle International
Crown Castle is a REIT that specializes in owning fiber optic cable, small cells, and other types of communication infrastructure in the United States. The 5G network, the next generation in the mobile industry, depends on this infrastructure. Crown Castle believes there will be opportunities to invest in new 5G-related infrastructure for decades to come, and that these opportunities should sustain 7% to 8% annual dividend growth. Since 2016, the dividend payment has increased at a 9% compound yearly rate.
#13. Digital Realty
A REIT that specializes in running data centers is called Digital Realty. The business has a strong history of paying dividends. It increased its dividend payment for the 17th consecutive year in 2022. Given the requirement for additional infrastructure to support the phenomenal rise of data globally, the increasing trend should continue.
#14. Enbridge
Over the years, the massive Canadian oil pipeline company Enbridge has been a top dividend stock. It has increased its dividend distribution every year for the past 28 years, totaling more than 68 years of dividend payments.
Enbridge is adjusting by making investments in the infrastructure necessary to enable offshore wind farms and natural gas projects as the globe switches from using oil as its primary source of fuel to cleaner alternatives. The company is on course to expand its cash flow per share at a mid-single-digit annual rate as a result of the investments over the next few years, which should support continuing dividend increases.
#15. Gilead Sciences
One of the most alluring dividends in the biotechnology industry is paid by Gilead Sciences. The business has a proven track record of paying dividends, increasing its distribution each year since it began doing so in 2015. The biotech’s dependable HIV property serves as its fulcrum.
Gilead has also been successful in making money off Remdesivir, one of the few COVID-19 medicines that have been approved by the FDA. Future revenue growth should be supported by the company’s pipeline of numerous other potential medications.
#16. Coca-Cola
Coca-Cola has been distributing dividends since 1920, and the most recent increase increased the quarterly dividend by 4.5% to 46 cents per share. In 2022, KO paid out $7.6 billion in dividends, and the business has distributed $63.8 billion in dividends to stockholders during the last ten years.
Coca-Cola has diversified its product selection beyond typical carbonated drinks by incorporating bottled water, fruit juices, sports drinks, and teas. In addition to the Coca-Cola brand, KO also sells products under the Minute Maid, Powerade, Simply Orange, and Vitaminwater labels.
#17. Product & General
Procter & Gamble is one of the largest consumer goods corporations in the world, known for iconic brands such as Tide detergent, Pampers diapers, and Gillette razors. It is a reliable source of equity income and has increased its dividend payment to shareholders since 1890. The most recent increase was a 5% increase to 91.33 cents per share quarterly in April 2022.
#18. 3M
The dividend stock 3M has been outstanding even though it’s coming 18th place on our list of top 25 dividend stocks in 2023. The industrial company has paid dividends for more than a century, and for the previous 65 years, has increased its payout every single time. Hence, it qualifies as a Dividend King. Early in February 2023, the corporation increased the quarterly distribution by a penny to $1.50 per share, which was the most recent increase. The continuous expansion has been fueled by the company’s strategy of making investments in new items. It has increased sales and made it possible for 3M to maintain raising its dividend.
3M claims that during the last three years, it has given back more than $14 billion to shareholders in the form of dividends and share repurchases.
#19. Illinois Tool Works
Illinois Tool Works is a multifaceted producer of industrial machinery and other goods. It manufactures equipment for a variety of industries, including food, construction, and automobiles.
The dividend yield offered by ITW is respectable, and the five-year dividend growth rate is excellent. Strong earnings, which grew 12.5% annually over the previous five years, have contributed to this. Experts predict that over the next five years, Earnings will increase by 5% annually.
Over the past ten years, the stock has outperformed the S&P 500 by 4.6% annually. Since mid-2022, the stock has been increasing, and it is currently trading 6% below its all-time high.
#20. Cincinnati Financial
Life insurance, annuities, umbrella insurance, and a variety of business insurance products are among Cincinnati Financial’s offerings. Cincy Financial is a property and liability insurer.
Shares suffered during the worst of the pandemic, but over the following few years, they easily outperformed the general market. The fact that investors could rely on their dividends was known even while CINF stock was bottoming out. Furthermore, Cincinnati Financial has one of the longest dividend increase streaks of any Dividend Aristocrat, stretching back 63 years and counting. Most recently, in January 2023, the P&C insurer increased its quarterly payout by 8.7% to 75 cents per share.
#21. Colgate-Palmolive
Consumer staples sold by Colgate-Palmolive include its own toothpaste and dish soap in addition to Speed Stick deodorant, Murphy cleaning supplies, and Tom’s of Maine personal care items. In both prosperous and difficult economic periods, demand for Colagte’s goods tends to be steady, which drives the free cash flow required to keep the dividend growing.
What a streak it is, too. The dividend paid by Colgate dates back to 1895, more than a century ago, and has been increased yearly for 61 years. The most recent payment increase for CL occurred in March 2023, when the quarterly payout was increased by 2.1% to 48 cents per share.
#22. Realty Income.
The REIT has delivered more than 630 consecutive dividend payments since it started doing so. Better yet, since its 1994 initial public offering, it has raised the payout by more than 100 times, growing at a 4.4% compound annual rate. In total, that’s more than 25 continuous years.
Acquisitions have been the main factor fueling that growth. Realty Income expands its portfolio, rental revenue, and dividend by acquiring single-tenant properties through sale-leaseback deals, acquiring bigger property portfolios, and joining forces with other REITs.
#23. Honeywell International Inc. (HON)
Honeywell International is a reliable dividend stock that provides a 2% return and typically increases dividends by 6.7% annually. It has the lowest dividend growth rate but is still very respectable. The last five years have been great for the business, increasing EPS by an average of 31.3% annually. The stock is currently trading 12% below its all-time high from 2021 and has rebounded quickly from the decline it experienced in 2022. Over the past ten years, the stock has outperformed the S&P 500 by 1.7% annually.
#24. Walgreens Boots Alliance
Throughout the previous 90 years, the world’s largest pharmacy, Walgreens, has increased its dividend payout every single time. The business believes the streak will continue. It is gradually evolving into a consumer-focused healthcare organization, which should speed up the increase of its earnings. The plan ought to make it possible for the business to keep raising its payment.
#25. W.P. Carey
A diverse real estate portfolio is owned by W.P. Carey, a REIT. Since its IPO in 1998, the company has had a strong track record of increasing dividend payouts. W.P. Carey has been able to continually increase the amount of cash-flowing commercial real estate in its portfolio, which is what has driven that growth. The REIT has the capacity to expand over the next few years thanks to its strong financial standing.
Which stocks pay dividends monthly?
Stocks that pay monthly dividends provide steady and increasing income, better reinvestment opportunities, and a chance for a greater return. Let’s explore monthly dividend payers, even though investors frequently choose dividend stocks like The Coca-Cola Company, Procter & Gamble Company, and Johnson & Johnson. We choose stocks with a yield of more than 5% dividends as of March 2023. We chose the equities that had the best sentiment among hedge funds. Below is a list of the top 5.
#1. Dynex Capital, Inc.
Dividend yield: 10.67%.
Dynex Capital, Inc. was founded in 1987 and is a mortgage real estate investment trust that makes leveraged purchases of mortgage-backed securities (MBS) in the US. On February 1, it distributed to stockholders a monthly dividend of $0.13 per share, with a yield of 10.67%.
Credit Suisse analyst Douglas Harter raised his price objective for Dynex Capital, Inc. from $13.50 to $15.50, believing that the current state of the economy favors agency-focused mortgage REITs due to broad spreads and a housing downturn. At the end of September 2022, 9 hedge funds were bullish on Dynex Capital, Inc., down from 13 firms the previous quarter. The company’s biggest shareholder, Balyasny Asset Management, holds 1.46 million shares worth $17 million.
#2. LTC Properties Inc.
Dividend yield: 6.12%
As a real estate investment trust, LTC Properties, Inc. primarily invests in senior housing and healthcare buildings through sale-leasebacks, mortgage financing, joint ventures, and structured finance options such as preferred stock and mezzanine credit. On January 3, LTC Properties, Inc. announced a monthly dividend of $0.19 per share, the same as before. The dividend was paid on January 31. The next payment is due to shareholders of record on February 17 and will be made on February 28. 5 hedge funds were bullish on LTC Properties, Inc. at the end of September 2022, with Ken Griffin’s Citadel Investment Management holding the largest position with 182,129 shares valued at $6.8 million.
#3. Sl Green Real Estate Corp.
Dividend yield: 7.37%
The SL Green Realty Corp. company specializes in acquiring, managing, and increasing the value of Manhattan-area commercial assets. On January 25, it reported Q4 2022 revenue of $224.87 million, up 15.6% year over year and $30.13 million higher than forecast. Baird analyst David Rodgers maintained a Neutral rating and increased the price target for SL Green Realty Corp. to $43 from $38. Marshall Wace LLP, a partnership between Paul Marshall and Ian Wace, is the company’s largest shareholder with 1.30 million shares valued at $52.4 million.
#4. EP Real Estate
Dividend yield: 7.37%
EPR Properties is a real estate investment trust that focuses on owning and financing experience properties like theme parks, theaters, ski resorts, and other entertainment facilities. It announced a $0.275 monthly dividend on January 12, and shareholders with records as of January 31 will get the dividend on February 15. Richard Milligan, an analyst at Raymond James, added EPR Properties to the firm’s Analyst Current Favorites list, but kept the Strong Buy rating and $45 price target unchanged. At the end of September 2022, 25 hedge funds were long EPR Properties, with Ken Griffin’s Citadel Investment Group being the largest shareholder with 1.25 million shares worth $44.8 million.
#5. AGNC Investment Corp.
Dividend yield: 12.04%.
AGNC Investment Corp. is a real estate investment trust based in Maryland that makes investments in collateralized mortgage obligations and residential mortgage pass-through securities with US government-sponsored enterprises or US government agencies guaranteeing the principal and interest payments.
On January 11, the company announced a monthly dividend of $0.12 per share, and Maxim analyst Michael Diana increased the price target to $12 and maintained a Buy rating. The tangible book value of AGNC Investment Corp. has increased by 8.4% at the end of the quarter and by an additional 10% since then, and the management team is upbeat about the prospects for Agency RMBS in 2023.
Does Tesla pay a dividend?
No, Tesla does not currently pay a dividend. The company has not paid a dividend since it went public in 2010. Tesla has typically reinvested its earnings back into the company for research and development, expansion, and other initiatives aimed at further growth. While some investors may prefer to invest in companies that pay dividends, others may be attracted to Tesla’s potential for capital appreciation and growth prospects.
With a market share of nearly 70%, Tesla dominates the sales of battery-powered electric vehicles in the US. The most popular EV vehicle in the US is the company’s flagship Model 3. Since its IPO in 2010, Tesla has grown significantly, earning the reputation of a gold standard along the way. In October 2021, its market cap surpasses $1 trillion for the first time. Tesla is much more than simply a car manufacturer; it is hailed as the renewable energy revolution in the auto industry.
Does Coca-Cola pay monthly dividends?
Coca-Cola doesn’t distribute a dividend each month. There are, of course, ways to receive dividends every month. Purchasing equities that pay dividends on a monthly basis is one such strategy. My favorite company that does this is Realty Income. The monthly dividend company is well-known.
Coke distributes dividends four times a year. For the majority of US-based dividend stocks, this frequency is normal. Dividends for Coca-Cola are paid in April, followed by July, October, and December.
How do you make $100 a month in dividends?
You want to get dividends of $100 each month. Right? Hence, it’s crucial to know when each company you choose pays its dividends.
Most American dividend stocks pay out four times a year, or once every three months. A corporation will often adhere to one of three common quarterly payment cycles. the following months: January, April, July, and October.
February, May, August, November, and December; March, June, and September.
To generate $100 a month in dividends, you would need to invest a total of $24,000 in dividend-paying investments that yield an average of 5% annually ($24,000 x 5% = $1,200 per year, or $100 per month). Look for stocks, bonds, or funds that have a history of paying consistent dividends. You can research dividend-paying investments online or consult with a financial advisor for recommendations.
What is the highest-paying monthly dividend?
Let’s look at the highest-paying monthly dividend you can invest in.
Stock #1: Hugoton Royalty Trust (HGTXU)
- Dividend Yield: 20.0%
Hugoton Royalty Trust was created in late 1998 when XTO Energy conveyed 80% net profit interests in some predominantly gas-producing properties in Kansas, Oklahoma and Wyoming to the trust. The trust, which produced 88% natural gas and 12% oil in 2021, has a market capitalization of $84 million. Even worse, when gas prices began to recover in late 2020, the trust had to wait for its revenues to offset past losses. Therefore, even though oil and gas output decreased, distributable income per unit recovered from $0.00 in the prior year’s quarter to $0.22.
Stock #2: ARMOUR Residential REIT (ARR)
- Dividend Yield: 17.9%
ARMOUR is a high dividend REIT that invests primarily in residential mortgage–backed securities that are guaranteed or issued by a United States government entity including Fannie Mae, Freddie Mac, and Ginnie Mae. It generated comprehensive income available to common stockholders of $39.5 million or $0.27 per common share. Distributable Earnings available to common stockholders was $38.8 million, which represents $0.27 per common share. It raised $174.2 million of capital by issuing 30,721,405 shares of common stock at $5.67 net proceeds per share, after fees and expenses, through an at-the-market offering program.
Stock #3: Orchid Island Capital (ORC)
- Dividend Yield: 17.3%
Orchid Island Capital, Inc. is a Real Estate Investment Trust, or REIT, operating in the mortgage industry. Orchid is an externally managed REIT (by Bimini Advisors LLC) that invests in residential mortgage-backed securities (RMBS), either pass-through or structured agency RMBSs, which are financial instruments that collect cash flow based on residential loans such as mortgages, including subprime, and home-equity loans. Interest income on the portfolio in the fourth quarter was down approximately $3.7 million sequentially. Net realized and unrealized gains amounted to $38.4 million, or $1.04 per share, on RMBS and derivative instruments, including net interest income on interest rate swaps.
How much should I invest in 1k a month in dividends?
You’ll need to put about $400,000 into dividend stocks in order to earn $1,000 each month in dividends. The dividend yields of the equities you purchase for your portfolio will determine the exact amount.
Determine how much money you can set aside each month to expand your portfolio by taking a closer look at your budget. With the significant sum of money you’ll need to accumulate in order to meet your $1,000 monthly dividend target, frequently adding to your portfolio will be beneficial. How long it takes you to attain your goal will depend in part on how much money you have available to invest each month. Maybe you may set a goal for yourself this year to earn $50 or $100 in dividends per month. It’s a wonderful starting point for expanding your monthly dividend portfolio in the future.
How much is 500 a month in dividends?
At a 1% dividend rate, $500 a month is equivalent to $6,000 per year in income. Hence, $100,000 must be invested in shares providing a 6% dividend yield in order to reach $6,000 in annual dividend income. You would need to invest $300K at a 2% rate. $200K at 3% or $150K at 4%. Below this rate, there is a greater danger of capital loss, and maintaining cash flow can become challenging.
To calculate how much $500 a month in dividends would require, you need to determine the yield of your investments. The yield is the percentage of return you receive on your investment.
For example, if you have a portfolio of dividend-paying stocks that yield 4% annually, then you would need to invest a total of $150,000 to generate $500 a month in dividends ($150,000 x 4% = $6,000 per year, or $500 per month).
However, it’s important to note that the actual amount of dividends you receive may fluctuate based on the performance of your investments, market conditions, and other factors. Additionally, investing always carries some degree of risk and past performance is not indicative of future results. It’s important to do your research and consult with a financial advisor before making any investment decisions.
Conclusion
Despite the fact that the 25 stocks on our list may offer high yields, they may not always be the best dividend stocks for a given investor. Your Individual goals and timeframes for achieving those goals influence the optimum portfolio, which differs from person to person. Spend some time before making an investment looking for businesses that are financially stable enough to maintain and possibly expand their dividends while still providing an attractive dividend return.
One last thing to note regarding dividend stocks is that you must have a long-term perspective in order to properly benefit from them. Investors gain from compounding by buying and keeping these stocks over time and reinvesting dividends. Hence, ensure that the companies whose stocks you own are in defensive industries and can provide strong profits regardless of what is occurring in the overall economy.
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