Companies are then screened for quality using the Morningstar Economic Moat and Uncertainty Ratings. Specifically, companies must earn a moat rating of narrow or wide and an Uncertainty Rating of Low, Medium, or High; companies with Very High or Extreme Uncertainty Ratings are excluded. Given ongoing economic uncertainty and stock market volatility, investors looking for the best dividend stocks today might consider adding undervalued, quality dividend stocks to their portfolios. In August 2022, Illinois Tool Works raised its quarterly dividend by 7% to $1.31 cents a share, bringing its streak of annual increases to 51 years. However, the company notes that excluding a period of government controls in 1971, that streak would stretch to 58 years.

At Morningstar, we think that the best dividend stocks aren’t simply the highest dividend stocks. Instead, we suggest investors look beyond a stock’s yield and instead choose stocks with durable dividends—and buy those stocks when they’re undervalued. The following table lists the top 100 exchange-traded funds with the highest dividend yields. The dividend yield is calculated by dividing the most recent dividend payment by the price of the fund. Although the economy ebbs and flows, demand for products such as toilet paper, toothpaste and soap tends to remain stable. That hardly makes P&G completely recession-proof, but it does make the grade as one of the best dividend stocks because it’s an equity income machine.

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Low single-digit dividend growth could begin in the next couple of years as coverage continues improving. If a company can pay out a higher dividend yield compared to other similar companies in its sector, this can be a sign that the company is more financially healthy than its competition. The dividend yield is a percentage that allows investors to quickly see what the dividend-only return of a stock would be if they invest in it. A mutual fund is an investment vehicle consisting of a portfolio of stocks, bonds, or other securities, overseen by a professional money manager. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors.

At current prices, Lincoln National trades with a dividend yield of 8.5%. The dividend is well-covered with a payout ratio of just above 20%, based on the consensus earnings-per-share estimate for the current year. Brookfield Infrastructureoperates a diversified portfolio of infrastructure businesses focused onutilities, transportation, energy midstream, and data. The businesses generate relatively stable cash flow to support its growing dividend. The company delivered its 14th straight year of increasing its payout in early 2023. You can screen for stocks that pay dividends on many financial sites, as well as on your online broker’s website.

Kinder Morgan has grown since its formation in 1997 to become of the largest midstream infrastructure companies in North America. The firm makes most of its money from natural gas pipelines, with remainder balanced between refined products and oil pipelines, storage, and sales of carbon dioxide used in oil production. International Paper looks poised to be a more dependable high dividend stock today. For example, the company’s BBB rated balance sheet is the healthiest it has been in at least a decade, reflecting management’s debt reduction efforts and avoidance of major acquisitions. The proportion of earnings a company pays out to shareholders in the form of dividends.

Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)

In addition to those criteria, they also screened for companies that have solid earnings outlooks, so that they are likely to maintain their dividend payouts. The result is a list of 9 stocks that they believe are worth owning now. It’s a percentage that represents the income that a company pays stock investors compared to the price of the stock. Dividend yield is just one metric that may help investors to decide whether or not a company’s stock can make a good addition to their portfolios. The company’s policy is to distribute 30-50% of net earnings to shareholders in the form of an annual dividend, with additional earnings going toward share buybacks and capital expenditures. The 75 highest-yielding stocks that pass the quality screen are included in the index, and constituents are weighted according to the total dividends paid by the company to investors.

One of the largest chemicals producers in the world, Dow has carved out a narrow economic moat thanks to cost advantages derived from its ethylene and propylene manufacturing operations in North America. The firm has maintained a healthy balance sheet and has paid out a flat $2.80 in dividends per share the past three years, which we view as sustainable. Medtronic’s plans to spin off its patient monitoring and respiratory innovations businesses will only help the company pivot more toward faster-growing markets, she adds. The company has paid a cash dividend every year since going public in 1948 – or 67 consecutive years. The last hike – a 6.1% improvement to 95 cents per share quarterly – came in February 2023. Shares took a beating during the worst of the pandemic, but went on to beat the broader market handily over the next couple of years.

The lower the Best high yield dividend stocks ratio, the better, because dividends have more earnings coverage. City Office currently trades with a very strong dividend yield of 12.8%, which is very strong. Its target markets possess a number of attractive demographic and employment characteristics, which the trust believes will lead to capital appreciation and growth in rental income at its properties.

Coupled with a saturated smartphone market and more aggressive promotions from AT&T and T-Mobile, this has made for a challenging competitive environment. Experiential or service businesses such as convenience stores, automotive service, restaurants, gyms, and entertainment centers are the REIT’s largest exposures and drive around 60% of rent. The retail REIT has delivered predictable results for decades, thanks in part to its triple-net leases that require tenants to pay for insurance, maintenance, utilities, and property taxes. National Retail thus serves purely as a landlord, collecting a recurring stream of high-margin rent. With hard-to-replicate assets connected to nearly every major U.S. shale basin, Enterprise enables many energy producers to enter a single relationship to move their products to downstream buyers. These operationally essential properties are also occupied mostly by larger companies, such as U-Haul and Marriott, which are better equipped to weather economic downturns.

Best international dividend ETF

The insurance company last raised its payout in May 2022, by 3.8% to 83 cents a share per quarter. With that move, Chubb notched its 29th consecutive year of dividend growth. The highest yield isn’t everything when it comes to finding the best dividend stocks. Income investors know there’s no substitute for regular dividend increases over the long haul. In addition to income, dividend ETFs also provide the potential for capital appreciation. By investing in dividend-paying companies, these funds benefit from both earnings growth and dividend payments.

View our list of high-dividend stocks, and learn how to invest in them. Our list of MLP stocks includes dividend yields, Dividend Safety Scores, and analysis of all 42 MLPs, including the 5 best MLPs for income. The company’s impressive dividend track record also reflects management’s conservative approach to running the business.

There are many categories of dividend ETFs, spanning index funds, regions and quality dividend stocks like the dividend aristocrats. Others focus on stock market sectors known for offering high yields, like REITs, utilities or on preferred stocks. Dividend ETFs can be a more convenient way to pursue income investing than owning and managing your own basket of individual dividend stocks. Unlike the coupon payments on bonds, dividend payments are never guaranteed—that makes maintaining a portfolio of dividend stocks more labor intensive for individual investors.

Who Should Invest in Dividend ETFs?

This https://forex-world.net/ stalwart and its various predecessors have strung together uninterrupted payouts since 1882. To its credit, XOM was one of the few energy companies that didn’t cut or suspend its payout amid the pandemic-caused crash in oil prices. Most recently, in July 2022, CTAS raised its quarterly dividend by 21.1% to $1.15 per share. It also happens to be the lone energy-sector name among the 30 stocks in the Dow Jones Industrial Average. Generous military spending has helped fuel this dividend stock’s steady stream of cash returned to shareholders. Indeed, General Dynamics has upped its distribution for more than three decades now.

In times of recession, when some companies trim or eliminate their dividends in order to stay afloat, proven dividend-growers are more likely to maintain their payouts. That leads us to Vanguard’s dividend growth fund, Vanguard Dividend Appreciation. But in terms of guaranteeing rising payouts over time—kind of like giving yourself a raise every year—this fund is the way to go. What I prefer is a strategy that has outperformed the markets by a huge margin since the 1930s. It’s a strategy that does not rely on hoping a stock maintains its dividends or sustains enough cash flow to support its dividend yield. The reason why looking at a dividend yield — and companies that consistently provide a dividend — works so well with other value investing principles is that it could add to a company’s margin of safety.

Iron Mountain is back in the spotlight after posting strong earnings that show impressive growth. It’s also a top play in dividend stocks, allowing risk-averse investors to enjoy the best of both worlds. While troubled, prospective speculators should note that Innovative features a cash-rich balance sheet. Its three-year revenue growth rate comes in at 33.7% while its net margin stands at nearly 56%. Therefore, sustainability will be a concern, making IIPR appropriate for speculators.

The company has a network of approximately 550,000 agents globally and operates in more than 200 countries. Western Union operates three business segments, Consumer-to-Consumer , Business Solutions, and Other . Underlying business performance has been solid, and it is expected that profitability will be strong this year as well. At the same time, Lincoln National trades at a very inexpensive valuation, in part due to the sell-off among financial stocks in early 2023. Dividend aristocrats — a group of S&P 500 stocks that have increased their dividends every year for at least 25 years. Michael Randall, CFP®, EA is a senior wealth advisor at Myers Financial Group, a fee-only fiduciary wealth management firm based in San Diego, California.

Each of its top holdings, listed above, throws off income of well above 3% apiece. By excluding companies that don’t meet that core criteria—of rising dividends over time, that the company is able to afford—the fund has built a portfolio of winners. Just look at the fund’s powerful track record, according to Refinitiv Lipper data, of returning almost 12% a year over the last 10 years. In addition to income, of course, dividend-paying stocks can rise in value, offering you two ways to build wealth. Over the long-term Vanguard High Dividend Yield has been remarkably consistent, delivering an 8.86% annual return over the past three years, and 9.77% per year over five years.

The calculation is net operating profit after tax divided by invested capital, which is debt and equity plus any cash generated from financing and investing. The most recent payout in January, 2023 was $0.2625 per share, an increase of $0.0125 from the prior quarter. In 2018, HP’s quarterly dividend was $0.1393—it’s nearly doubled since then. IBM is one of the largest tech companies in the U.S. and earns more than two-thirds of its revenue from software and consulting services.

As the biggest BDC, Ares Capital’s vast capital base enables the company to serve businesses of all sizes and provide financing over a firm’s entire life cycle, creating longer-term relationships. Today, structured loans continue to account for around one-third of Arbor’s earnings. This business provides floating-rate bridge loans to real estate owners and developers so they can buy properties until the obtain permanent financing (e.g. a conventional mortgage). Either way, DOC’s high dividend looks like a good bet for conservative income investors.

MMM notes that it has returned more than $14 billion to shareholders through dividends and share repurchase over the past three years. EPS growth, however, is forecast to increase at a double-digit percent rate. While ITW sells many products under its namesake brand, it also operates businesses including Foster Refrigerators, ACME Packaging Systems and the Wolf Range Company.

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Management’s plans for 2023 include a continuation of their strategy to balance earnings growth and shareholder returns with strategic investments. High dividend stocksare stocks with a dividend yield well in excess of the market average dividend yield of 1.7%. Telecommunications giant Verizon has been a great income stock over the years. The company delivered its 16th consecutive annual dividend increase in 2022, the longest current streak in the U.S. telecom sector. Verizon should be able to continue increasing its dividend as it invests to transition its mobile network to 5G, bringing faster data speeds to its customers. As one of the largest apartment owners in the country, AvalonBay benefits from collecting steady rental income to support its high-yielding payout.

The license fee for such use is paid by the sponsoring financial institution based mainly on the total assets of the investable product. Please click here for a list of investable products that track or have tracked a Morningstar index. Morningstar, Inc. does not market, sell, or make any representations regarding the advisability of investing in any investable product that tracks a Morningstar index.

• To find out more about how we vetted funds, see our methodology below.
• Screen those S&P 500 constituents by dividend yield and payout ratio.
• While the company reset its payment level during the financial crisis, it has increased the dividend 20-fold since that time.
• It’s not uncommon for the highest-yielding stocks to suffer greatly during market declines.
• We love that its payout is almost a half percentage point higher, at 3.4%—and more than double the S&P 500’s average yield of 1.67%.

The iShares International Developed Property ETF tracks the S&P Developed ex-US Property Index. This index casts a very wide net, covering the entire investable universe of public property investment firms in developed countries outside the U.S. With Titan, you can invest in actively-managed stock and crypto portfolios, as well as in alternative asset classes like Real Estate, Private Credit, and Venture Capital. Certain financial information included in Dividend.com is proprietary to Mergent, Inc. (“Mergent”) Copyright © 2014.

The dividend payout ratio is the measure of dividends paid out to shareholders relative to the company’s net income. Two key advantages of investing in dividend stocks include generating a passive income and dividend reinvestment. Build a watchlist of the best dividend stocks in Morningstar Investor and create a view that allows you to easily follow the valuations, ratings, and dividend yields of the stocks on your list. Happily for shareholders, the sudden and sharp downturn couldn’t stop SYY from hiking its dividend for a 53rd consecutive year.

This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. However, Pinnacle’s high dividend yield reflects the recent deterioration in the firm’s relationship with the Arizona Corporation Commission , the state utility regulator.