10 Best Dividend Stocks to Buy for Growing Income
There are hundreds of stocks that pay dividends. Some have high yields, while others pay little to nothing to shareholders. Although, dividend yields alone don’t help us determine the best dividend stocks to buy.
When buying income stocks, it’s important to look at both share price and the underlying value. The following Warren Buffett quote sums it up…
“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
With socks, it’s pretty easy to determine the quality relative to price. But when it comes to stocks, that’s the tough part. So the best investors take a close look at a stock’s underlying business and its future potential.
To come up with this list of top 10 dividend stocks, I started by looking at dividend consistency. All of the companies below have paid and raised their dividend for at least 10 consecutive years. This proven stability is a great sign and just one of many fundamental checks that helped them make the list…
Top 10 Dividend Stocks to Buy Now
Before we dive in, you might also be interested in this free investment calculator. It’s a modern tool that shows you how big your investments can grow. Will it take you five, 10 or 20 years to reach financial freedom? Or what rate of return will you need to double your money?
Walmart (NYSE: WMT)
Walmart is the world’s largest retailer, with more than 11,000 stores. This has allowed the company to pay a higher dividend each year. It’s raised and paid its dividend for the last 47 years. This long history almost makes Walmart an elite dividend king. The kings are companies that have paid and raised a dividend for at least 50 consecutive years.
Procter & Gamble (NYSE: PG)
Procter & Gamble is one of the world’s largest consumer goods companies. Many people find it to be a boring business, but boring pays big! Procter & Gamble is easily one of the elite dividend kings, with 64 years of consecutive dividend growth.
Coca-Cola (NYSE: KO)
Coca-Cola is a beverage giant that dates back to 1886. And since, the company has expanded to 500 different brands. This wide net helps the company produce steady cash flows. As consumer trends change, so does Coca-Cola.
CVS Health (NYSE: CVS)
CVS Health is one of the largest pharmacy chains in America. In 2018, the company merged with Aetna for $69 billion. This pushed debt levels higher, but the same is true for revenue. As America’s population continues to age, CVS Health’s cash flows and dividends should climb higher.
IBM (NYSE: IBM)
IBM is one of the world’s oldest tech companies. It’s built up an impressive list of patents and is transitioning away from some old-school revenue drivers like mainframes. Some new revenue drivers include cloud services, Watson and cyber security.
Exxon Mobil (NYSE: XOM)
Exxon Mobil is one of the largest oil and gas producers in the world. And although renewable sources are growing, fossil fuels will still be a dominant source for the next few decades. This gives Exxon plenty of time to transition and continue paying shareholders. For decades, Exxon Mobil has been one of the best dividend stocks to buy.
Walgreens Boots Alliance (Nasdaq: WBA)
Walgreens is a competitor to CVS Health. And both companies are in a growing industry. Margins are slim, but it still results in healthy growing cash flows to pay bigger dividends. If Walgreens keeps raising and paying its dividend, it will become a dividend king by 2026.
Archer Daniels Midland (NYSE: ADM)
Archer Daniels Midland is a vertically integrated agriculture company. And although it’s vulnerable to commodity price changes, it’s survived many commodity cycles. Archer Daniels has paid uninterrupted dividends since 1931. The company has also raised its dividend consecutively for the last 41 years.
AT&T (NYSE: T)
AT&T is making recent headlines with 5G technologies. The company is improving its network to keep millions of customers around. AT&T also took on a lot of debt to acquire Time Warner in 2018. Many investors are concerned with the debt levels, but new revenues and cash flows should help the company chip away at it while still paying bigger dividends.
Wells Fargo (NYSE: WFC)
Wells Fargo was one of the safest banks during the housing collapse. Since, it has had some missteps but is overcoming them. Wells Fargo’s share price is well off its highs, and it has a high dividend yield of around 7%.
Many of these dividend stocks also show up on our top consumer staple stocks list. They’ve proven themselves to be reliable income investments.
Although, the best dividend stocks to buy will move with the market. And as prices adjust, better buying opportunities appear. To find the most up-to-date investing ideas, you can sign up for our free Wealthy Retirement e-letter below. It’s packed with wisdom from some of the top investing experts around. Also, feel free to share this research.