5 Good Dividend Stocks to Buy Now
By: Ned Piplovic,
While some equities might look good as long-term investment opportunities, many investors seek good dividend stocks to buy now for immediate access to dividend income.
Even without complex analytical systems, most investors can easily identify multiple equities that have the capacity to generate solid total returns. Simple web-based tools — such as the Dividend Screener tool available at DividendInvestor.com — and just a few constraints will generally deliver a list of a dozen potential equities.
However, to finalize the selection of the equities that are best suited to meet the goals and strategies of individual investment portfolios, investors must consider additional metrics. Using these additional metrics to finalize the selection process will reduce the pool of potential candidates to just a few viable options.
While a generally positive indication, a high yield might be just a reflection of a share price decline. Even if the share price has fallen, investors must perform a more detailed analysis to ascertain whether that share price decline resulted from significant long-term flaws in the company’s fundamentals or whether the price decline is just a cyclical pullback.
Fundamental operational and financial issues should be a sufficient number of reasons to disregard a particular stock. Alternatively, a temporary pullback could provide investors with an opportunity to take a position in the stock in order to take advantage of a potential price recovery and related gains.
Listed below are 5 good dividend stocks to buy now:
5 Good Dividend Stocks to Buy Now: #5
Best Buy, Inc. (NYSE:BBY)
Dividend Yield: 1.9%
Best Buy’s current $0.55 dividend distribution is equivalent to a $2.20 annualized payout and yields 1.9%. This is a 10% hike from its previous dividend payout and is the company’s all-time highest dividend amount. Its dividend growth in both the short and the long-term is impressive, and even though 10% growth is significant, it is still below the company’s own five-year dividend growth average of 19% per year.
The strength of Best Buy’s dividend payout is not well-reflected in the company’s yield. 1.9% may seem small, but it is somewhat deflated by a quickly growing share price in the trailing 12-month period. Shares of Best Buy have grown 34.0% over the last 12 months. In the last three years, the unit price has increased 62.7%, and in the last five years, a bracing 387.9%.
5 Good Dividend Stocks to Buy Now: #4
Northern Trust Corporation (NASDAQ:NTRS)
Dividend Yield: 3.0%
Headquartered in Chicago, Illinois and founded in 1889, the Northern Trust Corporation operates as a financial holding company that provides wealth management, asset management and banking solutions. The company has paid dividends for more than 120 years. Just over the past two decades, the bank has boosted its annual payout 14 times. A five-fold advancement since 1999 corresponds to an average dividend growth rate of 8.6% per year.
The current $0.70 quarterly payout amount corresponds to a $2.80 annualized distribution and yields 3%. The company has grown its dividend for the last 9 consecutive years, particularly accelerating this growth in the recent three — Northern Trust’s three-year dividend growth rate average is 18.6%.
Shares of Northern Trust Corporation depreciated 3.3% this year, meaning when combined with dividend income, investors bore a loss of 0.3%. The company has grown considerably in the last half-decade, with growth of 73.3% in the trailing five-year period.
5 Good Dividend Stocks to Buy Now: #3
Hewlett Packard Enterprise Company (NYSE:HPE)
Dividend Yield: 3.8%
Since distributing its first dividend distribution at the beginning of 2016, Hewlett Packard has increased its annual dividend payout every year. After more than doubling its annual payout amount, the company’s average was increased by $0.01 each subsequent January. However, HPE changed the pattern in 2018 because a second dividend increase was announced for July. In addition to the fact that this was the first additional yearly increase for the company, this increase was also much more substantial as it took the quarterly payout from $0.075 to $0.115 per share, an increase of nearly 50%.
Hewlett Packard then increased its dividend again and currently pays a quarterly distribution of $0.12, converting to an annualized distribution of $0.48 and a forward dividend yield of 3.8%. With its continuous dividend growth in the last three-years especially, the company has increased its dividend by an average of 17% per year.
The company’s one-year returns are down, with a pullback in share price equivalent to 9.5%. The company is far more profitable in the long-term, rewarding its investors with a five-year return of 87%.
5 Good Dividend Stocks to Buy Now: #2
Valley National Bancorp (NASDAQ:VLY)
Dividend Yield: 4.2%
Since 2014, VLY has kept its quarterly dividend level at $0.11 per share, or $0.44 per share, annually. It maintains an impressive yet sustainable dividend rate of 4.7% by controlling its loan losses and keeping a successful operation in Florida. Its trailing 4.7% dividend yield is considerably higher than the 2.0% industry average, and its 55.7% payout ratio makes the company a powerhouse dividend payer.
In late 2020, VLY’s share price soared. In November, it zoomed 20.42% and in October it climbed 11.53%. This means VLY outperformed the S&P 500 by 11.62% and 14.30%, respectively. In addition, and in the midst of the COVID-19 pandemic, the company also posted its highest-ever quarterly earnings of $0.25 per share. Analysts expect it to keep this EPS in the fourth quarter.
While no longer as cheap as it was earlier in 2020, VLY is still 23% below its 52-week high and trending upward. The company has a successful cost-management strategy that has allowed it to grow net interest income by 27% in the last quarter and improve its efficiency ratio from 79% to 48%. These results demonstrate financial strength in a quarter that devastated most other regional banks, indicating VLY’s reliability and potential for long-term success.
5 Good Dividend Stocks to Buy Now: #1
Bed, Bath & Beyond, Inc. (NASDAQ:BBBY)
Dividend Yield: –
Headquartered in Union, New Jersey and founded in 1971, Bed, Bath & Beyond, Inc. sells a range of household merchandise, including linens, kitchen and bathroom articles, basic housewares, general home furnishings, consumables and various juvenile products. In addition to the Bed, Bath & Beyond brand, the company operates store under the several additional brands, including World Market, Cost Plus World Market, buybuy BABY Christmas Tree Shops and Chef Central.
The company was forced to temporarily suspend its dividend in the second quarter of 2020, responding to the financial confusion surrounding COVID-19. Before retracting its dividend, the company maintained a quarterly payout of $0.17 and increased its dividend every year since beginning dividend payments in 2016.
Due to its astronomical share price growth, however, it is reasonable to expect Bed, Bath & Beyond to reinstate its dividend. The stock soared 114.7% in the trailing one-year period, 88.2% of which has occurred YTD, or in January 2021 alone.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.