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.
In addition to above-average current yields, the five good dividend stocks to buy now listed below offer additional characteristics which make these equities worthy of consideration right now. For instance, the dividend yields of all five stocks exceed 2.5% and all five ex-dividend dates are within the next 10 days. Therefore, interested investors should complete their own analysis and due diligence promptly before claiming ownership of these good dividend stocks before their upcoming ex-dividend dates.
Furthermore, the total return over the trailing 12-month period exceeds the individual stocks’ current yield. That is an indication that the share prices have risen over the past year to complement the dividend income payouts and produced balanced overall gains.
5 Good Dividend Stocks to Buy Now: #5
Best Buy, Inc. (NYSE:BBY)
Best Buy’s current $0.50 dividend distribution is equivalent to a $2.00 annualized payout and yields 2.6%. This current yield is 18% higher than the 2.17% simple average yield of the overall Services sector, as well as more than 170% above the 0.94% yield average of the Specialty Retail industry segment. Additionally, the current yield is nearly 9% higher than the 2.35% average yield of the segments only dividend-paying companies.
The company has boosted its annual dividend payout every year since beginning dividend distribuions 17 years ago. The 10-fold advancement since 2003 corresponds to an average dividend growth rate of 14.5% per year.
The 25% asset appreciation since early-December 2018 and the continued dividend income growth combined for total return of nearly 30% over the last year. The three-year total return was even higher at nearly 85%. However, Best Buy’s shareholders more than doubled their investment over the past five years with a total return of 135%.
5 Good Dividend Stocks to Buy Now: #4
Northern Trust Corporation (NASDAQ:NTRS)
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 2.7%. This current yield is more than 40% above the company’s own 1.88% yield average over the last five years. In addition to outperforming its own five-year average, the trust’s current yield is also 3% higher than the $2.58 simple yield average of the Midwest Regional Banks industry segment.
Asset appreciation complemented the dividend income growth for a combined total return of 10.5% over the trailing 12 months. Additionally, the total return over the past three years was 33% and nearly 71% over the past five years.
5 Good Dividend Stocks to Buy Now: #3
Hewlett Packard Enterprise Company (NYSE:HPE)
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%. The new $0.115 quarterly amount converts to a $0.45 annualized dividend payout and a 2.8% forward yield. Since January 2016, Hewlett Packard’s annual payout has more than doubled, and over that period, the annual dividend amount has advanced at an average growth rate of 43% per year.
Because of the traditionally low yields of the Technology sector, HPE’s current 2.8% yield is nearly 160% higher than the 1.08% simple average of the entire sector. Likewise, the Technical & System Software industry sub-segment has a similarly low average yield of 1.02%, which puts HPE’s 2.8% yield nearly 175% higher. Even if all the companies in the sub-segment with no dividend distributions are ignored, HPE’s current yield still outperforms the 1.8% average yield of only dividend-paying companies by more than 55%.
5 Good Dividend Stocks to Buy Now: #2
Valley National Bancorp (NASDAQ:VLY)
Based in New York, New York and founded in 1927, Valley National Bancorp operates as the holding company for the Valley National Bank. This bank provides commercial, retail, insurance, and wealth management financial services through approximately 200 branches in New Jersey, New York, Florida and Alabama. After delivering five cuts to its annual dividend payout amount in the five years from 2014 through 2019, the firm has since stabilized its dividend payout at $0.44.
The company’s current $0.11 quarterly payout is equivalent to a $0.44 annualized payout and a 4% forward dividend yield. This is nearly in line with the 4.14% simple average yield of the overall Financial sector. However, compared to the 2.37% average yield of its peers in the Northeast Regional Banks sector, Valley National’s current yield is 67% higher. Additionally, the current 4% yield is also more than 53% above the 2.58% yield average of the segment’s only dividend-paying companies.
Additionally, a 7.8% share price advancement and the dividend income have combined to reward shareholders with a 12% total return over the last year. Over the last five years, the total return was nearly 40%.
5 Good Dividend Stocks to Buy Now: #1
Bed, Bath & Beyond, Inc. (NASDAQ:BBBY)
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’s current $0.17 quarterly dividend payout corresponds to a $0.68 annualized distribution and yields 4.9%. Since beginning dividend distributions in 2016, the company has boosted its annual payout every year. A 36% boost from an annualized $0.50 distribution in 2016 to the current payout corresponds to an average growth rate of 8% per year.
An 80% share price drop since late 2014 delivered total losses of 77% and 63% over the last five and three years, respectively. However, the current share price is nearly 90% higher than its 10-year low from mid-August 2019. Furthermore, the 14% share price gain has helped produce a total return of nearly 20% over the trailing 12 months.
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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.