7 Best Dividend Paying Stocks to Buy Now
By: Ned Piplovic,
While some equities might appear as good long-term investment opportunities, most income investors are looking for the best dividend paying stocks to buy now for immediate access to dividend income distributions.
Even without complex analytical systems, most investors can easily identify multiple equities that have the capacity to generate solid total returns with potential. 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.
The viable equities for investment consideration should have a record of consecutive annual dividend hikes, above average yield and a relatively steady long-term asset appreciation, even if the share price exhibited recent price fluctuations. Below are the seven best dividend paying stocks to buy now.
7 Best Dividend Paying Stocks to Buy Now: #7
Allete, Inc. (NYSE:ALE)
Dividend Yield: 4.1%
Ex-Dividend Date: November 13, 2o20
Latest closing price: $62.63
Allete, Inc. — a diversified utility — has been paying dividends since 1945 and failed to hike its annual payout only once in the past two decades. The current $0.62 quarterly payout is nearly 5% higher than the $0.59 amount from the same period last year. This current distribution corresponds to a $2.48 annualized dividend and a 4.1% yield. Allete’s current yield is nearly 22% above the 3.2% simple average yield of its industry and nearly 60% of the 1.7% average yield of the S&P 500.
The company increased its annual payout over one third in the past ten years of consecutive annual boosts. This advancement corresponds to an average annual growth rate of 3.4%. The dividend growth and 38.3% capital gains over the past five years combined for a total return of over 60%. Over the past 12 months, the total return dropped and is now down 19.8%, creating an excellent buying opportunity for investors looking for a bargain.
7 Best Dividend Paying Stocks to Buy Now: #6
Paychex, Inc. (NASDAQ:PAYX)
Dividend Yield: 2.6%
Ex-Dividend Date: October 30, 2020
Latest Closing Price: $90.48
Paychex, Inc. has maintained its quarterly dividend of $0.62 for the last several quarters and currently pays an annual distribution of $2.48, 2.4% higher than last years payment of $2.42. This new annual distribution corresponds to a 2.6% yield and has experience a steady average growth rate of 7.2% per year over the last 10 years.
Over the past two decades, Paychex missed only one annual dividend hike and has boosted its annual payout over the past eight consecutive years. Over that period, the company doubled its payout for an 8% average annual growth rate.
Paychex, Inc. complemented its rising dividends with asset appreciation that combined for a 17.6% total return over the past 12 months and 59.5% over the past three years. Shareholders more than doubled their investment over the last five years with total returns of 118.6%
7 Best Dividend Paying Stocks to Buy Now: #5
Emerson Electric Company (NYSE:EMR)
Dividend Yield: 2.5%
Ex-Dividend Date: November 11, 2020
Latest Closing Price: $88.53
Emerson Electric Company’s dividend enhancement of $0.01 from a $0.49 payout one year ago to the current $0.50 quarterly distribution amount represents a hike of just 2%. While this hike is low by many standards, Emerson Electric has been increasing its annual dividend distribution for the past 63 consecutive years. Just over the past 20 years, the company tripled its annual distribution for an average growth rate of 5.5%.
The current quarterly payout is equivalent to a $2.00 annual distribution and a 2.5% forward yield, which is slightly below the company’s own 3.1% average yield over the past five years. When accounting for dividend yield, Emerson Electric has a total return of 10.3% over the trailing 12 months and 106.9% over the last 5 years.
7 Best Dividend Paying Stocks to Buy Now: #4
Target Corporation (NYSE:TGT)
Dividend Yield: 1.5%
Ex-Dividend Date: November 17, 2020
Latest Closing Price: $173.61
The Target Corporation advanced its quarterly dividend 3.1% from $0.66 in the same period last year to the current $0.68 distribution. The new quarterly payout amount is equivalent to a $2.68 annualized dividend distribution, which yields 1.5%.
Target has boosted its annual dividend for the past 48 consecutive years, and is on track to become a member of the Dividend Kings — a prestigious group of companies that has increased their dividend for 50 consecutive years or more. The company has increased its dividend a impressive amount, averaging 12.5% per year for the last 10 years, and bolster these returns for investors further still by asset appreciation and stock price growth. Despite the financial mayhem of COVID-19, Target’s stock price has grown 40.5% in the trailing 12 months, 42% after adjusting for dividend distributions. Medium and long-term investors have enjoyed a healthy return of 194.9% in the last 3 years alone.
7 Best Dividend Paying Stocks to Buy Now: #3
Consolidated Edison, Inc. (NYSE:ED)
Dividend Yield: 4.3%
Ex-Dividend Date: November 17, 2020
Latest Closing Price: $67.43
Consolidated Edison’s (ConEd) current quarterly dividend amount of $0.76 represents a 2.7% hike above the $0.74 payout from same quarter 2019. The annualized dividend distribution of $3.04 is equivalent to a 4.3% forward dividend yield.
ConEd has increased its dividend every year for the last 45 years, making it a member of the Dividend Aristocrats. Its recent dividend growth rate has accelerated, now growing an average of 3.5% per year over the last 3 years, but 2.5% per year over the last 10. Although the company is down this year, its stock price having dropped 17.8% in the trailing 12 months, its strong fundamental basis has allowed it to keep paying a consistent dividend. Investors might consider this share price decrease a temporary pullback and use it as an opportunity to purchase a consistent Dividend aristocrat at a bargain.
7 Best Dividend Paying Stocks to Buy Now: #2
Duke Energy Corporation (NYSE:DUK)
Dividend Yield: 4.3%
Ex-Dividend Date: November 12, 2020
Latest Closing Price: $87.27
The Duke Energy Corporation’s current $0.96 quarterly dividend distribution is 1.6% higher than the company’s $0.94 payout from the same period last year. This new quarterly payout amount corresponds to a $3.80 annual distribution and yields 4.3%.
The company has been paying dividends since 1926 and has rewarded its shareholders with an annual dividend boost every year over the past 15 years. Over that period, the Duke Energy corporation has nearly doubled its dividend distribution amount, which is equivalent to an average annual growth rate of nearly 5% per year.
Duke Energy complemented its steadily rising dividend income distributions with reliable asset appreciation. Over the past 12 months, the company delivered a total return of 3.9%. Over the last three and five years, total returns were 22.1% and 54.8%, respectively.
7 Best Dividend Paying Stocks to Buy Now: #1
Summit Hotel Properties, Inc. . (NYSE:INN)
Dividend Yield: 2.0%
Ex-Dividend Date: February 13, 2020
Summit Hotel Properties, Inc is normally a consistent dividend payer, but it has since temporarily suspended its dividend since February 2020. When the company is actively paying dividends, it has averaged a 9.4% dividend growth rate per year averaged over the last 5 years.
The company has had an unusually weak year in 2020, having lost 24% in its stock price in the trailing 12 months. Analysts, however, are optimistic about its future and believe this may be an excellent buying opportunity — despite its negative returns and cease of dividend payment, Summit Hotel Properties has a “Strong Buy” consensus form analysts. The end of this year may mark a unique opportunity to purchase this recently overlooked stock with a strong financial basis.
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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.