7 Top Dividend Stocks to Buy Now
By: Ned Piplovic,
Income investors are always looking for top dividend stocks and the first search criterion is generally the dividend yield.
A high dividend yield indicates substantial dividend income distributions relative to the equity’s share price. As such, high dividend yield is certainly a desirable metric. However, because of its inverse proportionality with the price, a high yield can be a direct result of a steep share price drop. Even if the dividend distributions are rising, the pace of a fast declining share price will generally outpace the dividend growth, hence, resulting in overall losses.
Therefore, investors must ensure that their top dividend stocks offer a balanced combination of rising dividend payouts and asset appreciation for positive total returns. In addition to dividend yields of 4.8% or more, every one of the top dividend stocks on the list below delivered a double-digit-percentage total return over the trailing 12 months.
7 Top Dividend Stocks to Buy Now: #7
Armada Hoffler Properties, Inc. (NYSE:AHH)
Armada Hoffler’s current quarterly yield is 5% higher than the $0.20 quarterly distribution from the same period last year. This new quarterly amount converts to an $0.84 annualized dividend payout and a yield of 4.8%. The rapid share price towards new all-time highs pushed the current yield 11% below the company’s own 5.4% five-year yield average.
However, while trailing its own average, Armada Hoffler Properties’ current yield outperformed the 2.96% simple average yield of the overall Financial sector by 62%. Furthermore, the REITs current yield is also nearly 18% higher than the 4.07% average yield of all the companies in the Diversified Industrial REITs industry segment.
The company has paid a rising annual dividend every year since choosing to organize as REIT in 2013. Over the past six years, Armada Hoffler has more than doubled its total annual dividend distribution from an annualized $0.40 payout in 2013 to the $0.84 distribution expected for full-year 2019.
7 Top Dividend Stocks to Buy Now: #6
ONEOK, Inc. (NYSE:OKE)
ONEOK hiked its annual dividend payout for 16 consecutive years. Since 2002, the total annual dividend advanced more than 11-fold, or at an average annual growth rate of 15.4%. The company’s current $0.89 quarterly dividend is 3% above the $0.865 payout from the previous period and 8% higher than the $0.825 payout from the same period last year. The new quarterly amount corresponds to a $3.56 annualized distribution and a 5% forward dividend yield.
The company’s current yield outperformed the 2% average yield of the overall Utilities sector by 150%. Additionally, the current yield is also nearly twice the 2.96% yield average of the Gas Utilities industry segment.
Asset appreciation contributed nearly half of the ONEOK’s 9.86% total return over the last 12 months. A 75% price drop in 2015 limited the five-year total return to just 26%. However, as the share price continues its recovery, the total return exceeded 61% for the three-year period.
7 Top Dividend Stocks to Buy Now: #5
Medical Properties Trust, Inc. (NYSE:MPW)
The REIT’s upcoming $0.26 quarterly dividend payout is 4% higher than the $0.25 dividend amount from the previous period. This upcoming payout amount corresponds to a $1.06 annual dividend and currently yields 5.7%. While 11% lower than the REIT’s own 6.42% average yield over the last five years, Medical Properties Trust’s current yield is nearly double the 2.96% average yield of the Financial sector and more than 5% above the 3.79% yield average of the Health Care Facilities REITs industry segment.
Since resuming annual dividend hikes in 2014, the trust has advanced its annual distribution 25%. This advancement corresponds to an average growth rate of 3.8% per year over the past six years.
The combined benefits of rising dividend income and asset appreciation delivered a 31% total return over the trailing 12 months, as well as a 66% total return over the last five years.
7 Top Dividend Stocks to Buy Now: #4
AT&T, Inc. (NYSE:T)
The company’s current $0.51 quarterly dividend is 2% higher than the $0.50 amount from the same period one year earlier. This new distribution is equivalent to a $2.04 annual dividend and a 5.83% yield, which is 7.2% higher than the company’s own 5.44% five-year yield average.
Additionally, AT&T’s current 5.83% yield is nearly 490% above the 0.99% simple average yield of the overall Technology sector, as well as more than 400% higher than the 1.13% yield average of the Domestic Telecom Services industry segment. Furthermore, the yield also outperformed by nearly 50% the 3.95% average yield of the segment’s only dividend-paying equities.
While boasting 34 consecutive annual hikes, AT&T has doubled its annual dividend payout just over the past two decades. This advancement corresponds to a 3.8% average annual growth rate.
7 Top Dividend Stocks to Buy Now: #3
Kimco Realty Corporation (NYSE:KIM)
The Kimco Realty Corporation — a retail Real Estate Investment Trust (REIT) — will distribute its next $0.28 quarterly dividend payout in mid-October 2019. This quarterly distribution corresponds to a $1.12 annualized payout and a 6.07% forward dividend yield. This current yield is nearly 21% higher than the equity’s own 5.03% yield average over the last five years.
Additionally, the current yield is more than twice the 2.96% yield average of the entire Financial sector, as well as 57% higher than the 3.86% average yield of the Retail REITs industry segment.
Since resuming dividend hikes in 2011, Kimco has enhanced its annual dividend 75%, which is equivalent to an average annual growth rate of 6.4%. The share price lost more than half of its value between mid-2016 and April 2018, which resulted in a combined total loss of more than 25% on shareholders’ investment over the last three years. However, the share price has been rising for the last 16 months and has combined with dividend income payouts for a 15% total return over the trailing 12-month period.
7 Top Dividend Stocks to Buy Now: #2
Omega Healthcare Investors, Inc. (NYSE:OHI)
Since resuming dividend distributions in late 2003, this Real Estate Investment Trust (REIT) advanced its annual dividend payout 340%, which corresponds to an average annual growth rate of 9.7%. Omega Healthcare’s current $0.66 quarterly payout converts to a $2.64 annualized dividend and yields 6.74%
This yield level is 127% higher than the 2.96% simple average yield of the overall Financial sector, as well as 80% above the 3.75% average yield of the entire Healthcare Facilities industry segment. Additionally, OHI’s current yield also outperformed the 5.5% average yield of the segment’s only dividend-paying companies by 23%.
While struggling a little over the past few years, the share price rose over the past year to deliver a combined total return of 27% over the trailing 12 months. Because of share price volatility, the total return over the last five years is only slightly higher at 35%.
7 Top Dividend Stocks to Buy Now: #1
Arbor Realty Trust, Inc. (NYSE:ABR)
The Real Estate Investment Trust (REIT) boosted its quarterly dividend distribution 3.6% from $0.28 in the previous quarter to $0.29 for the upcoming pay date. This new payout corresponds to a $1.16 annualized distribution and a 9.48% forward dividend yield. Additionally, the current dividend yield is also 9.3% above the company’s own 8.68% five-year yield average.
Arbor Realty’s current 9.48% yield is more than triple the 2.96% simple average yield of the entire Financial sector, as well as more than 130% higher than the 4.07% yield average of the company’s peers in the Diversified REITs industry segment. Furthermore, Arbor Realty’s current yield is also nearly 37% higher than the 6.93% average yield of the Diversified REITs industry segment’s only dividend-paying equities.
The Arbor Realty Trust suspended its dividend distributions in the aftermath of the 2008 financial crisis. However, after resuming dividend payouts in 2012, the equity has boosted its annual dividend amount every year. Over the last seven years, the annual dividend amount rose four-fold, which translates to an average growth rate of 22.2% per year.
Dividend increases and dividend decreases, new dividend announcements, dividend suspensions and other dividend changes occur daily. To make sure you don’t miss any important announcements, sign up for our E-mail Alerts. Let us do the hard work of gathering the data and sending the relevant information directly to your inbox.
In addition to E-mail Alerts, you will have access to our powerful dividend research tools. Take a quick video tour of the tools suite.
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.