What are the best dividend stocks to buy and hold

September 15, 2023

Dividend stocks are an attractive option for buy-and-hold investors seeking a steady stream of income and growth potential. However, it is crucial to carefully weigh the risks and rewards before investing in any stock.

Why dividend stocks are a worthy investment

Dividend stocks are a type of stock that pays a portion of its profits to shareholders regularly, typically quarterly. Dividends are a valuable source of income for investors and provide a hedge against inflation.

Here are some key reasons why dividend stocks are noteworthy:

  1. Regular Income. Dividend stocks provide a consistent stream of income to investors. It is particularly appealing for investors seeking a steady cash flow, such as retirees or those looking to supplement their income.
  2. Portfolio Stability. Dividend-paying stocks tend to be less volatile than non-dividend-paying stocks, which can help reduce the overall risk in your portfolio.
  3. Inflation Hedge. Dividend payments often increase over time, which acts as a hedge against inflation. As the cost of living rises, companies boost their dividend payments to keep pace with inflation, preserving your purchasing power and delivering income growth. 
  4. Long-Term Wealth Building. Reinvesting dividends accelerates the growth of your investment holdings over time through the power of compounding. You can benefit from both share price appreciation and increased dividend payments by purchasing additional shares with your dividend income. 
  5. Investor Confidence. Companies that consistently pay dividends signal confidence in their financial health and outlook. They are often seen as accountable to their shareholders and are more likely to make prudent financial decisions.
  6. Income During Market Volatility. Dividend stocks provide a reliable income source even when stock markets are turbulent. The benefits received help traders stay invested during market downturns, avoiding the need to sell assets at unfavorable prices.

Stocks with the best dividend yields

As of September 2023, these are some of the stocks with the best dividend yields on the stock market, according to NerdWallet.

Tredegar Corporation (TG)

The company is well-known for manufacturing a range of engineered materials, films, and powders. With an impressive dividend yield of 10.34%, Tredegar has consistently demonstrated its commitment to rewarding shareholders. It also has a remarkable track record of consistent dividend payments, having consecutively raised dividends for 19 years.

Franklin BSP Realty Trust, Inc. (FBRT)

It operates as a real estate investment trust (REIT) specializing in commercial properties. With an attractive dividend yield of 10.04%, the company has established a consistent track record of dividend distributions. Franklin BSP Realty Trust represents a compelling choice for investors seeking a dividend stock with a high Yield Curve.

Devon Energy Corporation (DVN)

Devon Energy Corporation operates as a prominent player in the oil and gas exploration, and production industry. Impressively, the company offers a dividend yield of 9.79%, reflecting its commitment to rewarding shareholders.

Ready Capital Corporation (RC)

It is a reputable real estate finance company offering financing solutions to small businesses and commercial real estate owners. Impressively, the company boasts a dividend yield of 9.52%, demonstrating its commitment to providing value to shareholders. 

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