The 10 Best Dividend Stocks of All Time
There are many reasons to be upbeat about stocks right now. For one, the market is rebounding as some major companies report stronger-than-expected third-quarter results. The Federal Reserve may also be ready to pause interest rate hikes sooner than later. Still, the economy is not growing very much, if at all. Inflation remains a problem as well. Accordingly, many investors — particularly more conservative ones — may be looking for the best, most stable dividend stocks to buy.
For those investors, these seven names with high dividend yields could be the right fit. They can provide significant amounts of income that will help investors cope with inflation. They’ll also help keep portfolios resilient if the market goes south in the coming months. And if the market rallies in the medium term? Although none of them are necessarily millionaire makers, these dividend stocks to buy can provide investors with meaningful capital appreciation as well.
So, without further ado, let’s dive into this list of the best dividend stocks to buy in November.
First up on this list of dividend stocks to buy, insurer Prudential (NYSE:PRU) should be relatively resistant to both climate change and economic weakness, as it specializes in life insurance and annuities. Most consumers are not going to cut back on either of these categories if the economy turns south. That’s because life insurance is a necessary precaution for many families. Meanwhile, annuities provide stable income at a time when many see the stock market as volatile and high inflation makes keeping money in savings a losing proposition.
PRU stock has an alluring 4.75% dividend yield. In the first half of 2022, the company’s net cash also climbed by an impressive total of nearly $1.5 billion. As of the end of Q2, Prudential had a very good-looking balance sheet, with $27.46 billion of cash and total debt of only $34.15 billion.
On top that, Prudential should benefit meaningfully from rising interest rates, as it invests the money it gets from life insurance premiums and annuities in fixed-income instruments. PRU stock has a forward price-to-earnings (P/E) ratio of just 8.2 times and has been relatively resilient this year. Shares are down only 2% year-to-date (YTD).
Invesco Preferred ETF (PGX)
The Invesco Preferred ETF‘s (NYSE:PGX) nine largest holdings are the preferred stocks of large banks. Historically, preferred stocks are not nearly as volatile as common stocks, although this fund has fallen about 25% YTD — slightly worse than the S&P 500’s decline.
Still, this ETF does have a hefty 5.8% dividend yield. And, if the economy does not go off a cliff, large banks should do fairly well. Specifically, their net interest income (NII) will jump but their chargeoffs should not climb nearly enough to offset those NII gains.
Investors saw this phenomenon occur last quarter, when JPMorgan’s (NYSE:JPM) revenue climbed 10.4% year-over-year (YOY). In addition, PNC (NYSE:PNC) saw its top line advance 7% YOY and Wells Fargo (NYSE:WFC) saw sales rise nearly 4%.
Finally, as a Forbes columnist explained in February, preferred stocks offer “the stable and consistent income payments of bonds with the equity ownership advantages of common stock.” That includes the “potential for the shares to rise in value over time.”
BNY Mellon (BK)
BNY Mellon (NYSE:BK) has been implicitly endorsed by “The Oracle of Omaha” himself. Specifically, legendary investor Warren Buffett’s Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) reportedly owns more than $3 billion worth of BK stock.
On top of this, the bank’s Q3 earnings per share came in at $1.21, well above analysts’ average outlook of $1.10 per share. BNY Mellon’s revenue also increased nearly 6% year-over-year (YOY) to $4.28 billion, benefiting from a 44% surge in net interest income.
In the wake of these results, Citi increased its price target on BK stock to $50 from $46. The firm is upbeat on the bank’s “strong capital returns, limited credit risk profile, improving net interest income outlook into 2023 and expense control under [its] new management team.” The firm kept a “buy” rating on shares.
BNY Mellon has a dividend yield of 3.55%, the lowest on this list. But the endorsements of Buffett and Citi, along with the stock’s low forward P/E ratio of 8.58 times, earns BK a place on this list of dividend stocks to buy.
The Southern Company (SO)
The Southern Company (NYSE:SO), like most electric utilities, is a monopoly with very low risk of bankruptcy and very stable cash flows. But the top and bottom lines of utilities are also poised to surge, driven by the electrification of transportation and utilities’ ability to enter new, more profitable businesses like renewable energy, electric vehicle (EV) charging and energy storage.
This company’s subsidiary, Southern Power, “currently owns or operates more than 2,395 megawatts of solar generating capacity at 28 facilities operating in California, Georgia, Nevada, New Mexico, North Carolina and Texas.” Southern Power is also currently operating or developing 15 wind-energy projects and two fuel-cell projects in the States.
Also making the case of SO stock, utilities stocks in general should perform better in the near-to-medium term as the Fed becomes more dovish. That’s because shares of the sector tend to move in the opposite direction of interest rates.
SO stock has a dividend yield of 4.14%.
Icahn Enterprises (IEP)
I must confess that, until a few weeks ago, I had never heard of Icahn Enterprises (NASDAQ:IEP). But after learning about it from other pieces on InvestorPlace, I’m impressed with the company because, as other writers noted, IEP has a huge dividend yield of nearly 15%. It also owns multiple, highly resilient businesses. On top of this, the investing company sports impressive cash flow from operations.
Importantly, Carl Icahn himself owns 85% of outstanding shares worth over $15 billion, according to Yahoo! Finance. That’s a tremendous vote of confidence in IEP stock and its outlook from the famed billionaire investor.
Finally, according to Seeking Alpha, Icahn Enterprises “has reduced its overall debt load from $12.6 billion in 2016 to just over $7 billion” as of the end of Q2. This indicates that the company is doing well from a financial perspective.
I’ve been bullish on IBM (NYSE:IBM) for a long time. With the company’s dividend now yielding a robust 4.89% — and the firm having recently reported strong third-quarter results — I remain very upbeat on the name. That’s particularly true for more conservative investors who are seeking exposure to the tech sector.
For Q3, IBM’s top line climbed 6.4% YOY to $14.1 billion, coming in $550 million above analysts’ average estimate. Moreover, the company reported strong EPS of $1.81. Software sales jumped an impressive 14% YOY as well, excluding the impact of currency fluctuations. Also noteworthy is the fact that hybrid cloud sales soared 20% YOY, excluding currency fluctuations. IBM CEO Arvind Krishna said the following on the company’s earnings call:
“Our platform centric strategy continues to have good momentum adding a couple of hundred hybrid cloud platform clients in the third quarter. We see more and more clients consuming across our portfolio of software, consulting and infrastructure capabilities.”
Writing that the Q3 results showed “broad based strength,” Bank of America recently kept a $145 price target and “buy” rating on IBM stock.
Brookfield Renewable Partners (BEP)
At its Investor Day on Sept. 29, Brookfield Renewable Partners (NYSE:BEP) reported owning and/or developing 25,300 megawatts (MW) of wind energy and 55,000 MW of solar energy globally. BEP also noted that its funds from operation per unit had jumped from 65 cents in 2011 to $1.45 in 2021.
Some of the strong, positive catalysts for BEP stock include governments’ incentives for investing in renewables, rapidly increasing electricity demand and higher electricity prices. Moreover, Brookfield has even reported that rising electricity prices have enabled it to offset increasing commodity costs. Meanwhile, “rising inflation” has actually raised its profit margins at more than 70% of its projects.
Over 90% of Brookfield’s revenue is generated by 14-year contracts, making the outlook for its business highly certain and stable as well. BEP stock has a dividend yield of 4.41%
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines