10 Best Dividend Stocks Of June 2023 (2024)

*All analysis and data are sourced from Trades That Swing, current as of June 1, 2023.

Our curated list of best dividend stocks is based on nine key measures. To be included in the list, each stock must have demonstrated:

• Long-term dividend increases. The company must have increased its dividend for at least 10 years in a row.
• Decent annual dividend growth. The annual dividend amount has increased by at least 5% on average over the last five years.
• Sustained earnings growth. EPS has increased more than 10% per year, on average, over the last five years.
• No unprofitable years. Earnings must have remained positive for at least the last six years.
• Elevated current dividend yield. The current dividend yield must be at least 1%.
• Decent overall shareholder yield. Shareholder yield must be at least 1%. Shareholder yield includes dividends and share buybacks or issuances.
• Expected to grow. Analysts expect EPS to grow by at least 5% per year over the next five years.
• Outperforms the S&P 500. The stocks must have outperformed the by at least 1% per year, on average, over the last 10 years.
• Maximum drawdown. The maximum decline a stock price can have over the last 10 years is 45%, and this helps exclude volatile stocks. More than half of stocks of the US have had at least one 50% drop or greater over that time frame.
• Minimum stock data requirements. The stocks are listed on US exchanges, have a price of at least $5, and average over half a million shares per day.

As of this writing, only 28 U.S. stocks met all the criteria. The top 10 in terms of dividend yield were selected for this listing.

Dividends are nice, but they aren’t the only factor to consider when buying a stock. Ideally, a dividend stock is financially strong and growing—continued stability and growth signals that the company’s dividend is sustainable over the long term and likely to be increased regularly.

To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Rates Investing Products.

An experienced financial analyst selected the stocks above, but they may not be right for your portfolio. Before you purchase any of these stocks, do plenty of research to ensure they align with your financial goals and risk tolerance.

Dividend stocks make regular distributions of cash and shares of stock to their shareholders. Income investors who want cash flow buy dividend stocks, although the best dividend stocks deliver good long-term appreciation in addition to income.

Here are the key concepts you need to understand when evaluating the best dividend stocks:

1. Dividend payout ratio. This is a percentage figure which represents a stock’s annual dividend amount divided by its annual EPS. The payout ratio rises and falls as a company’s earnings and dividend rates change. A reasonably low payout ratio of 60% or less indicates that a company’s dividend is sustainable.
2. Dividend yield. This is another percentage figure representing a stock’s annual dividend amount divided by its current price per share. Dividend yield gives investors an idea of how much a stock pays in annual dividends relative to its price.
3. Sustained dividend increases. While the dividend payout ratio and dividend yield can inform your understanding of a stock’s current dividend, it’s also key to find stocks that have regularly increased their dividends over time.
4. Steady growth in EPS and revenue. Dividends are only as healthy as a company’s underlying business. Look for dividend stocks that have delivered stable and growing earnings and revenue.
5. Durable competitive advantages. There’s no question that companies that have maintained the best dividends for the longest periods have also secured durable competitive advantages. Whether this stems from technology, barriers to entry, high customer switching costs, or a powerful brand, the best dividend stocks have it.

Dividend stocks regularly pay their shareholders a portion of profits they choose not to reinvest in the business. Each share of stock you own entitles you to a set dividend, typically paid quarterly or annually.

The company’s board of directors sets the dividend amount and makes decisions about raising (or lowering) dividends over time. The company sets the ex-dividend date, which fixes the date by which investors must own the stock in order to get a dividend payment, and the record date when the dividend is paid.

Many investors choose to own dividend stocks to generate income from their equity investments. They get price appreciation over time, but they also get regular dividend payouts that provide cash flow without the need to sell off shares of stock.

There are various ways to compare the dividends offered by different companies. Dividends per share, for instance, tell you the amount of each dividend payment that investors receive for each share of stock they own.

When a company raises its dividend, that means the dividend per share increases. Keeping tabs on how many consecutive years a company has managed to raise its dividend per share is one way to gauge the reliability of a dividend stock.

Dividend yield offers another way to evaluate dividend stocks. A dividend yield is the percentage of a company’s price per share that it pays in dividends each year, providing a handy ratio for directly comparing different dividend per share amounts separate companies.

For example, a stock paying a $0.50 annual dividend that is currently priced at $50 per share has a dividend yield of 1%—the same as a stock priced at $200 that pays a $2 annual dividend.

Then there’s the dividend payout ratio, which is a percentage representing a company’s annual dividend divided by its annual earnings per share. The payout ratio rises and falls as a company’s EPS and dividend rates change. A ratio of 60% or less indicates that a company’s dividend is sustainable.

• Buy The Dip: Best Cheap Stocks To Buy Now
• The Best Growth ETFs
• Why Is Inflation So High?
• What Are I Bonds?
• Acorns Review
• Robinhood Review