9 Best Dividend Stocks to Buy and Hold • Benzinga

Want to make stable cash flow without selling your stocks? Dividend investing is a popular path for investors who want cash distributions that grow over time. Investors can reinvest these proceeds into additional shares, and companies tend to raise their dividends each year. Dividend investing creates the possibility of consistently growing cash flow that allows investors to hold onto their shares instead of selling them to cover living expenses in retirement. But some dividend stocks are better than others. This guide will showcase some of the top dividend stocks to consider.

Looking for some good dividend stock ideas? These are some of the best dividend stocks to buy and hold. 

Iron Mountain stores paperwork for 95% of the Fortune 1,000 companies and works with various governments. The company keeps important documents secure for its clients. While the company got started with securing physical documents, it also offers cybersecurity services. Iron Mountain shares are up by 78% over the past five years and have a 4.2% dividend yield.

Cisco shares haven’t been too exciting for recent shareholders, but this year is shaping up to be an impressive one. Shares are up by 12% year to date and have a dividend yield approaching 3%. Cisco reported double-digit revenue growth in the recent quarter and gave investors good guidance. Cisco gives investors exposure to cybersecurity, cloud and software. With a price-to-earnings (P/E) ratio of just under 20, Cisco stock has been overlooked for years. Recent growth and the company’s opportunities may support a higher valuation.

Bank of America is the second-largest bank based on assets under management. Many consumers and business owners flocked to financial institutions like Bank of America when some regional banks defaulted. Shares have been flat over the past five years, but investors receive a 3% dividend yield. Bank of America reported 18.6% year-over-year net income growth in the second quarter, which can make the P/E ratio more attractive. The firm’s P/E ratio currently sits at 9. 

Broadcom combines high dividend growth with rapid share price appreciation. The semiconductor giant is up by over 50% year to date and has almost quadrupled over the past five years. Despite that growth, Broadcom still maintains a dividend yield above 2%. In 2022, Broadcom raised its quarterly dividend per share from $4.10 to $4.60, marking a 12.2% year-over-year increase. 

Deere & Co. manufactures farming, lawn care and other types of equipment. Although shares are roughly flat year to date, they have more than tripled over the past five years. Deere & Co. has a dividend yield of a little above 1%, but it has raised the dividend multiple times in some years. The quarterly dividend per share has jumped from 76 cents in 2020 to $1.25 in 2023. That’s a 64.5% increase over the past four years. Shares remain reasonably priced with a 15 P/E ratio.

Elevance Health is an American health insurance provider that makes steady payouts from health insurance policies. Shares are up by almost 80% over the past five years and come with a dividend yield above 1.25%. This year, the company raised its quarterly dividend per share from $1.28 to $1.48, marking a 15.6% year-over-year increase. Elevance Health’s double-digit year-over-year revenue and earnings growth can help power the stock higher and result in a high dividend growth rate.

American Tower is a real estate investment trust that owns over 225,000 cell towers. That portfolio helps the company generate high cash flow for investors with some appreciation. Shares are up by 26% over the past five years. The stock has a 3.3% dividend yield and a double-digit profit margin to support the payouts. 

Sysco is a top food distributor that is more resilient to recessions than other stocks. Shares are only up by 6% over the past five years, but the stock has a dividend yield close to 3%. Sysco isn’t a growth stock by any means, but the company can produce reliable cash flow for investors without the same vulnerabilities as a high-tech company. Shares trade at a 21 P/E ratio and a 17 forward P/E ratio. Sysco also trades at a 0.5 price-to-sales ratio.

Automatic Data Processing shares have gained roughly 80% over the past five years. The company provides human resources management software. The software has helped the company maintain double-digit profit margins. Shares currently have a 20 P/E ratio and a 2% dividend yield. 

Dividend stocks pay a portion of their retained earnings to investors. Higher dividend yields attract more investors because their capital generates more cash flow. Investors should also consider a dividend’s sustainability and long-term appreciation. Overlooking these two factors can result in long-term losses and seeing your cash flow get cut because a company could not maintain the dividend. Dividend stocks can help investors earn passive income that can help with retirement and everyday expenses.

Buying and holding dividend stocks presents many advantages for investors. The shares can appreciate in the long run, and you receive cash flow while you wait. Dividend-paying companies tend to increase their dividends every year, allowing you to reap more cash flow in the process. If you do not need the proceeds right away, you can reinvest the dividend into additional shares, ensuring your next dividend payment is higher than the previous one. 

Investors can choose from many dividend stocks, but they can also choose from many brokers. These are some of the top places to invest in dividend stocks. 

A dividend portfolio can help you generate cash flow and navigate life after work. Dividend stocks can appreciate and raise their dividend payouts over time. Analyzing stocks and conducting your research can increase the likelihood of you selecting reliable dividend-paying stocks.

This methodology involved looking for companies that have respectable dividend yields and appreciation potential. This list avoids high-growth, low-yielding dividend stocks. It also avoids high-yielding stocks that have seen their values decrease and have declining business models.