There are numerous strong candidates available right now, but there are specific names that stand out to me.
Is your portfolio in need of fresh income investments? Perhaps you’re seeking more stability and defensive options, especially since many high-risk growth stocks are currently overvalued and overbought. No matter your objective, here’s a summary of my top five favorite dividend stocks to consider purchasing at this time.
1. PepsiCo
Coca-Cola remains a premier dividend choice in the consumer goods sector, and this is clear why. As the largest beverage company by market capitalization, its brands are well-established. However, if you’re considering a dividend-paying consumer staples option today, I’d recommend choosing PepsiCo (PEP +0.14%), offering a forward dividend yield of 3.5%, compared to Coke’s 2.6%. Although PepsiCo’s yield is higher due to underperformance associated with its food and snack division, initiatives like dye-free chips and higher-protein products are starting to yield positive financial results, even if they aren’t yet fully reflected in the stock price.
2. Pfizer
Many are aware that pharmaceutical company Pfizer (PFE 0.73%) has struggled to replicate its COVID-related revenue peak of over $100 billion in 2022. Its heavy focus on pandemic response left its pipeline somewhat depleted, affecting stock performance. However, Pfizer is actively working to revitalize its portfolio through acquisitions and ongoing research and development, anticipating the launch of eight new blockbuster drugs by 2030, which are expected to drive significant future revenue growth.
3. Realty Income
Realty Income (O +0.92%) isn’t just a typical stock; it’s a real estate investment trust (REIT). By owning revenue-producing properties like office buildings and retail spaces, it can distribute most rental income to shareholders without incurring corporate taxes. Realty Income has maintained a consistent monthly dividend since 1969 and has increased payouts for over 31 years, currently offering new investors a yield close to 5%.
4. Verizon
Investing in Verizon Communications (VZ +1.25%) may not yield substantial capital growth, but it compensates with strong income potential. The stock’s forward dividend yield stands at 5.8%, with 19 consecutive years of increased quarterly payments. With almost 98% of American adults owning mobile phones, this dependency ensures continued revenue flow.
5. IBM
Finally, I’m including International Business Machines (IBM +0.44%) on my list of favored dividend stocks. This tech company offers a respectable dividend yield of 2.6% and has consistently raised its payouts for 30 years. With a significant portion of its revenue coming from high-margin software and consulting services, much of which is recurring, IBM has a strong cash flow to maintain its dividend payouts.
