Over the last few years, dividends have made up 40% of the total S&P 500 returns. As a result, dividend stock investing is increasingly becoming popular. Many investors reinvest their dividends. This allows them to compound their returns and create an adequate income funnel. So, investors are left with the task of finding the right stocks.
This guide will discuss the best ones to buy in October 2023. These include the top stocks that have an edge over inflation. They also provide access to increased yields and capital gains. To help you decide, we have identified 12 of the best types you can buy for huge profits and long-term stability.
12 High Dividend Stocks: Best Offers
The list is exhaustive when checking the factors before choosing a high dividend stock. Savvy investors tend to choose quality over quantity and are mindful of the cash flow. So, here is a curated list of the top valuable dividends stocks to buy.
Each of the ones on this list guarantees a great number of yields and low volatility. They are established in different sectors and offer other figures, so ensure you take the time to choose your preferred option. You can check them out below:
| Dividends | Forward Dividend Yield | Payout Ratio | Price | Market Cap | 1-Year Total Return |
| Lumen Technologies, Inc | 1.00 (14.18%) | 50% | 7.05 | 7.3B | -37.2% |
| Altria Group Inc | 3.76 (8.39%) | 141.63% | 44.84 | 80.36B | 13.01% |
| Pioneer Natural Resources Co | 26.06 (10.30%) | 79.2% | 252.92 | 60.09B | 48.38% |
| ONEOK Inc | 3.74 (6.33%) | 105.9% | 59.06 | 26.4B | -6.53% |
| Kinder Morgan Inc-DE | 1.11 (6.20%) | 99.5% | 17.9 | 40.23B | 14% |
| LyondellBasell Industries NV | 4.76 (6.09%) | 33% | 78.20 | 25.46B | -6.5% |
| Dow Inc | 2.80 (5.97%) | 55% | 46.44 | 32.67B | -16.53% |
| Walgreens Boots Alliance Inc | 1.92 (5.36%) | 5.23% | 35.38 | 30.6B | -22.90% |
| International Paper Co | 1.85 (5.65%) | 34.9% | 32.87 | 11.63B | -30.93% |
| Prudential Financial Inc | 4.80 (4.56%) | 47.8% | 100.89 | 37.39B | -1.73% |
| Franklin Resources Inc | 1.16 (5.14%) | 40% | 22.46 | 11.2B | -32.77% |
| Seagate Technology PLC | 2.80 (5.66%) | 52.4% | 48.70 | 10.07B | -44.43% |
Lumen Technologies, Inc
Lumen Technologies Inc is a communications company with branches extending across many continents. This company is well invested in integrating services into businesses. It also extends services to customers across continents. As a communications agency, the services provided include BroadBand for small business groups. Others are digital subscriber line (DSL), consumer BroadBand, etc.
Lumen Technologies has a pretty good reputation in the stock market. It has more than 35,000 employees. Its extensive segments cover North America (NA), Europe, Africa, and the Middle East. Also, it has a market capitalization of 7.3 billion. This makes it a big brand in the communications world and an excellent prospect for any investor.
Forward Dividend Yield: 1.00 (14.18%)
Payout Ratio: 50%
Price: 7.05
Market Cap: 7.3B
1-Year Total Return: -37.2%.
Altria Group Inc
Altria Group is another perspective stock option for anyone. The company is a holding company that deals in tobacco products. It’s a manufacturer and distributor of tobacco and cigarettes in the United States. Some of its popular subsidiaries are Philip Morris USA, Inc and John Middletown. Both are major cigarette makers and sellers in the country.
Aside from its subsidiaries, Altria Group, also has some investment backups. For example, Helix Innovations LLC is a brand under its wings. It manufactures and sells oral nicotine pouches. This Equity type company has over 7,100 employees across the United States. Hence, investors seeking the highest income level should opt for Altria Group stocks.
Forward Dividend Yield: 3.76 (8.39%)
Payout Ratio: 141.63%
Price: 44.84
Market Cap: 80.36B
1-Year Total Return: 13.01%.
Pioneer Natural Resources Co
Pioneer Natural Resources is a company based in oil and gas exploration. The company has been at the center of attention in producing oil and natural gas liquids (NGLs). There are over 1,800 employees currently working at Pioneer Natural Resources Co. It has a good reputation in the stock market too.
This oil exploration company has a revenue figure of 24.79B and millions of trade volume. With its all-time elevated price of 380, its stock exchange process currently sits at 252.92. So, many analysts suggest buying this asset despite the global inflationary trends.
Forward Dividend Yield: 26.06 (10.30%)
Payout Ratio: 79.2%
Price: 252.92
Market Cap: 60.09B
1-Year Total Return: 48.38%
ONEOK Inc
ONEOK, Inc is a reputable oil and gas exploration company. This company owns many natural gas liquids (NGLs) systems across the United States. So its leading service is to connect NGLs across various areas. Many regions like the Permian, Mid-continent, and Rocky Mountain are under the jurisdiction.
Forward Dividend Yield: 3.74 (6.33%)
Payout Ratio: 105.9%
Price: 59.06
Market Cap: 26.4B
1-Year Total Return: -6.53%.
Kinder Morgan Inc-DE
Kinder Morgan Inc-DE is a large corporation dealing in energy transmission and optimization. It’s an energy infrastructure company that extends its services across segments. These include Natural Gas Pipelines Terminals, CO2 segments, and product Pipelines.
There are 83,000 miles of pipelines and 142 terminals owned by Kinder Morgan. They are all controlled and operated by the company across America.
It’s considered one of the top elevated dividends to invest in. This is because of its huge figures and relative stability over time. It’s one of the largest energy firms in America and has a 6% yield in 2022. It also bears a Mid-BBB investment grade credit rating, adding to its compelling package.
Forward Dividend Yield: 1.11 (6.20%)
Payout Ratio: 99.5%
Price: 17.9
Market Cap: 40.23B
1-Year Total Return: 14%.
LyondellBasell Industries NV
LyondellBasell Industries NV is a chemical company with a market in the United States. It conducts its operations through various segments. These segments are Olefins and Polyolefins-Americas (O&P-Americas), and Advanced Polymer Solutions (APS). Its principal service is the production of many products with plastics.
It also processes and sells polyolefin catalysts through licensed processes and technologies.
The company produces for many sectors. These include furnishings, ornamentals, food packaging, etc. It has over 19,200 employees, and it’s been around since 2007. Since it started, it has grown its services to extend across the US, India, Hong Kong, London, and Brazil.
Forward Dividend Yield: 4.76 (6.09%)
Payout Ratio: 33%
Price: 78.20
Market Cap: 25.46B
1-Year Total Return: -6.5%.
Dow Inc
Dow Inc is another chemical company on this list. It also majors in plastics, with six global businesses under its wings. Dow Inc has about 36,000 employees worldwide, with its largest market share in the United States. Three major product segments of Dow Inc contribute to its wealth. They are Packaging & Specialty, Performance Materials & Coating, and Industrial Intermediates & Infrastructures.
Forward Dividend Yield: 2.80 (5.97%)
Payout Ratio: 55%
Price: 46.44
Market Cap: 32.67B
1-Year Total Return: -16.53%.
Walgreens Boots Alliance Inc
Walgreen Boots Alliance Inc is one of the leaders in healthcare, pharmacy, and retail. It conducts all operations through three segments. These are the United States, International, and Walgreens Health. Some of its retail and business brands include Duane Reade in the U.S, Benavides in Mexico, and Ahumada in Chile.
Walgreens manages the manufacturing and distribution of many consumer products. Some of its popular products range from beauty to drugs and skincare products. It also has over 258,500 employees across its franchise. Walgreens Boot Alliance Inc has remarkable data and dividends profiles that can get you high returns.
Forward Dividend Yield: 1.92 (5.36%)
Payout Ratio: 5.23%
Price: 35.38
Market Cap: 30.6B
1-Year Total Return: -22.90%.
International Paper Co
The International Paper Company is a manufacturer of fiber packaging and pulp-based products. The corporation creates renewable packaging products from pulp and its extracts. It’s one of the biggest Industrial Packing manufacturers in the United States. It also produces Global Cellulose Fibers. The various products include containerboard, liner board, paper bags, etc.
There are 24 pulp and packaging mills under International Paper Co. Its production facilities supply areas like North Africa, Canada, and Europe. There are over 38,000 employees under the company’s wings and it plans to expand its base further.
Forward Dividend Yield: 1.85 (5.65%)
Payout Ratio: 34.9%
Price: 32.87
Market Cap: 11.63B
1-Year Total Return: -30.93%.
Prudential Financial Inc
Prudential Financial Inc is one of the highest dividend stocks in its industry. It’s a holding company that operates across the globe. Its services are based on financial products and solutions. These include life insurance, mutual funds, annuities, and investment portfolio management. It offers some of these services to individuals and institutions.
Its service coverage spans major cities in the United States, Europe, Latin America, and Asia. It conducts its operations through seven major segments. The most popular segment is PGIM. This sector manages real estate debts, public equity, dividends and public fixed income. Prudential Financial Inc has around 40,000 employees under its corporations.
Forward Dividend Yield: 4.80 (4.56%)
Payout Ratio: 47.8%
Price: 100.89
Market Cap: 37.39B
1-Year Total Return: -1.73%.
Franklin Resources Inc
Franklin Resources Inc is a high-yielding dividend asset because of its investment capabilities. It’s a holding company with many subsidiaries. It generates revenue from various investment products. Some of them are sub-advised products, sponsored funds, funds administration, shareholder servicing, etc.
It also offers expert solutions for products around fixed income and assets. The company solves cash management, equity, and various other finance-related issues. Another huge chunk of its revenue comes from sub-advisory services. And investment portfolios funded by third-party companies.
There are currently over 10,000 Franklin Resources workers around the world.
Forward Dividend Yield: 1.16 (5.14%)
Payout Ratio: 40%
Price: 22.46
Market Cap: 11.2B
1-Year Total Return: -32.77%.
Seagate Technology PLC
Seagate Technology PLC thrives in the ICT industry. It provides data storage technologies for different digital devices. It’s a large-volume manufacturer of hard disk drives (HDD), solid-state drives (SSD), and solid-state hybrid drives (SSHD).
This storage-as-a-service company provides large storage for institutions. For example, it manufactures hyper-scale data centers, public clouds, and others. These solutions are useful for high storage-demanding tasks. Currently, 40,000 employees manage manufacturing, processing, and sales at the company.
Forward Dividend Yield: 2.80 (5.66%)
Payout Ratio: 52.4%
Price: 48.70
Market Cap: 10.07B
1-Year Total Return: -44.43%.
What Are Dividend Stocks?
They are dividend payments the shareholders receive in place of cash payments. Rather than accept their shares in cash, shareholders can receive a fraction of the existing shares called dividends. So, it allows the company to reward its shareholders. But without reducing its cash balance.
This type of stock allows the company to balance many things. It boosts its value, rewards shareholders, and keeps the cash in check. For example, if it issues a high dividend stock of 7%. Then every shareholder must receive 0.07 shares for every share they own. So anyone with 100 shares gains 7 more shares, while owners of 1000 gain 70 extra shares.
How Dividend Stocks Work
They work similarly to cash stocks. It’s a viable option for companies that don’t have much cash to spare or would like to preserve cash but still reward their shareholders. So, its shareholders will receive shares (dividends) instead of cash payments.
The major advantage is that there is no tax bill on the dividends, so you only need to pay tax when you sell your shares. Most times, there’s a lock on the newly received shares to restrict shareholders from selling them for a certain period.
How to Invest in Dividend Stocks
Although there isn’t much difference to a layman, every investor knows dividend stocks have different types. So, depending on your choice, you’ll have to go through other processes to invest.
The two major types are Individual and Exchange-traded Funds (ETF). However, ETFs can be further divided into two based on risk and yields. Check out each of the high dividend stock investment options and how to invest in them below:
Individual Companies
Investing in stocks of individual companies allows investors to control their funds completely. This process requires more work and attention. Here, the investment is made in the asset of a single company. For example, when you choose to invest in Dow Inc, your investment portfolio will only bear Dow Inc. Likewise, your returns will be from the same company.
To invest in an individual company, you first need to find a dividend-paying stock. Research it and note figures such as its payout ratio, income, market cap, etc. Once sure, decide how many stocks you’d like to buy.
Pros
- Gives investors complete control.
- High rewards.
- Lower expenses.
Cons
- Big investment risk.
- Requires more work.
High-yield Mutual Funds and ETFs
These types of stock investments have viable options for investors. It allows them to get higher yields without the risks of individual portfolios. Rather than managing the portfolio, investors need to raise the funds. A professional manager takes charge of the portfolio and diversifies the investment.
You can find the stocks yourself to invest in this type. But instead, you can buy into a mutual fund or ETF. So, you’ll buy the shares of a fund controlled and managed by a professional fund manager who then decides which binds to add.
Pros
- Low investment risk.
- Professional management.
- Diversified investments.
- Higher returns than other ETFs.
Cons
- Extra expenses for management.
- Low yield than individual stockholders.
Dividend-Appreciation Funds and ETFs
This exchange-traded fund (ETF) investment allows investors to buy into a basket of a high dividend stock. Rather than those that pay in cash, investors can therefore find an asset with a dividends index. Like in Mutual Funds, a professional fund manager will manage the portfolio. So the returns from this investment pay dividends to the investors.
Investing here is like that of the Mutual Funds’ stock investments. Find a reliable broker to buy from or purchase by yourself using an online brokerage service.
Pros
- There is little risk involved.
- No tax on dividends.
- Managed by professionals.
Cons
- Relatively low yield.
- Charges management expenses.
How Are High Dividend Stocks Taxed?
A High dividend stock is taxed based on your qualification. There are qualified and nonqualified high dividend stock types, depending on when you bought your shares. You are a qualified stock owner if you owned the stock 60 days before the ex-dividend date. If it’s less than 60 days, then you are an unqualified owner.
For example, anyone that held an asset 60 days before the shareholders declared a record date is deemed qualified.
For unqualified stocks, you’ll be taxed based on your regular income tax rate. So it depends on your tax bracket. But your tax will be on long-term capital gains for a qualified stock. The figure is usually lower than your income tax rate. The only exception to these taxes is for stocks in a 401(K), Roth IRA, traditional IRA, or other tax-free accounts.
Dividend Stocks vs. Dividend Funds
Dividend stocks are dividends received on individual investments, usually in a single company. Dividend funds are investments made on many stocks managed by professionals. As a result, the risk on the former is higher than on the latter.
For context, a 10% drop in a portfolio with 10 stocks results in a 1% drop in the dividend stock portfolio. Meanwhile, this drop would only result in a 0.01% drop in dividend funds.
However, the risk compliments the rewards. So dividend stocks offer higher stock rewards than dividend funds. Another difference between them both is the individual decision made by the investor.
Dividend funds are ideal for small amounts. They are under the supervision of professional money managers. But, dividend stocks need the individual to keep track of changes. Generally, they need higher amounts to secure an investment.
Bottom Line
Of course, when you choose from our list of high dividend stocks you can rest assured of excellent businesses with stable charts and a proven record of dividend incomes. While the companies listed here are reliable with high-value stocks, they can experience some short-term volatility as well.
That’s because the stocks market depends on many ghostly factors. And most of these factors have nothing to do with the businesses themselves. Little changes in the global economy or changes in business policy might reflect price fluctuations from time to time. So, you don’t have to fret over daily price changes and instead focus on long-term profitability.
