April 24, 2023

The 10 Best Dividend Stocks

 

These undervalued stocks with reliable dividends are worth considering today.

 




What should investors be looking for when it comes choosing the best dividend stocks?


At Morningstar, we think that the best dividend stocks aren’t simply the highest dividend stocks. Instead, we suggest investors look beyond a stock’s yield and instead choose stocks with durable dividends—and buy those stocks when they’re undervalued.


“It’s really critical to be selective when it comes to buying dividend-paying stocks and chasing yield,” explains Dan Lefkovitz, a strategist for Morningstar Indexes. “Looking for the most yield-rich areas of the market can often lead you into troubled areas and dividend traps—companies that have a nice-looking yield that is ultimately unsustainable. You have to really screen for dividend durability, reliability going forward.”


David Harrell, editor of Morningstar DividendInvestor, suggests focusing on companies with management teams that are supportive of their dividend strategies and favoring companies with competitive advantages, or economic moats.


“A moat rating does not guarantee dividends, of course, but we have seen some very strong correlations between economic moats and dividend durability,” says Harrell.



Given ongoing economic uncertainty and stock market volatility, investors looking for the best dividend stocks today might consider adding undervalued, quality dividend stocks to their portfolios. After all, quality companies have the financial stability to maintain their dividends during questionable economic periods, and price risk is reduced when investors can buy the stocks of these companies for less than what they’re worth.


Continue reading …


No comments:

Post a Comment