• Tara Murphy

7 Great Dividend Stocks To Invest In

This week on the blog...


Dividend investing is a vital part of your investment strategy, especially holding longterm, so you can start to actual earn dividend income on the regular. Another GREAT source of passive income! I talk a lot about this in my TMM Program, as you students know, but here is a quick short list of 7 great dividend stocks to buy this year.

  1. Lowe's (NYSE:LOW): The home improvement giant may not seem like a very exciting stock. And that's true, unless you like dividend growth. The company has raised its dividend an incredible 46 straight years, and, over the past decade alone, has raised the payout a massive 471%. Another important number that's good for Lowe’s: The average U.S. home is 37 years old. The next generation of DIYers will spend a lot of money at Lowe's.

  2. Walgreens Boots Alliance (NYSE:WBA): One of the largest retail pharmacy operators in the world, Walgreens is undergoing a massive turnaround. Its plans will lower costs, increase digital sales, and maybe most importantly, add full-service healthcare clinics in hundreds of its retail locations in the very near term. Becoming a more integrated healthcare company should help make this profitable company even more profitable, fueling its already-generous dividend to even higher levels. With a dividend yield well above 3% at this writing and 45 years of annual payout growth, there's a lot dividend investors can like about Walgreens stock.

  3. Realty Income (NYSE:O): If you're looking for a simple way to invest in high-quality real estate for income and growth, this might be the perfect stock. The company owns a wide array of largely e-commerce-resistant properties, earning strong cash flows from tenants on long-term leases. Realty Income is one of the newest members of the Dividend Aristocrats, having joined the index in January 2020 after reaching 25 consecutive years of dividend increases (along with 50 straight years of paying investors every month).

  4. Johnson & Johnson (NYSE:JNJ): Johnson & Johnson owns a portfolio of excellent brands that make products people need -- specifically healthcare items. In addition to its Band-Aid, Neutrogena, Tylenol, Zyrtec, Benadryl, and Johnson's brands (among others), Johnson & Johnson has massive and steadily profitable operations in pharmaceuticals and medical devices, the combination of which has allowed the company to increase its dividend for 58 years in a row. This diversity across consumer health brands, pharmaceuticals, and medical devices is unmatched and has proven to be a massive profit engine.

  5. Target (NYSE:TGT): In the cutthroat discount retailing world, Target has consistently proven it doesn't have to compete on price to win. For years, it has proven more profitable than its peers, with some of the highest gross and operating margins in retailing. At the same time, its focus on increasing its ecommerce business and expanding in-store offerings has kept sales -- and profits -- growing at a nice clip. With dividend growth at 49 years and counting, dividend investors should put Target on their shopping list.

  6. Microsoft (NASDAQ:MSFT): As one of the largest companies in the world, Microsoft has steadily increased its sales, and its focus on recurring, or subscription-based, revenue sources is an especially attractive feature for dividend investors. The company has a solid balance sheet with more cash than debt and a very low payout ratio that leaves tons of room to increase the dividend. Given its 19-year streak of dividend increases, we wouldn't be surprised if Microsoft joins the Dividend Aristocrats club soon.

  7. American Express (NYSE:AXP): Financial services such as consumer and business lending are another place to find a handful of top dividend stocks, and American Express is one of the best. While not a Dividend Aristocrat, AmEx has a decades-long track record of either raising or maintaining its dividend through every economic environment. That's a credit to its high-quality lending standards and its focus on higher-income consumers who are less likely to default on their debts during weak economic periods. This makes it both a safe investment for long-term investors and a reliable source of dividends.

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