If you are looking for the best dividend stocks to buy today, then there are many different options out there. But beware, just because it pays a high dividend doesn’t make it a good stock to invest in. Lucky for you, I am going to show you some top notch picks that pay out fantastic rates as well as giving you a great chance of some additional stock price appreciation to add to the income stream. After you get through the list below, there are a few more recommendations that could boost your portfolios gains even more here. But no sense of dreaming of all those high paying dividends, let’s start picking them out.
My goal with this list is to give you a decent selection of dividend stocks that you can go to bed feeling safe with. My personal preference is to stick to companies that have consistent positive earnings that are also paying dividends above market average. The S&P 500 is currently paying about 1.98% in dividends, while the Basic Materials sector is paying a very nice 4.96%. Inside of that Basic Materials sector, you have Oil and Gas leading the way with a crazy high 9.6% dividend and Metals and Minerals following close behind with a 7.94% dividend. All in all, not to shabby for those looking to cash in on some high paying dividends. The best part is that we all can assume that eventually gas and oil prices will rise and we will be capturing some very nice price gains in addition to the dividends we are being paid out. Because these two sectors seem to be the highest paying route to go, I am going to cherry pick a few good companies that everyone should consider adding to their income producing portfolios.
- The first company I will recommend as one of the best dividend stocks to buy today is Royal Dutch Shell. (RDS.A $32.91) I will let you know right up front that some of the higher paying oil and gas dividend stocks have some serious issues with the underlying fundamentals. So for my recommendations, I took a very safe route in selecting the stocks. They need to have a positive price to earnings ratio and have dividends that are above 3%. With the oil industry getting crushed over the last few years, this is easier said then done. But Royal Dutch Shell fits the bill nicely. They are paying out a handsome 3.89% dividend that started back up in 2014 after it was cancelled in 2008 to help shore up the books after the Great Recession of 2007-2008. Besides having a positive price to earnings ratio, unlike many other rebounding oil companies, this company looks to have a possible price appreciation of $30 a share or about 50% in overall share price. The only negative I can take away from this company’s stock is that it seems to have a bit too high P/E ratio for my liking. The perfect play would have about a 15 for that metric. But during tough times for the oil industry, that is a hard thing to find with great paying profitable companies. With that being said, this company’s combination of great dividends and possible stock price gains gives Royal Dutch Shell a place on the list of the best dividend stocks to buy today.
- The next stock to make the grade in the oil industry is Valero Energy Corporation (VLO $55.47). Valero is only paying out a roughly 7.07% dividend, but that is not the reason this energy company makes the list. It is because they are trading with a very low price to earnings ratio of 14.18 compared to many other companies with that have negative earnings right now. This company is sporting a great low p/e ratio and a above inflation dividend. That is the perfect combination of good metrics that land this stock in my best dividend stocks to buy today list.
- This next stock is a money maker when it comes to securing a great dividend paying stock. Suburban Propane Partners LP (SPH $14.32) is paying out a ridiculous 16.76% dividend AND having a positive price to earnings ratio to make it even better. The only problem I have with this company is that they are lacking a bit in said earnings. Paying out more than you are earning will end up dooming you in the long run. So one of two things will have to happen, they will either have to increase earnings or the dividend will have to be brought into line with the current share price. There is always the chance that both the price and the dividend drop as well. But with that being said, looking back on this stock to 1996, it has NEVER decreased it’s dividend payout. This is through all the bad times including the Great Recession. Because of these facts, SPH has found a spot on the best dividends to buy today list for good reason.
- The fourth addition to this list is a oldie but a goodie in the dividend stock world. Amerigas (APU $47.99) comes in paying a very nice dividend of 7.83% with a p/e ratio of about 26. I try to steer clear of price to earnings ratios that are above 15 as a general rule, but Amerigas is a unique case for overlooking this. This company has not lowered their dividend payments for well over 20 years. So if their price was to drop to a level where the price to earnings ratio was at 15, the dividend would be well in the double digits. I believe they will not drop their dividend payouts and therefore we are safe to assume that because of the high paying dividend, that the price will continue to stay higher then it probably should, but my portfolio account isn’t complaining. (Unfortunately…this stock got bought out…big gains for us on the buyout price though. $$$)
- We saved the best for last when it comes to great all around dividend stock play for your portfolio. Arc Logistics Partners (ARCX $16.40) has all the right looking parts to make the grade for a long term hold. It is paying out a ridiculous dividend rate of 10.68% and this company also has a fantastic price to earnings ratio of 17.40. This stock is priced right and the dividend is one that you can bank on going forward. They are much like APU in how they deal with their dividend structure. They have yet to decrease the payouts for the last 5 years, and actually increased them over a 100% since 2013. Not that we should expect that kind of dividend increase, but man is that good. I see this stock continuing the upward trend and high dividend payouts that we come to expect. When trying to find the best dividend stocks to buy today, this is the top for this list.
The above list of the best dividend stocks to buy today is just a fraction of one industry. There are so many possibilities out there that can give your portfolios that bang for the buck we are all looking for. If you are looking for some good stock plays, I highly recommend you signing up for the Stock Moe newsletter or subscribing to our free Youtube channel.