Top 3 Dividend Stocks to Buy Right Now
Dividend stocks, sought after by many investors because they generate a steady stream of income, typically become more attractive to a wider range of investors when the stock market is falling or in a recession. This is because while stock prices fluctuate, good dividends remain constant and even increase, increasing the stock’s total return.
In fact, during difficult times, dividends accounted for a higher percentage of the S&P 500’s total return. For example, during the 1970s, 73% of the S&P 500’s total returns came from dividends, compared to dividends during bull markets. In the 2010s, it was only 17%.
Bulls have largely run the stock market over the past 18 months, but the near term is uncertain. So it might be a good time to consider some good, stable dividend stocks to balance things out. Here are three of the best dividend stocks you can buy right now.
1. Nexstar Media Group: Return 4.17%
Nexstar Media (NASDAQ:NXST) owns more than 200 television stations and various networks, including The CW and Food Network. In fact, the company owns more TV stations than any other company in the country.
Nexstar is coming off a record-breaking quarter, with revenue up 90% thanks to increased revenue, cost savings and the sale of its broadcast music affiliate.
As such, Nexstar was a great dividend stock, increasing dividends for 10 consecutive years. It currently pays a dividend of $1.69 per share, after increasing its dividend by 25% in the first quarter. Quarterly payments of $1.69 per share are paid out annually to $6.76 per share, and the dividend yield is 4.17% with a payout ratio of 48%.
This should be a good year for Nexstar, with record ad spending expected in a presidential election year. It’s trading at $163 per share, and its median price target per share is $207, up about 2% since the beginning of the year.
This stock is giving me a buy signal right now because of its dividend and yield potential.
United Bankshares (NASDAQ:UBSI) is a small, regional bank with a large dividend. In fact, it recently achieved Dividend King status, marking its 50th consecutive year of dividend increases in 2023.
The bank recently approved a dividend of 37 cents per share with a yield of 4.34%, one of the highest dividends in the sector. Trading at $34 per share, investors can invest in this stock and feel confident that the bank will continue to increase its dividend based on its performance.
United’s capital strength enabled it to acquire Georgia-based Piedmont Bankshares, which will strengthen its presence in the Mid-Atlantic and Southeast regions of the United States. Once the transaction closes in the fourth quarter, United will invest $32, making it the 39th largest bank in the United States. It has 240 locations in eight states and Washington, D.C., and assets approaching $1 billion.
The stock is considered a consensus buy among analysts with a media target price of $36.50 per share. The deal will strengthen United in a fragmented regional banking market.
3. Verizon Communications: 6.71% return
Verizon Communications (NYSE:VZ), the second-largest wireless carrier in the U.S., has had a choppy decade, with its stock price hovering near flat.
However, dividends remained strong overall. In fact, Verizon has increased its dividend for 19 consecutive years and currently pays a dividend of 67 cents per share, with a yield of 6.71%.
This is one of the highest dividend yields in the entire market, and the current payout ratio of around 56% appears manageable. Payout ratio refers to the percentage of profits that go into paying out dividends, and anything in the 50% range or less is generally considered pretty good.
Verizon is also enjoying momentum, with first-quarter operating revenue up slightly and wireless service revenue up 3.3%. The company also increased free cash flow to $2.7 billion from $2.3 billion in the same quarter a year ago, an important metric for maintaining its dividend.
It also emerged that Verizon and T-Mobile are in talks to acquire parts of powerful regional carrier US Cellular, with each company purchasing the company’s own components in separate deals. If this deal goes through, it could increase Verizon’s market share.
Verizon stock is up about 3% YTD to $40 per share, and with a median price target of $45.50 per share, analysts expect growth.
If you’re worried about the market and want solid dividend stocks to bolster your portfolio, here are three great options.
