If you’re looking to optimize your investment income, you want to consider the best dividend stocks right now. Owning the best dividend stocks can drive both significant capital appreciation and investment income for private investors.
When screening for dividend stocks with yields in excess of 4% and rock-solid fundamentals, our research team drilled results down to this shortlist of top dividend stocks.
LyondellBasell Industries – LYB 📈
Keep on reading to learn what makes these stocks stand out to be some of the best stocks to invest in right now.
3 good reasons to own dividend stocks
Investing in dividend stocks can be a strategic choice for stock investors looking to build wealth through a steady and reliable source of income. Here are three good reasons to consider adding them to your portfolio:
1/ High yield dividend stocks provide regular, predictable income through dividends, which can be reinvested to compound returns.
2/ Dividend stock investing can act as a risk mitigation technique. Stocks that consistently pay dividends are often well-established and financially stable, which can lower investment risk compared to non-dividend-paying stocks.
3/ Qualified dividends received from dividend stocks are taxed at a lower rate than regular income, providing a tax-efficient way to increase wealth.
Quality is key
To single out the 5 best dividend stocks, our research team specifically looked for…
💰 Dividend yield > 4%
🚀 Strong long-term growth prospects
🏆 Industry-leading profitability
Many investors err by chasing for yield. Ultra-high dividend yields, though very enticing, generally turn out to be too good to be true. More often than not, ultra-high dividend yield is the result of an incessantly falling stock price.
To maximize their chances for long-term success, investors must compromise for a reasonable dividend yield while making sure the stock is fundamentally sound.
There must be growth in revenue and profits. The company should have a strong market position. And, it should be very profitable so that it can sustain dividend payouts. A stock that checks all these boxes will provide you with consistent yield and capital appreciation on top.
The Ziggma Stock Score can assist you in this research. It captures over 40 indicators on growth, profitability, valuation and financial strength.
Also Read: How to Calculate Dividend Payout
Short profiles of our favorite dividend stocks to own right now
These are the top 5 dividend stocks right now based on our fundamental analysis.
LyondellBasell Industries LYB 📈
Dividend yield: 4.89%
Ziggma Score: 90
2024 Price/Earnings: 12.3x
Net profit margin: 6.5%
LyondellBasell Industries operates as a chemical company in the United States and internationally. It describes itself a global leader in developing and supplying materials that enable packaging, health, and transportation solutions that are critical to our modern way of life.
Janus Henderson Group – JHG 📈
At the current stock price, LYB provides a 4.9% to stockholders. A leader in the global chemical industry, the company clearly has moat in an industry with high barriers to entry. Having invested heavily in technologies that support a circular and low-carbon economy LYB is well positioned to benefit from the growing trend towards sustainability and environmental responsibility.
Dividend yield: 4.71%
Ziggma Score: 82
2024 Price/Earnings: 11.5x
Net profit margin: 21.8%
Janus Henderson Group is an asset manager providing services to institutional, retail clients, and high net worth clients. The group manages separate client-focused equity and fixed income portfolios.
Why JHG is attractive
In addition to a juicy 4.7% yield, we like JHG for its very reasonably priced growth prospects. The company trades at 11.5x 2024 earnings with net profit forecast to grow by 21%.
We also appreciate that the company’s commitment to shareholder value, as evidenced by its US$150 million share repurchase program (3% of marketcap).
Kinder Morgan – KMI 📈
Dividend yield: 5.97%
Ziggma Score: 94
2024 Price/Earnings: 15.7x
Net profit margin: 16.2%
Kinder Morgan operates as an energy infrastructure company in North America. The company operates through four segments: Natural Gas Pipelines, Products Pipelines, Terminals, and CO2.
Why KMI is attractive
Similar to JHG, KMI’s underlying business has very solid growth momentum. With 40% of natural gas produced in the US flowing through its pipelines, KMI is the dominant player in its industry.
KMI has done a great job actively expanding and upgrading its infrastructure to meet growing energy demand. This includes significant investments in natural gas and renewable energy projects, which are critical for transitioning to low-carbon energy sources.
Contary to earlier years, the company has demonstrated consistent financial performance with a strong emphasis on maintaining and increasing shareholder value through dividends and share repurchase programs.
Lamar Advertising Co – LAMR 📈
Dividend yield: 4.23%
Ziggma Score: 96
2024 Price/Earnings: 23.5x
Net profit margin: 23.5%
Lamar Advertising is one of the largest outdoor advertising companies in North America, with over 352,000 displays across the United States and Canada. Lamar offers advertisers a variety of billboard, interstate logo, transit and airport advertising formats, helping both local businesses and national brands reach broad audiences every day. In addition to its more traditional out-of-home inventory, Lamar operates the largest network of digital billboards in the United States with approximately 3,800 displays.
Why LAMR is attractive
We like LAMR’s consistently growing revenue stream driven by long-term contracts with advertisers. This is a Buffet-type business with real assets and a very strong market position.
The company is progressively expanding its digital billboard portfolio. These offer flexible and dynamic advertising solutions that can generate higher revenues per unit than traditional static billboards.
Oneok – OKE 📈
Dividend yield: 4.86%
Ziggma Score: 92
2024 Price/Earnings: 16.1x
Net profit margin: 15%
Oneok is a leading midstream service provider in the U.S., specializing in the gathering, processing, storage, and transportation of natural gas and natural gas liquids (NGLs). The company operates one of the nation’s most extensive pipeline networks, connecting major supply basins with key market centers across more than 50,000 miles of pipeline. Additionally, ONEOK’s strategic assets include natural gas gathering systems, processing plants, and storage facilities, positioning it well within the energy sector’s midstream segment.
Why OKE is attractive
Similar to KMI, OKE has achieved a very strong market position with OKE focusing on the midstream sector. It has attractive overall growth prospects and managed to double its profit margin over the past three years. The company’s strong level of profitability positions it well for sustainable dividend payments to shareholders as well as future dividend increases.
Disclosure
Ziggma team members presently hold shares in some of the stocks mentioned in this article.
Important Notice
This article is not investment advice. We cannot predict whether these stocks will go up or down. Our analysis is centered entirely on publicly available information. Please do your own homework prior to making an investment decision.