Top 20 High-Dividend Stocks for October 2024 and How to Invest
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
The best high-dividend stocks can offer investors income that rises over time.
ABR and FBRT are some of the top dividend stocks by yield right now.
A high dividend yield isn't always a good thing — some are unsustainable, and others are just the result of a low stock price.
Looking for an investment that offers regular income? High-dividend stocks can be a good choice.
What are dividend stocks?
Dividend stocks are shares of companies that regularly pay investors a portion of the company's earnings. Some pay dividends annually, semi-annually or quarterly, while others are monthly dividend stocks. The average dividend yield of some of the top dividend stocks is 12.69%.
The best dividend stocks are shares of well-established companies that increase their payouts over time.
Investors can also choose to reinvest dividends if they don't need the stream of income. Here's more about dividends and how they work.
Companies that pay dividends tend to be well-established, so dividend stocks may also add some stability to your portfolio. That's one reason they're included on our list of low-risk investments.
» Check out our roundup of the best online brokerages for dividend investing
20 high-dividend stocks
Below is a list of 20 of the highest-dividend stocks headquartered in the U.S., ordered by annual dividend yield. This list also takes into account the 5-year average dividend growth rate and dividend payout consistency and includes companies from either the S&P 500 or Russell 2000.
Company | Dividend Yield |
---|---|
? | 16.29% |
? | 12.89% |
? | 12.56% |
? | 12.16% |
? | 11.99% |
Arbor Realty Trust Inc. (ABR) | 11.35% |
Franklin BSP Realty Trust Inc. (FBRT) | 11.16% |
Pennymac Mortgage Investment Trust (PMT) | 11.10% |
Buckle, Inc. (BKE) | 10.79% |
International Seaways Inc (INSW) | 10.72% |
AG Mortgage Investment Trust Inc (MITT) | 10.25% |
Seven Hills Realty Trust (SEVN) | 9.96% |
CVR Energy Inc (CVI) | 8.23% |
Altria Group Inc. (MO) | 8.03% |
Alexander's Inc. (ALX) | 7.81% |
Movado Group, Inc. (MOV) | 7.43% |
Artisan Partners Asset Management Inc (APAM) | 7.42% |
Marketwise Inc (MKTW) | 7.27% |
Eagle Bancorp Inc (MD) (EGBN) | 7.26% |
Washington Trust Bancorp, Inc. (WASH) | 7.17% |
Source: Finviz. Stock data is current as of Oct. 9, 2024, and is intended for informational purposes only. |
Already a NerdWallet member? Sign in here and you'll be redirected back to this page to access the full stock data.
Investing for income: Dividend stocks vs. dividend funds
There are two main ways to invest in dividend stocks: Through funds — such as index-funds or exchange-traded funds — that hold dividend stocks, or by purchasing individual dividend stocks.
Dividend ETFs or index funds offer investors access to a selection of dividend stocks within a single investment — that means with just one transaction, you can own a portfolio of dividend stocks. The fund will then pay you dividends on a regular basis, which you can take as income or reinvest. Dividend funds offer the benefit of instant diversification — if one stock held by the fund cuts or suspends its dividend, you can still rely on income from the others.
NerdWallet rating 4.9 /5 | NerdWallet rating 4.3 /5 | NerdWallet rating 4.6 /5 |
Fees $0 per online equity trade | Fees $0 per trade | Fees $0 |
Account minimum $0 | Account minimum $0 | Account minimum $0 |
Promotion None no promotion available at this time | Promotion 1 Free Stock after linking your bank account (stock value range $5.00-$200) | Promotion Earn up to $10,000 when you transfer your investment portfolio to Public. |
Whether it’s through dividend stocks or dividend funds, reinvesting those dividends can greatly enhance your return on investment: Dividends typically increase the return of a stock or dividend fund by a few percentage points. For example, the historical total annual return (which includes dividends) of the S&P 500 has been, on average, about two percentage points higher than the index's annual change in value.
And that difference can really add up. Using NerdWallet’s investment calculator, we can see that a $5,000 investment that grows at 6% annually for 20 years could grow to over $16,000. Bump that up to 8% growth to include dividends, and that $5,000 could grow to over $24,000.
In general, a good rule of thumb is to invest the bulk of your portfolio in index funds, for the above reasons. But investing in individual dividend stocks with a small portion of your investment portfolio directly has benefits.
Although it requires more work on the part of the investor — in the form of research into each stock to ensure it fits into your overall portfolio — investors who choose individual dividend stocks are able to build a custom portfolio that may offer a higher yield than a dividend fund. Expenses can also be lower with dividend stocks, as ETFs and index funds charge an annual fee, called an expense ratio, to investors.
» Learn more about dividend ETFs
How to invest in dividend stocks
Building a portfolio of individual dividend stocks takes time and effort, but for many investors it's worth it. Here’s how to buy a dividend stock:
1. Find a dividend-paying stock
You can look for stocks that pay dividends on many financial sites, as well as on your online broker's website. You can also check out free stock screeners.
If you're not quite ready to put your hard-earned money on the line, you can always try paper trading first. Paper trading allows you to practice investing with fake money.
» Want some practice first? Try paper trading
2. Evaluate the stock
To look under the hood of a high-dividend stock, start by comparing the dividend yields among its peers. If a company’s dividend yield is much higher than that of similar companies, it could be a red flag. At the very least, it’s worth additional research into the company and the safety of the dividend.
Then look at the stock’s payout ratio, which tells you how much of the company’s income is going toward dividends. A payout ratio that is too high — generally above 80%, though it can vary by industry — means the company is putting a large percentage of its income into paying dividends. In some cases dividend payout ratios can top 100%, meaning the company may be going into debt to pay out dividends.
» Estimate your dividend stock returns with our dividend calculator.
3. Decide how much stock you want to buy
You need diversification if you’re buying individual stocks, so you’ll need to determine what percent of your portfolio goes into each stock. For example, if you’re buying 5 stocks, you could put 2% of your portfolio in each. However, if the stock is riskier, you might want to buy less of it and put more of your money toward safer choices. If you're going to reinvest your dividends, you'll need to recalculate your cost basis — the amount you originally paid to purchase the stock.
The number one consideration in buying a dividend stock is the safety of its dividend. Dividend yields over 4% should be carefully scrutinized; those over 10% tread firmly into risky territory. Among other things, a too-high dividend yield can indicate the payout is unsustainable, or that investors are selling the stock, driving down its share price and increasing the dividend yield as a result.
Another thing to keep in mind is that dividends in taxable brokerage accounts cause taxes to be realized in the year the dividends occur, unlike stocks that do not pay dividends whose taxation primarily occurs when the stock is sold. For investors with taxable accounts and in high income brackets, dividends stock might not be as tax efficient as other options.
» Need more detail? Learn how dividends are taxed
What are the best dividend stocks?
The best dividend stocks may not be the ones with the highest yield. A high dividend yield can indicate many things, and not all of them are good. As stated previously, falling stock prices can increase dividend yields, and some companies go into debt by overspending on their dividend. The over-spenders may eventually be forced to cut their dividends if they become unsustainably expensive.
The stocks listed in the chart may have high yields, but that doesn't necessarily mean that they're the best dividend stocks for any one investor. For example, if you have an energy-heavy portfolio, and you're looking to add some dividend-paying stocks, you may want to ensure that you're not adding even more energy stocks to your portfolio. The ideal portfolio varies person to person, based on individual goals and timelines for those goals. Besides, many investors are better off buying index funds rather than individual stocks.
If you're looking for dividend stocks with a low risk of cutting their dividends, check out the dividend aristocrats — a group of S&P 500 stocks that have increased their dividends every year for at least 25 years.
» Dive deeper: Learn how to buy stocks
On a similar note...