7 Dividend Stocks to Buy and Hold for the Next Decade (2023)

FAQs

What is the best paying dividend stock? ›

No matter what stage of life you're in, dividend-paying stocks can be a great way to supplement your income and improve your portfolio's growth potential. Just be sure you research the companies' overall financial health, not just their dividend rates, before investing.

We believe a dividend investor should own at least 20 stocks. However, we recommend diversifying to ETFs and mutual funds as well. Don't try to be smart when you are saving for your retirement. Most private investors fail to beat the market averages.

Briefly, in order to be eligible for payment of stock dividends, you must buy the stock (or already own it) at least two days before the date of record and still own the shares at the close of trading one business day before the ex-date.

To generate $1,000 per month in dividends, you'll need to build a portfolio of stocks that will produce at least $12,000 in dividends on an annual basis. Using an average dividend yield of 3% per year, you'll need a portfolio of $400,000 to generate that net income ($400,000 X 3% = $12,000).

Prudential Financial Inc. Coca-Cola Co. AbbVie Inc. AT&T Inc.

Coca-Cola (KO (opens in new tab), $63.57) is one of Berkshire's oldest holdings and one of the best Warren Buffett dividend stocks. The Oracle of Omaha first started buying the beverage giant's stock in 1988, building his stake to 23.4 million shares by the end of 1989 – a position valued at roughly $1.8 billion.

One frequently used rule of thumb for retirement spending is known as the 4% rule. It's relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement. In subsequent years, you adjust the dollar amount you withdraw to account for inflation.

Can you make a living off stock dividends? ›

Nevertheless, it is still better to have passive income streams than withdraw investments for your retirement expenses. It makes it possible to live off dividends for a long time. You will have an opportunity to maximize the potential value of your investments.

You must hold the shares or interest for 45 days (90 days for certain preference shares) excluding the day of disposal. For each of these days you must have 30% or more of the ordinary financial risks of loss and opportunities for gain from owning the shares or interest.

Yes, dividend stocks may be the right fit for your portfolio if you are looking for an additional source of income. In addition to this, dividend stocks, like all stocks, also come with the potential of value appreciation over the long term.

2023 Dividend Tax Rate. Earning dividends is a great incentive for investing in certain companies and mutual funds. Dividends are particularly useful for people who want to supplement their retirement income. However, like all income, you'll need to pay taxes on any dividends you receive.

Historical dividend payout and yield for CocaCola (KO) since 1964. The current TTM dividend payout for CocaCola (KO) as of February 17, 2023 is $1.76. The current dividend yield for CocaCola as of February 17, 2023 is 2.93%.

Dividend stocks

Dividends are paid per share of stock, so the more shares you own, the higher your payout. Opportunity: Since the income from the stocks isn't related to any activity other than the initial financial investment, owning dividend-yielding stocks can be one of the most passive forms of making money.

What stocks does Warren Buffett own? ›

Besides Apple, those holdings include Bank of America (BAC) and Kraft Heinz (KHC), as well as Coca-Cola (KO) and American Express (AXP). Buffett has owned KO stock and AXP stock since Q1 2001, for example.

Total dividend is 248.25 cents. Average dividend is 11.28 cents. Maximum dividend is 56 cents while minimum dividend is 2 cents.

The company has paid out $1.08 billion in dividends over the last year, and its roughly $2 billion in free cash flow for 2022 means investors shouldn't have to worry about receiving their checks.

A good dividend reinvestment plan (also called DRIP) is vastly superior to taking a dividend payout as cash for most investors. It provides great levels of compound interest, which is the key to long term investing success. In fact, there's much evidence that DRIP investing can result in serious returns.

Some experts criticize dividend producing stocks because dividend payments are taxed twice. Taxes are paid by the corporation and you, the investor, must pay personal income tax on dividends earned over the course of a given tax year.

Is $4 million enough to retire at 65? Yes, you can retire at 65 with four million dollars. At age 65, an annuity will provide a guaranteed level income of $269,200 annually starting immediately for the rest of the insured's lifetime.

How much money needed to retire at age 65? ›

Retirement experts have offered various rules of thumb about how much you need to save: somewhere near $1 million, 80% to 90% of your annual pre-retirement income, 12 times your pre-retirement salary.

To qualify for the lower tax rates, the taxpayer must now hold the dividend-paying stock for at least 61 days during the 121-day period (instead of the current 120-day period) beginning 60 days before the ex-dividend date – the first date that the buyer will not be entitled to receive that dividend.

Yes, dividends can make you rich.

However, it requires regular investment in high-quality dividend stocks, low investment costs, a tax minimization strategy, and a great deal of time in the market.

One way to avoid paying capital gains taxes is to divert your dividends. Instead of taking your dividends out as income to yourself, you could direct them to pay into the money market portion of your investment account. Then, you could use the cash in your money market account to purchase underperforming positions.

Concluding Thoughts About Million Dollar Dividend Portfolios

Building a $1 million stock portfolio that pays dividends is entirely possible. However, it takes time, discipline, and consistency to become dividend income rich. And be a dividend millionaire. Work at it hard enough, smart enough, and long enough.

An aggressive portfolio seeks outsized gains and accepts the outsized risks that go with them. 1 Stocks for this kind of portfolio typically have a high beta, or sensitivity to the overall market. High beta stocks experience greater fluctuations in price than the overall market.

Verizon's next quarterly payment date is on Jan 31, 2023, when Verizon shareholders who owned VZ shares before Jan 08, 2023 received a dividend payment of $0.65 per share. Add VZ to your watchlist to be reminded of VZ's next dividend payment.

Exxon Mobil's upcoming ex-dividend date is on Feb 12, 2023. Exxon Mobil shareholders who own XOM stock before this date will receive Exxon Mobil's next dividend payment of $0.91 per share on Mar 09, 2023. Add XOM to your watchlist to be reminded before Exxon Mobil's ex-dividend date.

The best time to buy dividend-paying stocks is really anytime you find investments that are in a position to survive a period of adversity and go on to thrive all over again when conditions improve.

When should I stop reinvesting dividends? ›

There are times when it makes better sense to take the cash instead of reinvesting dividends. These include when you are at or close to retirement and you need the money; when the stock or fund isn't performing well; when you want to diversify your portfolio; and when reinvesting unbalances your portfolio.

In order to make $5000 a month in dividends, you'll need to invest approximately $2,000,000 in dividend stocks. The exact amount will depend on the dividend yields for the stocks you buy for your portfolio. Take a closer look at your budget and decide how much money you can set aside each month to grow your portfolio.

You can expect an investment portfolio to pay out dividends roughly between 1% to 6% of its value each year. At those dividend yields, you'd need a portfolio value between $100,000 and $600,000 to make $500 per month in dividends.

The Growth And Income Investor

They shoot to have about 50% of their stock portfolio allocated to dividend stocks. The other 50% is focused on non-dividend paying growth stocks. Of course, there is no magic to the 50% allocation. It can be altered in one direction or the other.

Some experts criticize dividend producing stocks because dividend payments are taxed twice. Taxes are paid by the corporation and you, the investor, must pay personal income tax on dividends earned over the course of a given tax year.

If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

One of the first things most new investors learn is that dividend stocks are a wise option. Generally thought of as a safer option than growth stocks—or other stocks that don't pay a dividend—dividend stocks occupy a few spots in even the most novice investors' portfolios.

After the declaration of a stock dividend, the stock's price often increases. However, because a stock dividend increases the number of shares outstanding while the value of the company remains stable, it dilutes the book value per common share, and the stock price is reduced accordingly.

Dividend income is taxable unless you hold your dividend stocks in a tax-advantaged account. Dividend stocks can produce competitive total returns, but they can fall short on share-price appreciation alone. Dividend stocks prove their worth over time, so they're often not suitable for shorter-term investment timelines.

Can you live off of dividend stocks? ›

Is it possible to live off dividends? Yes, some people are able to cover their expenses with cash flow from dividend income. It's not easy, and it takes a long-term focus, but it's definitely possible.

The biggest risk in stocks with high dividend yield

That's because a high yield may signal danger rather than a bargain if it reflects widespread investor skepticism that a company can keep paying its current dividend.

2) Dividend Growth Stocks Have Outperformed the Stock Market over Time. While it may seem counterintuitive, companies that consistently pay and grow their dividends have historically outperformed non-dividend stocks, further increasing the appeal of being a dividend growth investor.

As well, portfolios should be diversified across most if not all of the five main economic sectors. The best time to buy dividend-paying stocks is really anytime you find investments that are in a position to survive a period of adversity and go on to thrive all over again when conditions improve.

Dividend payers are good investments in inflationary times because they tend to have sustainable and relatively predictable cash flows. These cash flows are the lifeblood of payouts to investors and offer a stream of steady income to support returns—if they can be maintained.

Yes – the IRS considers dividends to be income, so you usually need to pay taxes on them.

Can an investor really get rich from dividends? The short answer is “yes”. With a high savings rate, robust investment returns, and a long enough time horizon, this will lead to surprising wealth in the long run. For many investors who are just starting out, this may seem like an unrealistic pipe dream.

A good dividend yield is high enough to meet your current income needs. But low enough to suggest a company's dividend is not at risk. Dividend yields that meet these requirements will typically fall between 2% and 5%. Since a stock with a yield of less than 2% may not provide the investor with enough current income.