Summary: Investing in dividend stocks can be an effective strategy for generating consistent income, even during uncertain market conditions. In this guide, we present three of the best dividend stocks to buy in 2024 with a diverse and well-balanced portfolio. To buy stocks on our list, investors can open an account at an online stock trading platform such as eToro.
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What are dividend stocks?
Dividend stocks
Investing in dividend stocks can be an effective strategy for generating consistent passive income, even during uncertain market conditions. As an investor, you will have to identify high-quality dividend stocks with strong fundamentals, sustainable dividend yields, and potential for dividend growth.
When searching for the best dividend stocks to buy, pay close attention to factors like dividend yield, payout ratio, and the company’s track record of dividend growth. A high dividend yield indicates the amount of income you can expect to receive relative to the stock’s price, while a sustainable payout ratio demonstrates that a company can maintain and grow its dividends over time. Additionally, companies with a history of dividend growth are likely to continue rewarding shareholders with increasing dividend payouts in the future.
3 best dividend stocks to buy in 2024
Investing in dividend stocks can be a decent investment strategy if you’re looking for passive income and a somewhat safer entry into the market. To get started, you can check out one of the companies on our short list of the best dividend stocks to buy in 2024 below:
- McDonald’s (NYSE: MCD);
- Texas Instruments (NASDAQ; TXN);
- VICI Properties (NYSE: VICI).
Note
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1. McDonald’s (MCD)
Industry: Fast food
Dividend yield as of December 2023: 2.33%
Market cap as of December 2023: $207.54 billion
McDonald’s is one of the most famous fast-food restaurant chains, but it has also proven itself to be one of the more attractive dividend stocks to consider in 2024. A blue-chip stock and one of the prestigious Dividend Aristocrats — i.e., S&P 500 index companies that consistently pay and increase dividends — McD’s has gained competitive advantages further fueled by its strong global presence.
As a long-term investor, you can enjoy a reliable and growing dividend income from McDonald’s stock. With a yield of around 2.3% as of December 2023 and a payout ratio of around 53%, the company shows nothing but financial health while still leaving enough room for future dividend increases. Moreover, the fast food chain’s recent venture into the delivery market also stands to contribute to its long-term growth.
McDonald’s stock price today
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2. Texas Instruments (TXN)
Industry: Semiconductors
Dividend yield as of December 2023: 3.5%
Market cap as of December 2023: $140.96 billion
Texas Instruments is a leading semiconductor company with a solid dividend yield and a history of increased payments. As another part of the S&P 500 index, Texas Instruments enjoys strong fundamentals and shows resilience during market volatility.
The company’s payout ratio of around 64% indicates financial stability and the potential for dividend growth in the future, which would continue its tradition of 25 consecutive years. Investors remain confident in the Dallas firm as the demand for semiconductors in automotive and industrial applications allows the company to maintain its competitive advantage even during inflation and interest rate increases.
Texas Instruments stock price today
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3. VICI Properties
Industry: Real estate
Dividend yield as of December 2023: 5.43%
Market cap as of December 2023: $31.60 billion
VICI Properties is a real estate investment trust (REIT) focusing on leisure properties. It boasts an attractive yield of around 5.4% as of December 2023 and a history of steadily increasing payouts since its initial public offering (IPO) in 2018.
While the real estate industry can be vulnerable to adverse economic cycles, VICI has somehow demonstrated strong financial health with its payout ratio of around 70%. In addition, the NYC firm has diversified its investments and secured long-term leases, ensuring a steady and more diverse flow of income for dividend investors.
Furthermore, real estate investment trusts are often seen as a hedge against inflation and recession, being a more stable source of passive income during market fluctuations.
Note
VICI Properties stock price today
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Where to buy stocks?
You can easily buy stocks on our list through online stock trading platforms and brokerages. Our go-to brokerage is eToro, a fully licensed trading platform with millions of active daily users and helpful trading features such as:
- Commission-free stock and ETF trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- Charting tools;
- User-friendly platform.
Highly Rated Stock Trading & Investing Platform
-
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
Is investing in dividend stocks worth it?
Many investors find dividend stocks appealing as they are a source of passive income. That is, simply owning dividend shares grants investors access to periodic payouts, usually on a quarterly basis, without much additional hassle and asset micromanagement.
Moreover, the best dividend stocks are known for payouts during all sorts of economic cycles, even during market downturns. This is mostly because dividend-paying companies, such as Dividend Aristocrats, are usually large and well-positioned companies with reliable and diverse income streams.
While safer investments that yield passive income often mean lower average returns, data suggests that dividend-paying stocks tend to outperform the average market return. In other words, dividend investing doesn’t necessarily imply you will miss an opportunity to achieve share price appreciation surpassing the market average.
Pros and cons of dividend stocks
Pros
- Passive income;
- A lot of companies increase their dividend every year;
- Best dividend stocks are shares in companies with good fundamentals.
Cons
- Dividends are not exempt from taxation;
- It is possible that the company can stop distributing dividends.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about dividend stocks
What are dividend stocks?
Dividend stocks are shares in companies that distribute a portion of their profits to shareholders.
How are dividends paid?
Dividends are usually paid in cash. Some companies may also offer dividend reinvestment plans (DRIPs).
Are dividends guaranteed?
No, dividends are not guaranteed, and the company could, in theory, stop distributing them at any time.
Are dividends taxed?
Yes, dividends are subject to taxation.
What are the best dividend stocks to buy in 2024?
The best dividend stocks to check out in2024 include McDonald’s (NYSE: MCD), Texas Instruments (NASDAQ; TXN), and VICI Properties (NYSE: VICI).
Where can I buy dividend stocks?
You can invest in dividend stocks by opening an account at online stock brokerage platforms such as eToro.
When to sell dividend stocks?
You can sell your dividend stocks if the company stops paying dividends or starts to lower them.
