Dividend stocks appeal to investors because they deliver consistent income, regardless of market volatility. These companies tend to be financially healthy – after all, only profitable businesses can afford to pay dividends – and often benefit from a stable shareholder base. As a result, they typically hold up well during economic downturns.
With earnings season revealing unexpected disappointments and Trump’s tariffs adding to geopolitical uncertainty, now may be an ideal time to focus on dividend-paying stocks for stability and income.
In this article, we’ll explore what makes dividend stocks so resilient and use the Investing.com screener to find high-yielding dividend stocks that offer both safety and impressive upside potential in today’s uncertain environment.
What to Look for When Choosing Dividend Stocks
To choose the best dividend stocks to buy, investors should consider several parameters, the most important of which is arguably the dividend yield, which is expressed as a percentage of the annual gain that the dividend represents compared to the current stock price.
However, other factors come into play, such as the proportion of profits a company allocates to dividends. If a company already allocates almost all of its profits to dividends, there is little chance that these will increase further. Furthermore, a company that pays out almost all of its profits to shareholders has few funds to expand or invest.
We can also consider the rate of dividend growth, over 3 or 5 years, for example, or the number of years a company has been paying dividends. The longer a company has been paying dividends, the more likely it is to continue doing so.
Finally, it’s also essential to look at overall financial health and valuation, as is the case with all types of stocks, to make sure you’re not investing in overvalued stocks.
How to Find Quality Dividend Stocks to Buy
With all this in mind, we headed to the Investing.com screener in search of the best US dividend stocks, focusing more specifically on stocks in the S&P 500 index.
Specifically, we set up a search for stocks in the index that combine the following qualities:
Dividend yield above 4%.
A dividend payout history of over 5 years
Payout ratio below 75%.
Upside potential of over 10% according to InvestingPro Fair Value.
This research enabled us to identify 12 stocks, which you will find below:
Note that the dividend yield of these stocks ranges from 4.1% to 7.4%, while their upside potential according to Fair Value ranges from +13.6% to +52.8%.
Moreover, these are stocks from a variety of sectors. The list is therefore a good starting point for investors wishing to build a portfolio of dividend stocks focused on the biggest names on the US stock market.
For investors wishing to broaden their search to all US stocks, not just the S&P 500, the Investing.com screener offers several specialized predefined screens:
*Please note: Some predefined screens are reserved for InvestingPro, Pro+ plan subscribers.
These predefined screens enable you to apply several search parameters in a single click, and can then be modified and customized.
In all, more than 20 predefined screens are available on the Investing.com screener to suit investors of all profiles.
Please note, however, that several predefined screens are reserved for InvestingPro subscribers with the Pro+ plan.
Finally, the features covered in this article are just a small part of what InvestingPro has to offer.
InvestingPro provides a comprehensive suite of tools designed to help investors make informed decisions in any market environment. These include:
AI-managed stock market strategies re-evaluated monthly
10 years of historical financial data for thousands of global stocks
A database of investor, billionaire, and hedge fund positions
And many other tools that help tens of thousands of investors outperform the market every day!
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