By Conor MacNeil  |  Published July 31, 2023  ✔️Reviewed by Rob Koyfman

Investing in dividend stocks can offer steady income and lower market volatility. This approach appeals to many investors, especially as many dividend-paying companies routinely increase their dividends, effectively granting shareholders an annual ‘pay raise’.

However, investors should exercise caution. The highest dividend stocks aren’t always the best dividend stocks. A key measure of sustainability and reliability isn’t just the size of the dividend but its security. High yields could be a warning sign that a company may struggle to maintain dividend payments, potentially leading to a loss of loyal shareholders if the dividend policy changes. One method to evaluate the best dividend stocks is to look at the payout ratio, which represents the percentage of net income a company distributes as dividends. If the ratio surpasses 100%, it means the company is paying dividends not only from earnings but potentially through unsustainable practices like selling assets or raising debt.

Despite a company’s healthy payout ratio, that dividends are never guaranteed. The recent pandemic underscored this as a number of historucally stable dividend-paying companies had to suspend or reduce dividends to strengthen their financial position. We’ve carefully selected and compiled a list of the best dividend stocks, notable for their consistent yearly dividend growth and stable payout ratios. These companies exemplify the successful blend of robust returns and sustainable dividend payouts.

Identifying the Best Dividend Stocks: Our Strategy

Our goal is simple: pinpoint the top 10 dividend stocks based on precise criteria, not just past performance. To achieve this, we’re applying rigorous analysis using the Koyfin screener to evaluate each potential pick’s historical performance and future potential.

Here’s what makes our selections stand out:

• A record of annual dividend increases for a minimum of 10 consecutive years
• Expected earnings growth over the next 2 years
• A payout ratio under 100%
• A minimum of 7.5% CAGR in dividend growth over the past decade
• At least 5% CAGR in revenue growth over the last five years
• A forward Price-to-Earnings (PE) ratio under 35
• A current ratio exceeding 1

Armed with these key insights, we’re ready to present our curated list of the top dividend stocks for 2023. Stay tuned.

10 Best Dividend Stocks:

1. Visa (V)

2. Nike (NKE)

3. Pool Corp. (POOL)

4. Microsoft (MSFT)

5. Mastercard (MA)

6. Intuit (INTU)

7. Landstar System (LSTR)

8. Tractor Supply Company (TSCO)

9. Hormel Foods Corp. (HRL)

10. Church & Dwight (CHD)

*The data for the listed stocks is accurate as of July 31, 2023

Visa Inc., a global frontrunner in payment technology, drives growth and revenue by efficiently expanding its services, from cards to complex payment networks, among its clientele. It capitalizes on technology advancements to improve service usability and extend its worldwide reach. A promising addition is Visa+, a new service designed to streamline person-to-person payments by eliminating barriers across payment networks. You can find a more comprehensive breakdown of Visa’s dividends here.

Key Investment Insights for Visa Inc. (V):

Nike Inc., a top-tier player in sports apparel and equipment, is leveraging its innovation-driven competitive edge to elevate athletes’ experience and expand its global footprint. Key growth drivers include continuous development of novel concepts at the LeBron James Innovation Center, strategic Adobe partnership that fortifies customer relationships via personalization, and promising growth prospects in digitally-savvy markets like Korea, sports-passionate regions of Central and South America, and population-dense areas like Southeast Asia, India, and China. You can access a detailed analysis of Nike’s dividends here.

Key Investment Insights for Nike Inc. (NKE):

Pool Corporation, a leading distributor of pool supplies and leisure products, is thriving with an extensive product range and a customer-centric approach. They’ve outperformed competitors, successfully launching 8 new sales centers this year. A cornerstone of their strategy is POOL360, a tool growing in dealer popularity for its efficiency and added advantages. Their commitment to innovation is apparent in the launch of the POOL360 water test app, a superior online tool that assists independent retailers in achieving perfect water chemistry and increasing sales of their own chemical brands. Dive into more details on Pool Corporation’s dividends here.

Key Investment Insights for Pool Corp. (POOL):

Microsoft Corporation, a global tech leader, excels with its strategy to maximize Microsoft Cloud value, spearhead the AI platform wave, and enhance operational productivity. Significant points include Azure’s increasing market share and its capacity to handle AI-centric tasks. Azure AI’s notable clientele includes IKEA, Volvo, Zurich Insurance, Mercedes-Benz, and KPMG. With their pioneering data platform and Microsoft Fabric, they’re optimizing database, analytics, and governance processes. Azure AI Studio and GitHub Copilot are becoming go-to tools for developers, and Power Automate is experiencing user growth. Discover more details on Microsoft Corporation’s dividends here.

Key Investment Insights for Microsoft Corp. (MSFT):

Mastercard Incorporated, a worldwide technology giant, is recognized for its global payment processing and related services. The firm’s strategy hinges on three primary pillars: Payments, New Networks, and an ensemble of services in Data & Services, Cybersecurity, and Intelligent Services. These offerings drive Mastercard’s sustained growth trajectory. Their dedication to innovation is evidenced in their ‘Labs as a Service’ offering, empowering customers with Mastercard’s advanced tools and techniques. More details on Mastercard’s dividends here.

Key Investment Insights for Mastercard Inc. (MA):

Intuit Inc., a dominant player in financial management and compliance, caters to a diverse client base ranging from freelancers to SMBs. With operations spanning four segments – Small Business & Self-Employed, Consumer, Credit Karma, and ProConnect, the company optimizes finance with resources such as TurboTax and delivers customized guidance through Credit Karma. Innovations like TurboTax Live are projected to increase customer intake by 13% this year, while key acquisitions, namely Credit Karma and Mailchimp, consistently enhance Intuit’s consumer insights. Take a deep-dive into Intuit’s dividends here.

Key Investment Insights for Intuit Inc. (INTU):

Landstar System, Inc. – an expert in diverse transportation services from truckloads to air and ocean freight, and trusted by a wide spectrum of industries, including automotive, retail, and electronics. With a growing cross-border market and successful ventures driven by near-shoring trends, Landstar is in a robust position, despite potential rail sector competition. Take a look into Landstar System’s dividends here.

Key Investment Insights for Landstar System, Inc. (LSTR):

LTractor Supply Company, a US-based rural lifestyle retailer, is seeing growth through the expansion of new stores and the strategic acquisition of Orscheln. Specializing in livestock health and agricultural maintenance tools, they’ve managed to captivate a new customer base, particularly within the poultry sector. Innovations in store layouts and strong performance from Garden Centers reveal their commitment to enhancing customer experience and cost-effectiveness. Check out the dividend information for Tractor Supply Company right here.

Key Investment Insights for Tractor Supply Comp. (TSCO):

Hormel Foods Corporation, a multinational producer of meat and food products, operates in various segments, including Grocery Products, Refrigerated Foods, and Jennie-O Turkey Store. It has improved its margin structure through effective cost management and strategic pricing while tackling inventory inefficiencies. On the innovation front, Hormel is revitalizing the Planters brand with fresh product offerings and making substantial strides with its Go Forward operating model. You can check out the details of Hormel Foods’ dividends here.

Key Investment Insights for Hormel Foods Corp. (HRL):

Church & Dwight Co., Inc., a renowned manufacturer of household and personal care products, offers a broad spectrum from baking soda goods to animal productivity supplements. It’s carved out a significant market share via innovative products and astute acquisitions, such as THERABREATH and Hero. The company’s strategic focus on both premium and value brands has fueled robust consumer demand and improved case-fill rates, thus driving substantial revenue growth. You can check out the details of Church & Dwight’s dividends right here.

Key Investment Insights for Church & Dwight Co., Inc. (CHD):

Our insights are derived solely from historical information and analyst predictions, employing an impartial approach. Please note that our articles do not serve as financial guidance.