5 Dividend Stocks to Buy for Quality and Safety

Geopolitical tensions, rising interest rates, and rich asset valuations are only some of the factors holding back American stocks this year.

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Geopolitical tensions, rising interest rates, and rich asset valuations are only some of the factors holding back American stocks this year. Trying to game this kind of market is a fool’s errand – no one can accurately forecast the market’s short-term performance with any consistency.

But identifying dividend stocks to buy that have safe and growing payouts can lead to steadier returns during volatile and calm times alike. In fact, dividends have made up about 40% of total returns for U.S. stocks since 1970, per data from JPMorgan.

Today’s list of five high-quality dividend stocks not only offer safe payouts, but possess defensive characteristics that are likely to help investors preserve capital during the next downturn. These businesses all have excellent Dividend Safety Scores – a metric developed by Simply Safe Dividends (opens in new tab) to help investors avoid dividend cuts and generate safer income. Since 2016, the Dividend Safety Score system has correctly flagged 98% of dividend cuts before they happened.

Besides offering a safe payout, the following five stocks have an average yield above 3%, have paid higher dividends each year for more than a decade, outperformed the S&P 500 Index during the financial crisis, have relatively low betas (i.e., low stock price volatility compared to the market) and generate recession-resistant cash flow streams. Here are five dividend stocks to buy for quality, growing payouts.

Data is as of May 3, 2018. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Click on ticker-symbol links in each slide for current share prices and more.

Brian Bollinger
Contributing Writer, Kiplinger.com

Brian Bollinger is President of Simply Safe Dividends, a company that provides online tools and research designed to help investors generate safe retirement income from dividend stocks without the high fees associated with many other financial products.