best dividend stocks 2021

Best Dividend Stocks To Invest In 2021

Over the years, dividend stocks have proved to be a loyal vehicle for investors who prefer predictable income, which comes with a promise of good potential in the long term. Since the start of the pandemic, markets have been in a rally mode. This doesn’t look like slowing down anywhere in near future with the vaccine already being in the application phase.  Thus it is a good time to build a portfolio and identify the best dividend stocks 2021. 

As an investor, you must understand that not all dividend stocks will prove to be a good long-term investment. For any long-term investor, finding the best dividend stocks for 2021 can make a landmark change in his portfolio returns. Keep reading to find the best dividend stocks 2021 you can invest in.

What Is Dividend?

best dividend stocks 2021

Source: stockanalysis.com

Let’s have a basic understanding of what a dividend is. In simple terms, a dividend is a return,  in form of a reward given by public traded companies to their shareholders. Companies are giving dividends as a reward for the money invested in them by the shareholders. 

When a company distributes a part of its net profits, it is known as a dividend. The payouts on dividends can be monthly, quarterly, or annually distributed among the shareholders. 

Characteristics Of A Good Dividend Stock

It is advisable to be aware of a few characteristics that would help you identify a good dividend stock before you actually start investing. Let’s have a look at these characteristics of a good divide:

  • Don’t rely only on immediate results. Zero down on a company with a good track record.
  • A dividend stock with strong fundamentals has proven to give more long-term profitability than others.
  • Go for a company with a strong and transparent balance sheet.
  • Look for an upward movement in dividend distribution over time by a company.
  • Companies with consistent long-term growth are more reliable to invest in.

Best Dividend Stocks 2021

Companies SymbolYield(%)
CloroxCLX2.2
BlackRockBLK2
CumminsCMI2.2
Realty IncomeO4.5
LTC PropertiesLTC6
Stag IndustrialSTAG5
BungeBG2.9
KrogerKR2.2
Main Street CapitalMAIN7.6
Texas InstrumentsTXN2.3
Packaging Corp Of AmericaPKG2.8
3M Co.MMM3.6

best dividend stocks 2021

Source: investorplace.com

While you are building your portfolio for 2021, here is a list of the best dividend stocks for 2021, which hold a promise for both growths as well as shareholder-friendly dividends.

1) Best Dividend Stock: Clorox (CLX)

CLX was founded in 1913 and for over five decades, it was into manufacturing of a single product bleach. This all-in-one product was brought into the US market at the time when cleanliness was being promoted as a major health concern.

Soon after, it became a household product and today it boasts of a product line of over a dozen similarly well-known brands. The margins have been relevantly high on these low-priced products as the company has managed to avoid adding too many products to its focus product. 

CLX is a top dividend stock to look out for. Its dividend has consistently risen every year for over 25 years now. It has shown a rise in its dividend for over 40 years. In the past year, the stock rose a whopping 24% and gave a 2.2% dividend to its shareholders.

2) Best Dividend Stock: BlackRock (BLK)

In wake of the pandemic, BLK has come forward as a company that can manage grave challenges responsibly. The Fed and U.S. Treasury approached BLK to build the portfolios and manage the stocks and bonds purchased by the government. 

BLK offers ETFs for individual investors and several other money management services for corporates, institutions, and governments all over the world. The company holds $7.8 trillion worth of assets under its wing and its stock is 37% up and offers a 2% dividend steadily.

Also Read: Best Penny Stocks for 2021

3) Best Dividend Stock: Cummins (CMI)

Established in 1919, CMI is one of the U.S.’s top diesel engine makers. It manufactures diesel engines for light, medium, and heavy-duty vehicles, natural gas-powered engines, and a range of other products.

CMI is a future-oriented company and does not stay limited to its signature diesel engines. It took over Hydrogenics, a top hydrogen fuel cell maker, in 2019. Institutional investors who are looking for environment-friendly alternatives find help with the company. CMI stock grew 46% in the previous year and delivered a dividend of 2.2%.

4) Best Dividend Stock: Realty Income (O)

Realty Income is a retail landlord and came out with its Initial Public Offering (IPO) in 1994. The monthly dividend company is famous for its consistency and has made 604  consecutive monthly dividend payments and has raised dividends for the last 92 quarters consecutively, which is rather impressive. Its dividend has compounded at an annual growth rate of 4.5% and its current market value stands at $21.5 billion. 

5) Best Dividend Stock: LTC Properties (LTC)

LTC Properties is a landlord specializing in skilled nursing facilities and senior living properties. Nursing homes were hit hard during the pandemic, with a huge number of would-be senior tenants postponing their shifting into a nursing facility in wake of the pandemic. 

Although the present times look tough for the nursing facilities, the aging of the baby boomers is expected to create a huge demand for nursing facilities in the future. The market value of the company is estimated at $1.5 billion and its dividend yield is 6%.

6) Best Dividend Stock: Stag Industrial (STAG)

Stag Industrial is a market leader in logistical and light industrial properties like distribution centers. It is a new age economy landlord with about 40% of its portfolio handling e-commerce activities. The scope of its business can be understood by the fact that Amazon.com is its single biggest tenant. 

The market value of the company is estimated at $1 trillion by its management, of which, the company makes up about 0.5% of it. This conservatively financed company pays a promising 5% monthly dividend and holds a market value of approx. $4.4 billion.

7) Best Dividend Stock: Bunge (BG)

Founded in 1818 in New York, Bunge is a world leader among agricultural commodity companies. It is involved in wheat, sugar, edible oils, bioenergy, fertilizers. etc. Presently, Bunge is associated with around 70,000 farmers, has 360 support terminals and a staff of 31,00 employees all over the world. 

Bunge is a reliable and crucial food supply both in and after the pandemic. The stock saw a growth of 23% last year and trading at a P / E of 20, it gives a dividend of 2.9%.

8) Best Dividend Stock: Kroger (KR)

Next on our list of dividend stocks to invest in 2021 is Kroger. Kroger is the biggest grocery store chain in the U.S. The pandemic came with a mixed back of opportunities as well as problems for the company.

It was a difficult task to manage the large workforce during such times. Additionally, managing the logistics for moving food through a vast supply chain to the stores was also not easy. Since during the pandemic, the staff available had to be significantly cut down, it was an additional challenge to complete delivery and pick-ups for the stores. But the business sprang back well and showed a growth of 17% in the previous year and a dividend of 2.2%.

9) Best Dividend Stock: Main Street Capital (MAIN)

Main Street Capital is a business development company, based in Houston, Texas. It provides debt and equity capital to middle and smaller market companies. It acts as a middleman and provides funds to companies that need more capital than what their local banks and Small Business Administration can provide. 

Main Street has a smart payout policy, where it pays small monthly dividends and twice a year, tops that payout with a bonus payout.it keeps the regular payouts manageable for the company even during tough times. The monthly dividend at main Street stands at a good 7.6% presently.

10) Best Dividend Stock: Texas Instruments (TXN)

TXN is comparatively more of an industrial chipmaker. It builds essential components in a huge array of electronics, focusing on analog and embedded processors. It can be said that TXN provides the essentials to the tech world. The stock grew a good 34% in the past year and the dividend stood at a strong 2.3%.

11) Best Dividend Stock: Packaging Corp Of America (PKG)

Established in 1959, this company manufactures packing material for shipping. This is a rather steady industry and the previous year has been particularly good for the company with e-commerce creating a crucial place for itself during the pandemic. The stock run for last year stood at 33% for the company with the dividend standing at 2.8%.

12) Best Dividend Stock: 3M Co. (MMM)

MMM is a well-diversified chemical giant that has its operations in 70 countries all over the world. Founded in 1902, the company has its headquarters in St. Paul, Minnesota. It is a market leader in several industries such as electronics and telecommunications, display and graphics, transportation, industrial safety, etc. 

The current valuation of 3M stands at $95.5 billion and sales at more than $32 billion. 3M, also called the ‘Dividend King’, has raised dividends for consecutively 62 years. 3M has a dividend yield of 3.6%, with an average yield of 2.6% over the last ten years.

These best dividend stocks of 2021 when blended together in a balanced mix will help you move a step ahead towards becoming a successful and informed investor in 2021.  

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