In the unpredictable financial landscape of 2023, leaning into dividend stocks to buy may be one of the wisest decisions an investor can make. It’s not about sidelining the thrilling potential of tech pioneers; instead, it’s about understanding the evolving market dynamics.
Recent data suggests a pronounced shift, with investors gravitating from high-stakes, risk-on assets toward the more stable, predictable allure of risk-off assets. This transition is driven by mounting uncertainties, nudging the market away from paying premiums for speculative ventures. Yet embracing dividend stocks doesn’t equate to embracing monotony. Many of these steadfast entities are poised to flourish in the current climate, offering the dual benefit of passive income and the potential for capital appreciation.
For those looking to recalibrate their holdings to mirror the times, the dividend stocks to buy listed below present compelling opportunities.
Dividend Stocks to Buy: Exxon Mobil (XOM)
One of the biggest oil firms in the world, Exxon Mobil (NYSE:XOM) might not align with contemporary political and ideological efforts toward renewable energy. Nevertheless, investors should put XOM on their list of dividend stocks to buy for exceptional relevance. Basically, as exciting as electric vehicles are, most folks are still running combustion-powered cars.
While not the most exciting of market ideas, investors have consistently turned to Exxon for its passive income. Right now, it carries a forward dividend yield of 3.17%. While that’s a bit lower than the energy sector’s average yield of 4.24%, Exxon also commands 40 years of consecutive dividend increases.
Not only that, some insiders appear bullish on XOM. It’s a contested environment to be sure. However, in the end of July and beginning of August, Exxon Director Jeffrey W. Ubben bought a significant amount of shares.
Also, analysts like XOM, rating it a moderate buy with a $123.71 price target, implying almost 8% upside.
Broadcom (AVGO)
A multinational semiconductor firm, Broadcom (NASDAQ:AVGO) might not exactly seem like one of the dividend stocks to buy. After all, the company – being listed in the broader technology sphere – may be subject to the whims of consumer demand. To be quite blunt, it is risky. At the same time, passive income doesn’t necessarily require investing in the most boring ideas available.
On that front, Broadcom carries a forward yield of 2.22%. That’s not the most generous yield, I’ll readily admit. However, it does pop higher than the tech sector’s average yield of only 1.37%. Also, AVGO’s payout ratio sits at 39.87%. Therefore, investors won’t have to worry much about yield sustainability.
Also, what I appreciate here is that the are a few insider buys. Yes, many insiders have decided to sell AVGO stock. However, the most recent transaction involves Broadcom Director Harry L. You buying 1,000 shares of AVGO on Sept. 15. Finally, analysts peg AVGO a consensus strong buy with a $981.81 price target, implying over 18% growth.
Dividend Stocks to Buy: Myers Industries (MYE)
Headquartered in Akron, Ohio, Myers Industries (NYSE:MYE) is a diversified manufacturing and distribution company. Primarily, it focuses on the production of polymer products for industrial, agricultural, automotive, commercial and consumer markets. Basically, MYE might rank among the top dividend stocks to buy for everyday relevancies that go unnoticed but are critical.
Probably more of a typical source of passive income, Myers offers a forward yield of 2.98%. That’s fairly decent and is slightly above the materials sector’s average yield of 2.82%. Also, the payout ratio sits at just under 31%, enabling stakeholders to have confidence in yield sustainability.
What I also appreciate is the strong showing of insider buyers. Most recently, Myers Director Yvette Dapremont Bright bought 1,000 shares on Aug. 29. Earlier, on Aug. 8, Michael P. Mcgaugh, who serves as President and CEO, bought 2,500 shares. Lastly, analysts peg MYE a moderate buy with a $22 price target, implying over 21% upside potential.
NextEra Energy (NEE)
One of the top names in the green and renewable energy space, NextEra Energy (NYSE:NEE) deserves to be on your portfolio no matter what the reason. However, it especially makes sense as one of the dividend stocks to buy amid troubling waters. Basically, the world will need access to various kinds of energy, which should keep the lights on for NextEra indefinitely.
Turning to the passive income component, NextEra carries a forward yield of 2.76%. While that’s a bit shy of the utility sector’s average yield of 3.75%, NextEra also commands 30 years of consecutive dividend increases. And while its payout ratio is a bit elevated at nearly 55%, it’s still reasonable for what you’re getting.
Adding to the bullish narrative, insiders are quite optimistic about their company. Most recently, on Aug. 17, NextEra Director Kirk S. Hachigian bought 10,000 shares. Two days prior, another director, James Lawrence Camaren, bought 4,000 shares.
Analysts praise NEE with a strong buy consensus and a $85.73 target, implying nearly 27% upside.
Dividend Stocks to Buy: RTX (RTX)
A defense contractor, RTX (NYSE:RTX) – which previously traded under Raytheon Technologies – represents a relevant but controversial idea among dividend stocks to buy. Still, one effort to mitigate the controversy is to consider that RTX represents a necessity. Yes, it’s bad enough that weapons of mass destruction exist. However, it’s even worse if your nation is behind on this critical technology.
Looking at passive income, RTX carries a yield of 3.19%, beating out the industrials sector average of 1.64%. Per TipRanks, the company has been growing its dividend since 2020. As well, the payout ratio sits at a decent 45.65%, translating to little worries about yield sustainability.
Moving over to insider transactions, there have been significant moves, mostly those exciting RTX stock. However, the most recent transaction occurred on July 26, with RTX Director James A. Winnefeld Jr. acquiring 100 shares. Last year in April, Winnefeld also added 200 shares. While analysts are split, the overall consensus for RTX comes in at moderate buy. As well, the average price target hits $90, implying 25% upside potential.
Marriott Vacations (VAC)
Although a risky idea for dividend stocks to buy, Marriott Vacations (NYSE:VAC) could also entice intrepid speculators. Structured as a pure-play public timeshare enterprise, Marriot Vacations just might benefit from the wealth gap that accelerated during the Covid-19 crisis. In addition, the broader sentiment surrounding the revenge travel phenomenon may lift VAC.
Regarding the topic at hand, Marriott Vacations carries a forward yield of 2.95%, above the consumer discretionary sector’s average yield of 1.89%. Also, it’s worth pointing out the payout ratio, which sits at 26.62%. While the yield isn’t terribly remarkable, VAC stakeholders can more readily rely on it.
Turning to insider transactions, several investors have sold VAC, especially in 2021 and 2022. However, last month, two big buys occurred. The most recent involving outgoing CFO Anthony E. Terry and the second-most recent involving CEO John E. Geller. Notably, the chief exec bought 5,000 shares. Lastly, analysts peg VAC a unanimous buy with a $152.50 price target, implying over 56% growth.
Banc of California (BANC)
Given the regional banking crisis earlier this year, it’s no shocker to say that Banc of California (NYSE:BANC) symbolizes one of the riskiest dividend stocks to buy. Nevertheless, BANC has held up relatively well. Sure, it lost more than 23% of equity value since the start of the year. However, since May 11, BANC has gained nearly 22%.
Looking at passive income, Banc of California posts a forward yield of 3.29%, which is just a tad higher than the financial sector’s average yield of 3.18%. Still, a major positive is the payout ratio, which lands at a favorably low 26.32%. Therefore, investors should be able to sleep a bit easier at night regarding yield sustainability.
Now, the biggest selling point arguably for BANC is insider transactions. Since September 2018, all such transactions have been buys. Most recently, Director Joseph J. Rice bought 7,500 shares of BANC stock. On a final note, analysts rate BANC a strong buy with a $19.63 target, implying almost 62% upside.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.