Top 10 Dividend Stocks at XTB

What are dividend stocks?

Dividend stocks are shares of publicly traded companies that distribute a portion of their earnings to their shareholders in the form of dividends. These dividends are typically paid on a regular basis, such as quarterly, and are usually in the form of cash or additional shares of stock. Dividend stocks are sought after by investors for their potential to generate a steady stream of income, making them particularly appealing to income-oriented or retirement-focused investors.

In this article, we'll explore the top 10 dividend stocks as of 2023, considering factors like dividend yield, dividend growth, stock price, sector and industry and market conditions.These stocks pay out a portion of their profits to shareholders on a regular basis, typically quarterly. The amount of the dividend is expressed as a yield, which is the dividend per share divided by the stock price.

Top 10 dividend stocks at XTB: 

Medical Properties - Equity Real Estate Investment - 16.55%

Medical Properties Trust (MPW) is a real estate investment trust (REIT) that specialises in owning and operating healthcare facilities. MPW's portfolio includes over 440 hospitals, skilled nursing facilities, and other healthcare properties in the United States and Europe.

As a REIT, MPW is required to pay out at least 90% of its taxable income to shareholders in the form of dividends. This makes MPW a popular investment for income investors.

MPW has a long track record of success, and it has consistently paid out a dividend to shareholders since 1994. MPW's dividend yield is currently over 16.5%, which is significantly higher than the yield on the 10-year Treasury bond.

MPW's dividend is supported by a strong portfolio of healthcare properties. The healthcare sector is relatively recession-proof, and it is expected to continue to grow in the coming years. This means that MPW is well-positioned to continue to pay a high dividend to shareholders.

However, it is important to note that MPW is a REIT, and REITs are subject to the same risks as other real estate investments. These risks include rising interest rates, which can make it more expensive for REITs to finance their operations, and economic downturns, which can lead to lower occupancy rates and rental income.

Overall, MPW is a well-managed REIT with a strong track record of success. MPW's dividend yield is significantly higher than the yield on the 10-year Treasury bond, and MPW is well-positioned to continue to pay a high dividend to shareholders. However, investors should be aware of the risks associated with REITs before investing in MPW.

VF Corp -  Textiles, Apparel Luxury Goods - 8.53%

VF Corporation (NYSE: VFC) is an American global apparel and footwear company founded in 1899 and headquartered in Denver, Colorado. It owns a number of well-known brands, including The North Face, Vans, Timberland, Dickies, Supreme, and Smartwool.

VF Corp is a leading player in the global apparel and footwear industry. The company's products are sold in over 170 countries and territories. VF Corp generated over $13 billion in revenue in its fiscal year 2022.

VF Corp is a well-managed company with a strong track record of success. The company has consistently generated positive earnings and cash flow over the past many years. VF Corp is also a dividend payer, and it has paid out a dividend to shareholders for over 40 consecutive years.

VF Corp's current dividend yield is 8.53%, which is significantly higher than the average dividend yield of companies in the S&P 500 index (about 1.5%). This makes VF Corp an attractive investment for income investors.

VF Corp has a long track record of paying dividends to shareholders. The company has paid a dividend for over 40 consecutive years, and it has increased its dividend payout for the past 49 years. This demonstrates VF Corp's commitment to returning capital to shareholders.

VF Corp's dividend is supported by a strong cash flow position. The company generated over $1.8 billion in free cash flow in its fiscal year 2022. This gives VF Corp the financial flexibility to continue to pay a high dividend to shareholders.

VF Corp is a good investment for investors who are looking for a company with a strong track record of success, a diversified portfolio of brands, and a global presence. However, it is important to note that VF Corp is a cyclical company, and its earnings and stock price can be affected by economic downturns.

 Atlantica - Independent Power and Renewable 7.78%

Atlantica Sustainable Infrastructure plc (AY) is a company that invests in, develops, and manages renewable energy, energy efficiency, and infrastructure assets. Atlantica has a portfolio of over 1,000 assets in 18 countries, with a total installed capacity of over 12 GW.

Atlantica is a good investment for investors who are looking for a company with exposure to the growing renewable energy and energy efficiency sectors. Atlantica is also a good investment for income investors, as the company pays a quarterly dividend.

Atlantica's current dividend yield is 7.78%, which is significantly higher than the average dividend yield of companies in the S&P 500 index (about 1.5%). This makes Atlantica an attractive investment for income investors.

Atlantica has a long track record of paying dividends to shareholders. The company has paid a dividend since its initial public offering in 2014, and it has increased its dividend payout for the past five years. This demonstrates Atlantica's commitment to returning capital to shareholders.

Atlantica's dividend is supported by a strong cash flow position. The company generated over $900 million in free cash flow in its fiscal year 2022. This gives Atlantica the financial flexibility to continue to pay a high dividend to shareholders.

However, it is important to note that Atlantica's dividend is not guaranteed. The company's board of directors decides whether or not to pay a dividend on a quarterly basis. If Atlantica's earnings decline or if the company needs to invest heavily in its business, the board of directors may decide to reduce or eliminate the dividend.

Speedy Hire - Trading Companies and Distributors - 7.43% 

Speedy Hire plc (SPD) is a UK-based company that provides tool and equipment hire services to a wide range of industries, including construction, manufacturing, and events. The company has over 300 depots across the UK and Ireland.

Speedy Hire is a good investment for investors who are looking for a company with exposure to the UK construction industry. The construction industry is expected to grow in the coming years, and Speedy Hire is well-positioned to benefit from this growth.

Speedy Hire is also a good investment for income investors, as the company pays a quarterly dividend. Speedy Hire's current dividend yield is 7.43%, which is significantly higher than the average dividend yield of companies in the FTSE 100 index (about 3.5%).

Speedy Hire has a long track record of paying dividends to shareholders. The company has paid a dividend since its initial public offering in 1986, and it has increased its dividend payout for the past 11 years. This demonstrates Speedy Hire's commitment to returning capital to shareholders.

Speedy Hire's dividend is supported by a strong cash flow position. The company generated over £100 million in free cash flow in its financial year 2022. This gives Speedy Hire the financial flexibility to continue to pay a high dividend to shareholders.

UWM Hire - Thrifts and Mortgage Finance - 7.21%

UWM Holdings Corporation (UWMC) is a US-based mortgage lender. UWM is the largest wholesale mortgage lender in the United States, and it is also one of the largest independent mortgage lenders in the country. UWM originates, securitises, and sells residential mortgages.

UWM is a good investment for investors who are looking for a company with exposure to the US housing market. The US housing market is expected to grow in the coming years, and UWM is well-positioned to benefit from this growth.

UWM is also a good investment for income investors, as the company pays a quarterly dividend. UWM's current dividend yield is 7.21%, which is significantly higher than the average dividend yield of companies in the S&P 500 index (about 1.5%).

Please note that like many  businesses the company's board of directors decides whether or not to pay a dividend on a quarterly basis. If UWM's earnings decline or if the company needs to invest heavily in its business, the board of directors may decide to reduce or eliminate the dividend.

Jackson Financial - Diversified Financial Services - 6.88%

Jackson Financial Inc. (JXN) is a US-based diversified financial services company. Jackson Financial provides a range of financial products and services, including retirement plan services, annuities, and life insurance. The company has over $1 trillion in assets under management.

Jackson Financial is a good investment for investors who are looking for a company with exposure to the retirement savings market. The retirement savings market is expected to grow in the coming years, and Jackson Financial is well-positioned to benefit from this growth.

Jackson Financial is also a good investment for income investors, as the company pays a quarterly dividend. Jackson Financial's current dividend yield is 6.88%, which is significantly higher than the average dividend yield of companies in the S&P 500 index (about 1.5%).

However, it is important to do your own research before investing in any stock.

Pennon - Water Utilities 6.62%

Pennon Water is the water utility business of Pennon Group, a British multinational company that provides water and wastewater services in the United Kingdom. Pennon Water is the sixth largest water utility company in the UK, serving a population of over 4 million people in the South West of England.

Pennon Water's current dividend yield is 6.62%, which is significantly higher than the average dividend yield of companies in the FTSE 100 index (about 3.5%). This makes Pennon Water an attractive investment for income investors.

Pennon Water has a long track record of paying dividends to shareholders. The company has paid a dividend for over 20 years, and it has increased its dividend payout for the past 10 years. This demonstrates Pennon Water's commitment to returning capital to shareholders.

Pennon Water's dividend is supported by a strong cash flow position. The company generated over £200 million in free cash flow in its financial year 2022. This gives Pennon Water the financial flexibility to continue to pay a high dividend to shareholders.

Nordstrom - Multiline retail 4.90%

Nordstrom, Inc. (JWN) is an American luxury department store chain. Founded in 1901 by John W. Nordstrom and Carl F. Wallin, the company is headquartered in Seattle, Washington, and operates 350 stores in 40 states and Canada.

Nordstrom's current dividend yield is 4.90%, which is significantly higher than the average dividend yield of companies in the S&P 500 index (about 1.5%). This makes Nordstrom an attractive investment for income investors.

Nordstrom has a long track record of paying dividends to shareholders. The company has paid a dividend for over 90 years, and it has increased its dividend payout for the past 25 years. This demonstrates Nordstrom's commitment to returning capital to shareholders.

Nordstrom's dividend is supported by a strong cash flow position. The company generated over $1 billion in free cash flow in its fiscal year 2022. This gives Nordstrom the financial flexibility to continue to pay a high dividend to shareholders.

IBM - IT services 4.55%

IBM (International Business Machines) is a multinational technology company headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware, middleware and software, and provides hosting and consulting services in areas ranging from mainframe computers to nanotechnology.

IBM is one of the world's largest information technology companies, with over 350,000 employees serving clients in more than 175 countries as of 2021. The company's main business is IT services, which accounts for about half of its revenue. IBM also sells hardware and software, including mainframes, servers, storage, networking, and software for business applications, artificial intelligence, and cloud computing.

IBM's current dividend yield is 4.55%, which is significantly higher than the average dividend yield of companies in the S&P 500 index (about 1.5%). This makes IBM an attractive investment for income investors.

IBM has a long track record of paying dividends to shareholders. The company has paid a dividend for over 100 years, and it has increased its dividend payout for the past 25 years. This demonstrates IBM's commitment to returning capital to shareholders.

IBM's dividend is supported by a strong cash flow position. The company generated over $10 billion in free cash flow in its fiscal year 2022. This gives IBM the financial flexibility to continue to pay a high dividend to shareholders. However, as mentioned above investors should be aware of the risks associated with investing in technology stocks, such as the potential for cyclicality and obsolescence.

TPG - Trading Companies and Distributors 4.48%

TPG Inc. (NYSE: TPG) is an American global trading company and distributor of specialty chemicals and ingredients. The company was founded in 1992 and is headquartered in Fort Worth, Texas. TPG has over 5,000 employees and operates in over 40 countries.

TPG's current dividend yield is 4.48%, which is significantly higher than the average dividend yield of companies in the S&P 500 index (about 1.5%). This makes TPG an attractive investment for income investors.

TPG has a long track record of paying dividends to shareholders. The company has paid a dividend for over 20 years, and it has increased its dividend payout for the past 10 years. This demonstrates TPG's commitment to returning capital to shareholders.

TPG's dividend is supported by a strong cash flow position. The company generated over $200 million in free cash flow in its fiscal year 2022. This gives TPG the financial flexibility to continue to pay a high dividend to shareholders.

It is also important to note that TPG is a relatively small company with a market capitalisation of under $2 billion. This means that TPG's stock may be more volatile than the stocks of larger companies.

Here are some factors to consider when choosing dividend stocks

Dividend growth: Look for companies that have a history of increasing their dividends over time. This shows that the company is healthy and profitable, and that it is committed to rewarding its shareholders.

Payout ratio: The payout ratio is the percentage of the company's earnings that is paid out in dividends. A high payout ratio can be a sign that the company is not reinvesting enough of its earnings back into the business.

Stock price: The stock price should be reasonable in relation to the dividend yield. A high yield can be misleading if the stock price is too low.

Sector and Industry: Diversify your dividend stock investments across different sectors to reduce risk. Some sectors, like utilities and consumer staples, tend to be more stable and dividend-friendly.

Market Conditions: Keep an eye on broader market conditions and economic indicators. These can impact the stability and growth potential of dividend stocks.

What is the difference between a dividend and a stock split?

A dividend is a payment of money to shareholders, while a stock split is a division of the company's existing shares into more shares. When a company splits its stock, each shareholder will receive more shares, but the total value of their investment will remain the same.

How often do dividends get paid?

To find out when dividends get paid:

1. Click on your preferred market.
2. Click on the ‘i’ button which stands for information.
3. Navigate yourself to the performance tab.
4. You will then be able to see the dividends and pay dates.

When dividends are paid to your account, they will be reflected in your cash balance. You can also check what dividends you have received by checking cash operations in the history tab of the platform.

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How Do Dividend Yields Work?

Dividend yield is calculated by dividing the annual dividend per share by the stock's current market price. It's a percentage that represents the income you can expect to receive from your investment relative to its current value.

 What Is Dividend Growth?

Dividend growth refers to a company's history of increasing its dividend payments over time. It's a sign of financial strength and can help protect your income from the effects of inflation.

Are Dividend Stocks Safe Investments?

While dividend stocks can be less volatile than growth stocks, they are not risk-free. The safety of a dividend depends on the financial health of the company. Be sure to research the company's financials, including its debt levels and cash flow, before investing.

How Can I Find High-Quality Dividend Stocks?

Look for companies with a history of stable or growing dividends, strong financials, and a competitive advantage in their industry. Consider diversifying across different sectors to spread risk.

Can I Reinvest Dividends?

Yes, many companies offer dividend reinvestment plans (DRIPs) that allow you to automatically reinvest your dividends in additional shares of the company's stock. This can accelerate your investment growth over time.

What Are Preferred Stocks, and How Do They Differ from Common Stocks?

Preferred stocks are a type of equity security that often pays fixed dividends and has a higher claim on assets and earnings than common stocks. Preferred shareholders typically have no voting rights in the company.

How Are Dividend Stocks Taxed?

Dividend income is generally subject to taxes. The tax rate depends on various factors, including your income level and the type of dividend (qualified or non-qualified). Consult a tax advisor for personalised guidance.

Should I Invest for High Yield or Dividend Growth?

The choice between high yield and dividend growth depends on your investment goals and risk tolerance. High-yield stocks may offer more immediate income, while dividend growth stocks may provide long-term stability and protection against inflation.

Final Thoughts 

In conclusion, dividend stocks stand as a cornerstone in the world of investment, offering a blend of income generation, stability, and long-term growth potential that appeals to a wide range of investors. They are a testament to the financial strength and maturity of companies that consistently return a portion of their profits to shareholders. Whether you're seeking a reliable income stream to support your financial goals or aiming to fortify your portfolio with dependable assets, dividend stocks have a role to play. 

However do not forget that dividend stocks can still be affected by market fluctuations. Economic downturns can lead to dividend cuts or suspensions. Additionally, rising interest rates can make dividend stocks less attractive compared to fixed-income investments.