Stocks to buy

The start of a bull market is a good time to look for dividend stocks to buy. Is this the start of a new one? It could be, but we still have plenty of issues to sort through. For that reason, among many others, investors are still going to be on the hunt for the best dividend stocks to buy. Specifically, they’ll constantly be looking for names to build an income-based portfolio with.

Whether they consider themselves growth investors, tech investors, value investors or income-oriented investors, dividends provide a great deal of information.

Companies that are able to not only pay but raise their annual dividend year in and year out tend to have rather sound businesses. That criteria isn’t the only factor that matters of course, but it shines a light on decades worth of consistency and execution.

Because these stocks consistently raise their payouts and the names below do run solid businesses, they can become cornerstones to one’s portfolio. In other words, building blocks for future growth and income.

Let’s look at a few dividend stocks to buy now.

Realty Income (O)

Source: Shutterstock

I really like the long-term story of Realty Income (NYSE:O). The one complaint is obvious: The stock price continues to teeter between “reverse” and “neutral.”

It has been unable to sustain any meaningful upside rally, and I don’t just mean over the last year. Realty Income feels like one of the rare stocks that was unable to take out its pre-pandemic high. Despite a bull market that surged from the second quarter of 2020 until the very end of 2021, Realty Income failed to gain much upside traction.

That’s even as the share price was obliterated during the Covid-19 selloff.

Despite all the volatility, and the sluggish price appreciation, the company continues to dole out its dividend. Paid out monthly, Realty Income has now raised its dividend payout in 102 consecutive quarters. Forget annual raises. This company has raised its payout quarterly for more than 25 years.

Despite Covid, various selloffs, high rates, low rates and a financial crisis, the company has not skipped a beat. While it could be years before O stock takes out its all-time high, that simply gives investors time to accumulate the name and its 5% yield.

Federal Realty (FRT)

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Considered one of the most dependable, blue-chip REIT holdings, Federal Realty (NYSE:FRT) has built its legacy on dependability. The company has accumulated properties in some of the strongest markets with strong tenants.

In the words of Federal Realty, “We own, operate and develop award-winning retail environments and mixed-use neighborhoods in the nation’s most desirable markets.”

For years, the stock paid a small dividend yield, often paying out less than 3%. However, that’s not due to stinginess. Instead, it’s because the stock always traded with a rich premium. Now like Realty Income, this top-tier REIT stock has been under pressure.

In 2022, the company raised its dividend for the 55th straight year. That’s “the longest record of consecutive annual dividend increases in the REIT sector,” according to the company.

Now yielding 4.5%, shares do seem quite attractive at current prices. If commercial real estate and/or REITs in general come under pressure, FRT stock won’t be immune. However, for the long-term, Federal Realty and Realty Income are high-quality building blocks.

Johnson & Johnson (JNJ)

Source: Olga Kononok/Shutterstock

Last but certainly not least, we have Johnson & Johnson (NYSE:JNJ). Unlike the others on this list, JNJ stock doesn’t have as big of a dividend yield. Shares pay out a dividend yield of roughly 3% and even that yield is only a product of the stock’s prolonged correction.

Despite the positives, the share price declined in nine straight months, falling over 16% in that span. While not great for intermediate-term holders, it does give buyers a chance to establish a long position.

Over the years, JNJ has become a very dependable stock. While most stocks were rolling over to multi-month or multi-quarter lows in April 2022, Johnson & Johnson stock was hitting all-time highs.

Because of the company’s high-quality business, the stock has become a high-quality blue-chip holding. It’s also allowed the company to raise its dividend for 60 consecutive years. It’s in rare company being in the six-decade camp and in April, JNJ will look to go for 61 straight years.

On the date of publication, Bret Kenwell held a long position in JNJ. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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