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Prepare to witness the power of compounding returns, learn how to mitigate risks, and discover the joy of reaping rewards from your investments.

Craving a steady stream of income alongside market growth? This guide serves as your compass, navigating the diverse landscape of dividend-paying stocks and uncovering the gems that align with your financial aspirations. Let's explore the best dividend stocks together.

1. Altria Group (MO)

Source : nasdaq

One of the best dividend stocks to buy is MO. It is known for being one of the largest and most established tobacco companies in the United States. MO boasts a 54-year streak of consecutive dividend increases, a testament to its commitment to rewarding shareholders.

Altria has a long history of paying dividends, making it attractive to income-oriented investors. However, the tobacco industry faces challenges, including regulatory changes and declining smoking rates.

2. AT&T's (T)

Source : nasdaq

If you are looking for income, AT&T's high dividend yield may be attractive. It has a long history of paying dividends, dating back to its founding in 1885. The company has increased its dividend payout for 39 consecutive years.

AT&T's current dividend payout ratio is 44.68%. This means that the company pays out 44.68 cents of its earnings per share as dividends. A payout ratio of less than 70% is generally considered sustainable.

3. B. Riley Financial, Inc. (RILY)

Source : nasdaq

B. Riley operates in various financial services segments, potentially offering some diversification compared to pure-play companies. The company is involved in investment banking activities, providing services such as mergers and acquisitions (M&A) advisory, capital raising, and restructuring.

The company has a decent track record of increasing its dividend, with a 5-year growth rate of 21.15%. Only investors with a high tolerance for risk and a solid understanding of the company's business should consider investing in RILY.

4. Portman Ridge Finance Corp (PTMN)

Source : nasdaq

Portman Ridge Finance Corp (PTMN) is a business development company that primarily focuses on investing in middle-market companies. PTMN operates in the debt financing sector, which can be relatively stable even during market downturns.

PTMN boasts a forward dividend yield of around 15%, significantly exceeding the average yield of the S&P 500. This means you can expect a substantial chunk of your investment back as regular income. Its dividend payout ratio is currently around 85.58%

5. Alliance Resource Partners, L.P. (ARLP)

Source : nasdaq

Looking for the highest dividend stocks for maximum profits? You can invest in ARLP. ARLP has a long history of paying regular dividends, dating back to 1997. It has also increased its dividend payout on several occasions over the years, demonstrating its commitment to rewarding shareholders.

ARLP is a master limited partnership (MLP) engaged in the production and marketing of coal primarily to utilities and industrial users. It operates underground mining complexes in the United States and focuses on providing high-quality coal products.

6. Exxon Mobil (XOM)

Source : nasdaq

XOM is one of the best stock with highest dividends in the energy sector. It is a major player in the global energy sector, involved in the exploration, production, refining, and marketing of oil and gas products. Its diverse operations across the energy value chain contribute to its stability, which is crucial for sustaining dividend payments.

Exxon Mobil has a long history of paying and increasing dividends. The company has demonstrated a commitment to returning value to shareholders through regular dividend payments, even during periods of economic uncertainty.

7. Ellington Financial Inc. (EFC)

Source : nasdaq

Searching for monthly dividend stocks? EFC boasts a current monthly yield of 10.1%, significantly exceeding the average market and offering substantial monthly income. This can be particularly attractive for retirees or investors seeking regular cash flow.

EFC has an established track record of declaring and paying monthly dividends, providing investors with predictable income streams. EFC invests in a diversified portfolio of income-generating assets across various sectors like real estate, finance, and energy. This diversification mitigates risk compared to companies reliant on a single industry.

8. Cohen & Company Inc. (COHN)

Source : nasdaq

The list of top dividend yield stocks includes COHN. It is a financial services company that operates in various segments, including investment management, capital markets, and principal investing.

COHN has maintained a quarterly dividend since 2016, showcasing its commitment to shareholder returns. Investing involves inherent risks, and COHN's high dividend yield comes with uncertainties. Conduct thorough research, consider your risk tolerance, and seek professional advice before making investment decisions.

9. Verizon Communications (VZ)

Source : nasdaq

Verizon operates in the telecommunications industry, providing wireless and wireline communication services. The demand for these services tends to be relatively stable, contributing to the company's resilience even during economic downturns.

VZ maintains a robust free cash flow, consistently exceeding $20 billion annually. This financial strength cushions dividend payments even during challenging economic times. Compared to its telecom peers, VZ appears attractively valued with a P/E ratio of 8.2.

10. Johnson & Johnson (JNJ)

Source : nasdaq

JNJ operates across three segments Pharmaceuticals, MedTech, and Consumer Health, providing stability and resilience against sector-specific challenges. The healthcare sector offers inherent defensive qualities, making JNJ a relatively safe haven during economic downturns.

Currently, at 44.8%, the payout ratio indicates plenty of room for future dividend increases without straining the company's finances. Consistent cash flow generation exceeding $20 billion annually fuels the continued growth of the dividend.

11. Monroe Capital Corporation (MRCC)

Source : nasdaq

MRCC operates in the relatively mature business of private credit, which may limit its overall growth potential compared to companies in higher-growth sectors. It boasts a solid track record of revenue and earnings growth, suggesting a sustainable source for funding future dividends.

With a P/E ratio of 7.8 compared to its financial services sector average of 14.4, MRCC appears undervalued, potentially indicating room for price appreciation alongside dividend income. MRCC's payout ratio exceeds 90%, meaning it distributes a significant portion of its earnings as dividends.

12. Sabine Royalty Trust (SBR)

Source : nasdaq

As a royalty trust, SBR's income is derived from oil and gas production, which tends to be less volatile than other sectors. This makes its dividend payments relatively stable and predictable. This income is then distributed to shareholders in the form of monthly or quarterly distributions.

Since SBR doesn't have any employees or significant operating costs, it can retain a larger portion of its revenue for distributions to unitholders.

13. Kinder Morgan Inc. (KMI)

Source : nasdaq

KMI boasts an extensive network of pipelines and terminals, giving it a strong competitive edge in the North American energy infrastructure market. This translates to reliable cash flow and stable earnings, crucial for sustained dividend payments.

While known for its stable core business, KMI is also pursuing strategic acquisitions and expansions in renewable energy projects. This demonstrates a commitment to diversifying its portfolio and adapting to future market trends, potentially mitigating long-term risk.

14. KeyCorp's (KEY)

Source : nasdaq

KeyCorp is a diversified financial services company, providing a range of banking and financial products and services. It operates in various segments, including Consumer Banking, Commercial Banking, Corporate Bank, and Investment Management.

KeyCorp's current payout ratio is 36%, meaning it pays out 36% of its earnings as dividends. This leaves room for future dividend increases without straining the company's finances. Consider checking what financial analysts and experts are saying about KeyCorp.

15. Ares Capital (ARCC)

Source : nasdaq

ARCC generates its dividends primarily from interest income on loans and debt investments. Analyzing the portfolio's diversification across industries and loan types can shed light on the stability of its income stream.

Looking at historical coverage ratios, like Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (AEBITDA) to dividend payout, can also assess the company's ability to comfortably sustain its dividend in different economic environments. Many Wall Street analysts recommend ARCC with buy ratings and positive outlooks, highlighting its strong fundamentals and attractive dividends.

16. Energy Transfer LP (ET)

Source : nasdaq

While not as consistent as ARCC's increasing dividend history, ET has maintained a stable or increasing dividend since 2014, demonstrating a commitment to shareholder returns.

ET operates a vast network of pipelines and processing facilities, playing a crucial role in North American energy infrastructure. This gives it stable cash flow and relative protection from economic downturns. The company has shown investments in renewable energy projects and potential for diversification, offering some upside beyond just dividends.

17. Hess Midstream LP (HESM)

Source : nasdaq

As a midstream energy company, HESM operates essential infrastructure for transporting and processing oil and natural gas, providing recurring revenue streams less susceptible to economic fluctuations.

Investing in an energy company implies exposure to potential environmental and regulatory risks associated with fossil fuels. The global energy demand is expected to remain strong in the long term, potentially benefiting HESM's revenue and dividend sustainability.

Source : nasdaq

NHTC has no outstanding debt, which strengthens its financial stability and potentially increases the reliability of its dividend payments. It smaller size and limited track record potentially expose investors to higher risks compared to the established BDC model of ARCC.

The natural health products industry is projected to experience significant growth in the coming years, which could translate into increased profitability for NHTC and potentially higher dividend payouts over time.

19. Healthpeak Properties Inc. (PEAK)

Source : nasdaq

PEAK boasts a Dividend Safety score of A+ from Dividend.com, indicating a high likelihood of sustaining or growing its dividend payments. This is supported by its stable earnings growth and manageable debt levels.

The company invests in senior housing communities and life science facilities, sectors with strong demand driven by aging demographics and healthcare advancements. This provides a certain level of resilience against economic downturns.

20. Walgreens Boots Alliance Inc. (WBA)

Source : nasdaq

Another one of the share with high dividend is WBA. With 47 consecutive years of dividend increases, WBA demonstrates a strong commitment to shareholder returns and dividend stability.

WBA has a strong brand presence with a vast network of stores across the globe. This provides them with economies of scale and bargaining power with suppliers, potentially leading to higher profitability. As a drugstore chain, WBA falls in the consumer staples sector, which tends to be more resilient during economic downturns. This can provide stability for your dividend income.