Best Dividend Paying Stocks

Investors find that dividend paying stocks are a great way for building long term wealth. So we are always on the prowl for the best dividend paying stocks.

How They Work

With dividends, for every share owned, the investor receives a portion of the company’s earnings. The amount paid out is set by the company, usually every quarter. A company can choose to stop paying on these dividends or adjust the yield. The profit is paid out on a regular basis. When utilizing these financial instruments, the key to returns on investment is reinvestment.

This differs from a traditional share investment because in that case a shareholder buys and leaves the investment alone. The shareholder waits for the investment to grow with the option to sell the shares at their whim, hopefully at a profit.

Typically, companies pay out quarterly, while others may distribute profits annually or semi-annually. The best will have a long history of paying dividends so you can count on them continuing to do so.

Why Invest in Stocks With Dividends

Stable companies with solid yearly profits can be expected to offer the best dividend paying stocks. There are higher end dividends, referred to as aristocrats, which have been known to gradually increase their payouts, even during tough economic times. Overall, the investor is looking for companies that show solid returns year to year, ensuring a steady dividend payout. No one expects huge profits from these investments. It is understood this is a stable investment with stable returns, one that they will provide a stream of revenue without selling the stock.

Investors also like to take advantage of reinvestment plans. Dividend reinvestment plans let investors put their dividend payouts back into the stock. With a reinvestment plan, one can buy dividend stocks and have any payouts automatically used to buy more stocks in the company. This will be advantageous if the investor ever chooses to sell their stock. With a dividend reinvestment plan, they will have more shares to sell than they started with, but without having to have put more funds into purchasing stocks.


When looking for the best dividend paying stocks, seek out the ones that offer higher yields above 5% and steadily raise dividends. These payouts are not regulated. One company can choose to offer better payouts, making their dividends more appealing.

Dividend stocks reward investors for their risk in a company. The cash payout can be used to reinvest in the company or for a steady cash flow.