As inflation takes hold, and interest rates rise, investors have many options to choose from. Growth stocks may be less-enticing in this environment, but bonds and other dividend stocks to buy certainly make a compelling case for investors in this market.
For those looking past fixed-income and alternative investments like real estate, dividend stocks have a lot to offer investors. Dividend-paying stocks that provide dependable income streams in times of economic stability are highly valued, for good reason. That’s because when it hits the fan, you want to own companies that can continue to return value to shareholders.
Of course, identifying companies that can do so is easier said than done. Long-term dividend stocks to buy can take many forms.
In this article, I’m going to highlight three of my top picks. Let’s dive in.
Devon Energy (DVN)
Devon Energy (NYSE:DVN) is an independent energy firm engaged in the exploration, development and production of oil, natural gas and gas liquids. The company’s predominant operations focus on the United States mainlands, comprising five distinct areas: the Delaware, Eagle Ford, Powder River, Anadarko and Williston.
Investors focus on Devon for two reasons. First, this is one of the best operators in terms of shale oil in the U.S., with impressive metrics to back up this view. Second, Devon has among the most attractive dividends of its peers.
Devon pays out a variable dividend, which increases and decreases along with the price of oil. Thus, over the past year, surging oil prices led to a massive special dividend for investors. The company’s trailing dividend yield of 10% speaks to this.
While many investors may consider such a yield to be unsustainable (and it probably is), oil is on the move higher again. This week’s news that OPEC+ isn’t playing nice with the U.S. has boosted DVN stock big time. I think this could be a bigger win for U.S. oil companies than anyone else (the consumer is about to feel the pinch at the pump again).
Oil prices will eventually find their equilibrium, which is probably lower than where prices are right now. Renewable energy is coming, and this is a sector that’s been highly cyclical.
That said, DVN stock is one of the top dividend stocks to buy right now, in my books.
Restaurant Brands (QSR)
Readers who follow my columns know how passionate I am about Restaurant Brands (NYSE:QSR). Much of this has to do with the fact that it’s one of the dividend stocks to buy for those seeking a modicum of defensiveness in this current market.
Various macro uncertainties remain high right now. There’s surging inflation, a banking crisis underway (that may not be completely over) and geopolitical conflict and tension everywhere. In this environment, it can be hard to invest in certain industries, for fear that consumer confidence (and spending) may dry up.
However, for companies like Restaurant Brands, parent company of Burger King, Tim Horton’s, Popeye’s and Firehouse Subs, any time is a good time to invest in this name.
If times are good, folks have more money to spend, and will choose to dine out more frequently. If a recession hits, then that casual fine dining restaurant gets replaced by the Burger King down the street, and Restaurant Brands takes more market share.
Thus, this company has a business model that’s more of a “heads I win, tails you lose,” from the perspective of the consumer. For investors, that should be music to the ears right now.
Currently, QSR stock pays a dividend yield of 3.3%, which is overlooked. The company’s growth prospects outshine its robust dividend, which has also consistently grown over the years. Over the long-term, this is one of the top dividend stocks to buy now.
Texas Instruments (TXN)
Texas Instruments (NASDAQ:TXN) is one of the dividend stocks to buy that I haven’t covered very often. There are reasons for this, but mainly, I don’t like the electronics manufacturing space overall.
That said, Texas Instruments is a complex beast, with a range of businesses, from semiconductors to electronics manufacturing. The global operator focuses on two main segments: Analog and Embedded Processing.
The Analog segment includes Power and Signal Chains, where the latter offers products that aid in managing electronic systems’ power.
Texas Instruments’ equity value has increased by 10% since the start of this year. That’s impressive, considering the fact that this isn’t a tech stock many would group into the “high-growth” category (those have done much better than the industrial names this year).
Texas Instruments is a company I’d put in the middle of a tech stock and an industrial stock. It’s hard to say how a company like Texas Instruments is supposed to perform in this market. In many respects, I’ve got a natural outlook on the stock from a growth standpoint.
That said, it’s the company’s dividend that’s intriguing to me. Currently, Texas Instruments pays out a yield of 2.7%. That’s nothing to write home about. But in the tech sector (if you can call this a tech stock), that’s a meaningful yield. For those seeking growth, TXN stock provides an option that pays a little additional yield, increasing long-term investors’ total return. That’s something worth considering.
On the date of publication, Chris MacDonald has a position in QSR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.