If you’re an investor looking to build wealth through a regular income stream, dividends can be your best friend. But with so many options available, how do you find the best dividend stocks and what should be wary of?
There’s no definitive way to display the “best” dividend stocks, so we’re going to cover all the top dividend-paying stocks across a few different metrics and categories to help you find the right company.
In order to build our list of the top 10 dividend stocks for 2024, we’re exploring stocks from all over the globe. To create our list, we’ve used the top 10 constituents (by yield-driven weight) in the S&P Global Dividend Aristocrats index.
To make it onto the S&P Global Dividend Aristocrats index, each stock must have followed a policy of increasing (or stable) dividends for at least 10 consecutive years and be a high-yielding company within the S&P Global Broad Market Index (BMI). You can find more details about each stock below.
| Dividend stock | Sector | Stock Exchange | Dividend yield | Link |
|---|---|---|---|---|
| A2A SpA (A2A) | Utilities | Borsa Italiana (BIT) | 5.2% | InvestCapital at risk |
| Adecco (ADEN) | Industrials | SIX Swiss Exchange (SWX) | 6.7% | InvestCapital at risk |
| Lenovo (0992) | Information technology | Stock Exchange of Hong Kong (HKEX) | 4.6% | InvestCapital at risk |
| New World Development (0017) | Real Estate | The Stock Exchange of Hong Kong (HKEX) | 11.2% | InvestCapital at risk |
| Janus Henderson (JHG) | Financials | New York Stock Exchange (NYSE) | 5.8% | InvestCapital at risk |
| Great-West Lifeco (GWO) | Financials | Toronto Stock Exchange (TSX) | 5.2% | InvestCapital at risk |
| Sumitomo Forestry (1911) | Consumer discretionary | Tokyo Stock Exchange (TSE/TYO) | 3.1% | InvestCapital at risk |
| Legal & General (LGEN) | Financials | London Stock Exchange (LSE) | 8.3% | InvestCapital at risk |
| Bouygues (EN) | Industrials | Euronext Paris (EPA) | 5.6% | InvestCapital at risk |
| Toyo Seikan Group Holdings (5901) | Materials | Tokyo Stock Exchange (TSE/TYO) | 3.7% | InvestCapital at risk |
Because searching for the top dividend stocks is such a broad question, we’ve helped you narrow down your research by breaking down the best dividend-paying shares by category.
These trading apps allow you to invest in companies within teach index directly or to invest in funds/ETFs (exchange-traded funds).
Often overlooked, investment trusts can be a reliable way to earn dividend income. This is because their structure means up to 15% of profits can be withheld and then paid out another time for smoother dividends (something individual dividend stocks don’t do).
With an investment trust, you also get a diversified portfolio of holdings with a single investment and expert management. Below are the top dividend investment trusts from the AIC “dividend heroes” list, increasing dividends for over 20 years in a row.
When you’re looking at dividend stocks, you’ll notice that one of the most-highlighted metrics is the dividend yield. This is usually shown as a percentage and the basic calculation is:
Dividend amount (in pounds, pence or dollars, for example) divided by the current share price. One thing to watch out for is that a higher dividend yield may look attractive but this can sometimes happen because the underlying share price is falling.
When a situation like this takes hold of your investment, you could end up losing more money in the depreciation of the shares than you make with a higher percentage dividend yield.
Finding the best dividend stocks for your portfolio isn’t an easy task. When you start researching dividend-paying stocks that suit your style of investing, you’ll notice it’s pretty hard to narrow down your options.
Ideally, look for a strong past track record but also check the current financial health of a company or investment to ensure it can keep paying dividends. Regular income through dividend stocks is an excellent way to provide your portfolio with a level of stability, and help with compound growth. Keep in mind that dividends aren’t guaranteed and be wary of becoming greedy and chasing high dividend yields.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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