The stock market has had a blistering start to 2023, erasing some fears that prevailed during the 2022 bear market, when dividend stocks were very popular. But we’re not out of the woods quite yet, so investors should continue to keep an eye out for the best dividend stocks.
The increase in Treasury yields has made dividend stocks less attractive, since Treasuries are (generally) considered risk-free, and dividend stocks do pose considerable risk.
However, that doesn’t mean we should ignore excellent dividend stocks. Let’s look at a few dividend stocks to buy in the month of February.
Best Dividend Stocks for February: Johnson & Johnson (JNJ)
Johnson & Johnson (NYSE:JNJ) is the first dividend stock that I identified for this article. The company has already reported its fourth-quarter earnings, removing a short-term risk from the equation. Second, the stock just hit a multi-month low after JNJ lost a court battle.
While that’s not necessarily good news for investors, it is good news for those looking to initiate a bullish position in JNJ stock. A further decline in the stock, which has a dividend yield of 2.74%, would certainly make it even more attractive.
If the shares fall into the low-$150s, where JNJ does have some nice support, the stock’s dividend yield would be close to 3% But more importantly, consider the longevity of the company’s dividend.
JNJ has continuously paid and raised its annual dividend for 60 years. That’s a rare phenomenon and worth paying attention to. Plus, the shares trade at just 15.5 times this year’s earnings, and analysts, on average, expect the drug maker’s profits to climb 4% a year this year and in 2024.
Realty Income (O)
Like J&J, Realty Income (NYSE:O) has paid its dividend for an exceptionally long time.
The company has given its investors a monthly dividend for more than 52 years, and it has raised its payout for more than 25 consecutive years.
Let those numbers sink in because they truly stand out in the world of publicly traded companies. When it comes to paying and raising dividends for many years, O stock is exceptional. Plus it has a solid dividend yield of 4.4%.
At a time when the Federal Reserve is still raising interest rates, REIT stocks can seem like a risky choice. However, the economy continues to grow, avoiding a recession. Even if a recession does occur, investors can clearly depend on Realty Income and O stock.
Best Dividend Stocks for February: Walgreens (WBA)
For the last stock on this list of dividend stocks to buy, I was going to pick Chevron (NYSE:CVX). It has a 3.5% dividend yield and recently announced a $75 billion share buyback plan. However, I’m going to go with Walgreens (NASDAQ:WBA) instead.
WBA has an impressive 5.1% dividend yield and has raised its dividend for 47 consecutive years. Plus, I like Walgreens because it has a defensive, non-cyclical business.
While the economy is holding up pretty well, there’s no telling when a recession can occur. If a downturn does happen, I expect Walgreens to be pretty well-insulated from it.
Analysts’ average estimate does call for Walgreens’ earnings to drop in 2023. But at WAG’s current valuation, it’s hard to be too pessimistic about the stock. The shares trade at just over eight times this year’s earnings expectations. With a dividend yield north of 5%, WAG definitely seems like one of the best dividend stocks to consider.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.