Are you looking for mid-cap dividend stocks to buy?

According to S&P Dow Jones Indices, the S&P MidCap 400 Dividend Aristocrats Index is down 4.01% year-to-date (YTD) through May 12. That compares to a 1.5% gain for the S&P 500 Dividend Aristocrats Index and an 11.4% downturn for the S&P SmallCap 600 Low Volatility High Dividend Index.

It’s clear from the performance of these three indexes YTD that large-cap dividend stocks have been the big winner when it comes to dividend stocks in 2023. 

It makes sense when you think about it. Investors have been on edge about what will happen to the economy when interest rate hikes start to make a difference in the lives of individuals and businesses. 

However, over the long haul, mid-cap stocks, whether they pay dividends or not, tend to deliver reasonable returns for patient investors. 

According to Ben Carlson’s asset class periodic table for 2022 mid-cap stocks had the third-best 10-year performance out of eight asset classes. Interestingly, mid-cap stocks have never led the field over the past decade, although they have had two second-place and three third-place finishes. Consistency is the mid-cap stock’s calling card. 

Based on the companies in the S&P MidCap 400 Dividend Aristocrats Index, which you can buy through the ProShares S&P MidCap 400 Dividend Aristocrats ETF (BATS:REGL), here are three mid-cap dividend stocks to buy.

MSA Safety (MSA)

Of my three selections, MSA Safety (NYSE:MSA) is the mid-cap stock I’m least familiar with. It makes safety equipment for oil and gas, mining, fire service, construction, utility workers and other industries where equipment safety is a lifesaver. Its V-Gard hard hats are known and used globally. 

MSA Safety stock is the second-largest holding in REGL with a 2.22% weighting. MSA stock is down 1% YTD and yields 1.3%. 

The company reported Q1 2023 earnings on May 1st. Its net sales increased 20% year-over-year to $398 million. Excluding currency, revenue increased by 22%. On the bottom line, its adjusted earnings were $54 million, 44% higher than a year earlier.

It finished the first quarter with $837 million in long-term debt, which represents a reasonable 15% of its market capitalization. 

While I don’t think you could categorize its stock as cheap at 3.5x sales, I don’t think it’s expensive. Over the past 10 years, it has had an annualized total return of 12.24%, nearly 3x higher than its security and protection services peers. 

Lincoln Electric (LECO)

Lincoln Electric (NYSE:LECO) is REGL’s fifth-largest holding with a 2.16% weighting. The company’s Canadian headquarters were a short walk from where I lived in Toronto. It’s permanently etched in my brain as a result.

Lincoln Electric is top of mind if you’re a welder or know someone who is. It is one of the world’s leading manufacturers of arc-welding equipment. The Cleveland-based company has 71 manufacturing facilities in 20 countries with customers in more than 120 countries.

In 2022, its organic sales were 20% higher than a year before, to a record $3.8 billion. The company’s adjusted operating margin was also a record, up 200 basis points, to 16.8%.

It reported Q1 2023 results that included a 12.3% increase in revenue to $1.04 billion, while its adjusted income was $124.2 million, flat to a year ago. However, its earnings per share increased by 1.4% due to fewer shares outstanding.

Over the 12 months ended March 31, its adjusted return on invested capital, was a healthy 22.4%. Its long-term debt of $1.11 billion is just 11% of its market cap. 

Yielding 1.51%, you’ll get paid to wait for LECO stock to go on its next run as it did during the pandemic.

Williams-Sonoma (WSM)

Williams-Sonoma (NYSE:WSM) is the 39th-largest holding in REGL with a 1.95% weighting. It’s one of my favorite retail stocks and is due to go on a bit of a heater.

In November 2021, WSM traded for more than $215. It’s almost half that 18 months later. It’s currently trading where it did in January 2021. That puts it down 6% over the past year. Higher interest rates and inflation have persuaded investors it’s not the right play in this economic environment. 

But how bad is its business right now?

On March 16, it reported record revenues and earnings in fiscal year 2022. Its revenues for the year were $8.67 billion, 5.1% higher than in 2021.

“At Williams-Sonoma, Inc., we are proud that, despite the declining macro environment, we delivered another record year of revenue, with a comp of 6.5% on the top line and record earnings of $16.54 per share,” CEO Laura Alber stated in its Q4 2022 press release.

I’m a big believer in free cash flow generation. Companies that generate lots of it have capital allocation options in good times and bad. For example, while down overall it was down, WSM’s free cash flow in fiscal 2022 was still $698.7 million. 

That’s a free cash flow yield of 9.1%, and I consider anything above 8% to be a value play. I continue to like WSM, especially at current prices.  

On the date of publication, Will Ashworth 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.