Top Dividend Stocks (Market Close, May 15, 2023)

When we find a top dividend stock, it meets the following five criteria.
​1.  US-listed stocks
2.  Traded every day, passed data validation
3.  Profitable, net income > 0
4.  Efficiency (risk-adjusted expected return) > diversified index
5.  Dividends paid > S&P 500 Index ETF which paid 1.63% last year

Item 4 is based on our Chicago Quantum Net Score for each individual stock.  This is a proprietary algorithm that compares risk-adjusted expected returns.

Our list of dividend paying stocks which have risk-return profiles better than the S&P 500 is limited.  Do your due diligence, learn their stories, and decide where you will invest. 

The top dividend stock identified by our CQNS Long model is:

No top dividend stocks were identified.

Here are some pretty good dividend yielding stocks. Dividend amounts were paid last year vs. average of the stock price (an effective historical dividend yield)

• PNM PNM Resources 3.0% yield
• CEQPp  Crestwood Equity Partners LP 12.2% yield
• KO Coca-Cola Co 2.9% yield
• ADP Automatic Data Processing Inc. 2.0% yield
• HON Honeywell International Inc. 2.6% yield
• PEP PepsiCo Inc. 2.7% yield
• MCD McDonald's Corp 2.2% yield
• ITW Illinois Tool Works 2.4% yield
• JNJ Johnson & Johnson 2.7% yield
• PAYX Paychex Inc. 2.7% yield
• MDLZ Mondelez International Inc. 2.4% yield
• KMB Kimberly-Clark Corp 3.6% yield

​​
​We excluded Canadian financial services and utilities stocks from our top dividend list today.

Some stocks pay a consistent dividend that is a sustainable percentage of profits and free cash flow (e.g., 20% to 50%).  As the company grows profits and cash flow, it can afford to grow dividends. This works in reverse.  When a company becomes less profitable, it feels pressure to shrink or eliminate its dividend. We see evidence of this in our Chicago Quantum Net Score analysis of US-listed stocks.

There are a significant number of companies that paid 7% or more in actual dividend yield over the past year. All of them are listed below (for US-listed stocks that pass our data validation process). Only a few 'money losing' companies pay a 7% or higher dividend, and that number keeps shrinking. We notice high-yielding stocks from 2022 cutting or eliminating their dividends. Buyer beware with dividend stocks. If the dividend is not sustainable in your opinion, and the company cuts the dividend, the stock may be sold off aggressively buy investors and portfolio managers that prefer dividend yielding stocks.

There are exceptions to the 'sustainable dividend' story above. Some companies pay a one-time dividend to return cash to shareholders. This could be due to a windfall profit (e.g., winning a lawsuit), or restructuring their business (e.g., sell or spin-out a business).
​
​Below is a list of listed US common stocks based on their actual payout / average share price over the past year.  This is an actual, historical dividend yield for an owner of the stock every day for the past year.  This is not a forward-looking dividend yield.

These are the top dividend paying stocks over the past year for companies. A value of 1.10 means the company paid 10% of their average closing price in dividends in the past 253 trading days.

Stocks that paid 7% or more in dividends last year (vs. actual average stock price)
CBIO   3.59 Catalyst Biosciences Inc                          
VHC    2.03 Virnetx Holding Corp                              
ZIM    0.83 Zim Integrated Shipping Services Ltd              
PFSW   0.77 PFSWEB Inc                                        
UAN    0.42 CVR Partners LP                                   
LPG    0.40 Dorian LPG Ltd                                    
ICL    0.39 ICL Group Ltd                                     
ACI    0.36 Albertsons Companies Inc                          
DSX    0.28 Diana Shipping Inc                                
SBLK   0.25 Star Bulk Carriers Corp                           
EQC    0.25 Equity Commonwealth                               
ARR    0.23 ARMOUR Residential REIT Inc                       
IVR    0.21 Invesco Mortgage Capital Inc                      
TRMD   0.21 Torm Plc                                          
CHMI   0.19 Cherry Hill Mortgage Investment Corporation       
CHRD   0.19 Chord Energy Corp                                 
GOGL   0.18 Golden Ocean Group Limited                        
GNK    0.17 Genco Shipping & Trading Limited                  
IEP    0.17 Icahn Enterprises L P                             
AJX    0.16 Great Ajax Corp                                   
MFA    0.16 MFA Financial Inc                                 
SPOK   0.16 Spok Holdings Inc                                 
AFCG   0.16 AFC Gamma Inc                                     
LOCO   0.16 El Pollo Loco Holdings Inc                        
CIM    0.15 Chimera Investment Corp                           
KRP    0.15 Kimbell Royalty Partners LP                       
CVI    0.15 CVR Energy Inc                                    
DMLP   0.15 Dorchester Minerals LP                            
BSM    0.15 Black Stone Minerals L.P.                         
RC     0.15 Ready Capital Corp                                
ORC    0.15 Orchid Island Capital Inc                         
GFF    0.15 Griffon Corp.                                     
AGNC   0.15 AGNC Investment Corp                              
SACH   0.15 Sachem Capital Corp                               
EFC    0.14 Ellington Financial Inc                           
EARN   0.14 Ellington Residential Mortgage REIT               
ARI    0.14 Apollo Commercial Real Estate Finance Inc         
RGR    0.14 Sturm  Ruger & Co.  Inc.                          
RTL    0.14 Necessity Retail REIT Inc (The)                   
CBL    0.13 CBL& Associates Properties  Inc.                  
EGLE   0.13 Eagle Bulk Shipping Inc                           
GNL    0.13 Global Net Lease Inc                              
AFG    0.13 American Financial Group Inc                      
NLY    0.13 Annaly Capital Management Inc                     
MFIC   0.12 MidCap Financial Investment Corporation           
AMBP   0.12 Ardagh Metal Packaging S.A.                       
BRMK   0.12 Broadmark Realty Capital Inc                      
CTO    0.12 CTO Realty Growth Inc                             
SBRA   0.12 Sabra Healthcare REIT Inc                         
PKE    0.12 Park Aerospace Corp                               
DX     0.12 Dynex Capital  Inc.                               
RITM   0.12 Rithm Capital Corporation                         
BRSP   0.12 BrightSpire Capital Inc                           
USAC   0.12 USA Compression Partners LP                       
ARLP   0.12 Alliance Resource Partners  LP                    
OMF    0.11 OneMain Holdings Inc                              
NS     0.11 Nustar Energy L P                                 
CAPL   0.11 CrossAmerica Partners LP                          
CEQP   0.10 Crestwood Equity Partners LP                      
CWH    0.10 Camping World Holdings Inc                        
CFFN   0.10 Capitol Federal Financial                         
DEA    0.10 Easterly Government Properties Inc                
UWMC   0.10 UWM Holdings Corporation                          
RWAY   0.10 Runway Growth Finance Corp                        
CALM   0.10 Cal-Maine Foods  Inc.                             
RILY   0.10 B. Riley Financial Inc                            
BLX    0.10 Banco Latinoamericano De Comercio Exterior SA     
TWO    0.10 Two Harbors Investment Corp                       
NFE    0.10 New Fortress Energy Inc                           
ET     0.10 Energy Transfer LP                                
FTAI   0.10 FTAI Aviation Ltd                                 
BGFV   0.10 Big 5 Sporting Goods Corp                         
STLA   0.10 Stellantis N.V                                    
CEQPp  0.10 Crestwood Equity Partners LP                      
SIGA   0.10 SIGA Technologies Inc                             
MPLX   0.10 MPLX LP                                           
SFL    0.10 SFL Corporation Ltd                               
OHI    0.10 Omega Healthcare Investors  Inc.                  
KNOP   0.10 KNOT Offshore Partners LP                         
SLG    0.09 SL Green Realty Corp.                             
ACRE   0.09 Ares Commercial Real Estate Corp                  
KNTK   0.09 Kinetik Holdings Inc                              
HPP    0.09 Hudson Pacific Properties Inc                     
CEIX   0.09 Consol Energy Inc                                 
AM     0.09 Antero Midstream Corp                             
ENB    0.09 Enbridge Inc                                      
LADR   0.09 Ladder Capital Corp                               
NCMI   0.09 National Cinemedia Inc                            
GLP    0.09 Global Partners LP                                
UNIT   0.09 Uniti Group Inc                                   
EVA    0.09 Enviva Inc                                        
ETRN   0.09 Equitrans Midstream Corporation                   
NTB    0.09 Bank of N T Butterfield & Son Ltd.                
FRG    0.09 Franchise Group Inc                               
CNQ    0.09 Canadian Natural Resources Ltd.                   
GOOD   0.09 Gladstone Commercial Corp                         
GMRE   0.09 Global Medical REIT Inc                           
PAA    0.09 Plains All American Pipeline LP                   
SPH    0.09 Suburban Propane Partners LP                      
TFSL   0.09 TFS Financial Corporation                         
MMP    0.08 Magellan Midstream Partners L.P.                  
MO     0.08 Altria Group Inc.                                 
CIO    0.08 City Office REIT Inc                              
NAT    0.08 Nordic American Tankers Ltd                       
EIG    0.08 Employers Holdings Inc                            
GSL    0.08 Global Ship Lease Inc                             
SUN    0.08 Sunoco LP                                         
HEP    0.08 Holly Energy Partners L.P.                        
HESM   0.08 Hess Midstream LP                                 
BITO   0.08 ProShares Bitcoin Strategy ETF                    
FLNG   0.08 Flex Lng Ltd                                      
JHG    0.08 Janus Henderson Group plc                         
EPR    0.08 EPR Properties                                    
BBW    0.08 Build A Bear Workshop Inc                         
BGS    0.08 B&G Foods  Inc                                    
BNS    0.08 Bank Of Nova Scotia                               
EPD    0.08 Enterprise Products Partners L P                  
OLP    0.08 One Liberty Properties  Inc.                      
MFC    0.08 Manulife Financial Corp.                          
NYCB   0.08 New York Community Bancorp Inc.                   
SCCO   0.08 Southern Copper Corporation                       
IIPR   0.08 Innovative Industrial Properties Inc              
EOG    0.08 EOG Resources  Inc.                               
MC     0.08 Moelis & Co                                       
CM     0.08 Canadian Imperial Bank Of Commerce                
FRO    0.08 Frontline Plc                                     
MCRI   0.08 Monarch Casino & Resort  Inc.                     
PSA    0.07 Public Storage                                    
WES    0.07 Western Midstream Partners LP                     
LUMN   0.07 Lumen Technologies Inc                            
AB     0.07 AllianceBernstein Holding Lp                      
VGR    0.07 Vector Group Ltd                                  
MSBI   0.07 Midland States Bancorp Inc                        
MATV   0.07 Mativ Holdings Inc                                
HCC    0.07 Warrior Met Coal Inc                              
BCE    0.07 BCE Inc                                           
BRDG   0.07 Bridge Investment Group Holdings Inc              
ARC    0.07 ARC Document Solutions Inc                        
VNOM   0.07 Viper Energy Partners LP                          
OUT    0.07 Outfront Media Inc                                
HIW    0.07 Highwoods Properties  Inc.                        
AROC   0.07 Archrock Inc                                      
KSS    0.07 Kohl`s Corp.                                      
EPM    0.07 Evolution Petroleum Corporation                   
PBA    0.07 Pembina Pipeline Corporation                      
APAM   0.07 Artisan Partners Asset Management Inc             
BIG    0.07 Big Lots Inc                                      
WU     0.07 Western Union Company                             
CATO   0.07 Cato Corp.                                        
SRC    0.07 Spirit Realty Capital Inc                         
MOV    0.07 Movado Group  Inc.                                
JXN    0.07 Jackson Financial Inc                             
AIRS   0.07 Airsculpt Technologies Inc                        
INSW   0.07 International Seaways Inc                         
PANL   0.07 Pangaea Logistics Solutions Ltd                   
SPG    0.07 Simon Property Group  Inc.                        
TU     0.07 Telus Corp.                                       
NHI    0.07 National Health Investors  Inc.                   
XRX    0.07 Xerox Holdings Corp                               
AQN    0.07 Algonquin Power & Utilities Corp                  
BRKL   0.07 Brookline Bancorp  Inc.
​TU     0.07 Telus Corp.                                       

Past dividends is not a guarantee of future dividends
You should not assume that a company will continue to pay dividends, nor pay them at the same rate.  The decision to pay a dividend, and the amount paid, is based on earnings and availability of suitable investments available to the company.  Companies change their dividend policies & dividend amounts frequently. 

Money losing companies that pay dividends
You may also notice that a few companies are not profitable, but paid significant dividends over the past year. There are three simple cases that we think about:
1. The company was, but is no longer profitable
2. The company is designed to pay dividends based on operating cash flows (e.g., REITS or MLPs) but have 'non-cash' expenses like depreciation or amortization to cause an accounting loss.
3. The company paid a small dividend percentage, but then the stock price declined.

How we calculate dividends
We use a novel method to compare stock dividend payouts. It divides the actual dividends paid by the average closing share price. This is an actual, historical dividend yield for an owner of the stock every day for the past year.  This is not a forward-looking dividend yield, which is what you typically see.  We use it in our platform.

Dividend payout: (1 + dividend %)
A. 1.15 = 15% payout
B. 1.00 = no dividend
C. 1.012 = 1.2% dividend yield (e.g., stock ABC paid $1.20 last year, and had an average close price of $100)

Do your due diligence, learn their stories, and decide where you will invest.  Each of these stocks has a story.
​

Dividend stocks tend to decline when interest rates rise
​We were attracted to a particular dividend stock. It pays a high dividend, generates significant free cash flow, and is a consistent performer. This stock fell almost in lock-step with the rise of interest rates. This is because high dividend stocks can often look like a bond but with equity risk. 

Why invest in dividend-paying stocks?
The simple answer is it reduces your risk. Each year a portion of your investment is returned.

Why avoid dividend-paying stocks?
On the other hand, dividends are taxed twice, once as the company generates the profit to pay them, and twice as you receive the dividend. In most situations, dividends are taxed higher than capital gains, so there is almost a 'triple tax' on dividends.

As an example of double taxation from dividends, a dollar earned by a company yields $0.70 after corporate taxes.  They pay the $0.70 to shareholders who then pay Federal and State taxes of 40% on that income, yielding a final amount of $0.42 (out of the original dollar), or a tax of 58%. 

Can you avoid double taxation on dividends?
Case 1: Invest in companies that reinvest earnings into growth (e.g., Amazon's strategy) so no tax would be paid and the company is expected to grow future earnings more quickly.  In that case, no current tax is paid.

Case 2: Invest in companies that use free cash flow to increase per-share, shareholder equity. In this case, the company earns income, pays corporate taxes of $0.30, and uses the $0.70 (after taxes) to buy back shares of stock or pay down debt. The investor, in theory, could defer their share of taxes indefinitely by not selling their shares, or sells them after a year and pays lower capital gains taxes as low as 15%.  In this case, the tax paid in the current year is $0.30 or $0.405 if the stocks were sold after one year.

Here is a recent video on our top dividend stock service.