VZ - The 7 Best Dividend Stocks to Buy for Your Grandkids

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Markets have been wildly volatile. Since August the Dow Jones Industrial Average is down about 15%. All thanks to sky-high inflation, lower consumer spending, Russia, North Korea and concerns the Federal Reserve could push us into a severe recession. It’s why I’m recommending some of the best dividend stocks to buy.

Even corporate America is warnings of slowdowns. FedEx (NYSE:FDX) for example just lowered its outlook after an ugly quarter. CarMax (NYSE:KMX) just warned that affording vehicles has become a challenge for consumers.

However, don’t let that chase you from the markets. Even with the chaos, there’s still plenty of opportunity, especially in dividend stocks.

After all, according to The Wall Street Journal’s Lori Ioannou, “Dividend stocks have become the new darling on Wall Street, and investors looking for income are pouring billions of dollars into them. These securities are considered a good buffer during times of market volatility.”

Here’s a list of the best dividend stocks to consider right now.

VZVerizon$36.72IIPRInnovative Industrial Properties$93.49PSXPhillips 66$91.07MOAltria Group$43.30OHIOmega Healthcare$29.40STAGStag Industrial$27.06EPDEnterprise Products Partners$24.47

Verizon (VZ)

One of the best dividend stocks to consider is Verizon (NYSE:VZ).

Granted, for most of 2022, the VZ stock was crushed. In fact, since January  VZ stock fell from about $52 to $36.05 a share after the telecom reported earnings misses and lowered guidance for the year.

However, don’t count the stock out just yet. It appears most of the negativity has been priced in. Verizon now carries a respectable yield of about 7.08% after increasing its dividend for the 16th consecutive year.

Analysts still love the stock. Oppenheimer analyst Timothy Horan, for example, just upgraded the stock to an outperform rating, with a price target of $50 a share.

“The price is right after years of underperformance,” Horan said, as quoted by Barron’s. “We previously downgraded in 2/25/21, because the company overpaid for spectrum and [was] late to mid-band 5G builds, which led to customer defections, weaker balance sheet, and substantial capex investment. These factors are now reversing.”

Innovative Industrial Properties (IIPR)

With a dividend yield of 7.9%, Innovative Industrial Properties (NYSE:IIPR) is a real estate investment trust (REIT) focused on the acquisition, ownership and management of properties leased to cannabis facilities. It’s another one of the best dividend stocks to buy.

You may not find many grandparents investing in cannabis for their grandkids. But this one may be difficult to pass up, especially with that yield.

According to Allied Market Research, the cannabis market could grow at a CAGR of about 20% over the next 10 years to reach about $149 billion. Four, President Biden just asked to review how cannabis is classified under federal law.

That’s all great news for IIPR. Better, earnings appear to be solid. For example, the REIT generated total revenues of about $70.5 million in the quarter, a 44% jump year over year.

Phillips 66 (PSX)

Phillips 66 (NYSE:PSX) just announced a dividend of 97 cents a share, which gives it a yield of 4.19%. It’s payable on Dec. 1 to shareholders on record as of Nov. 17. It’s also likely to benefit from bigger runs in oil prices, especially after OPEC+ reduced production by two million barrels. Helping, Piper Sandler just raised its price target on PSX to $116 from $113 a share.

Better, the company has been crushing earnings. In July, for example, it reported second quarter earnings of $3.2 billion, as compared to the $582 million posted in the first quarter. It generated $1.8 billion worth of operating cash flow, repaid $1.5 billion of debt, and restarted its share buyback program.

Altria Group (MO)

Altria Group (NYSE:MO) carries a dividend yield of 8.78%.

The company recently increased its regular dividend to 94 cents from 90 cents. That gives us an annual dividend rate of $3.76 at the moment.

Earnings have also been strong. In its second quarter, Altria posted adjusted EPS of $1.26 on revenue of $6.54 billion.

Analysts were looking for EPS of $1.25 on $5.41 billion revenue. The company also reaffirmed its outlook. For the full-year Altria expects to posted adjusted EPS of $4.79 to $4.93, or 4% to 7% growth over 2021 numbers.

Omega Healthcare (OHI)

With a dividend yield of 9.11%, Omega Healthcare (NYSE:OHI) is a long-term healthcare REIT, which owns about 943 assisted living and skilled nursing facilities in the U.S. and abroad.

Also, most of its properties are considered triple net lease, where the tenants pay rent, utilities and other property expenses including insurance, maintenance and taxes.

According to Omega Healthcare CEO Taylor Pickett, occupancy issues are showing signs of improvement, suggesting the long-term for OHI operators remains solid.

Plus, even after all of the market chaos, especially with COVID-19, the REIT isn’t likely to cut its dividend, unless it sees substantial changes in its future.

Stag Industrial (STAG)

With a dividend yield of 5.33%, Stag Industrial is another red-hot REIT that invests in industrial properties throughout the U.S. It’s also benefiting from e-commerce growth, with about 40% of its portfolio handling e-commerce fulfillment. That includes Amazon (NASDAQ:AMZN).

With e-commerce only set to grow, STAG is in a good position to profit. After all, according to eMarketer, online retail sales could hit $6.17 trillion by 2023.

Enterprise Products Partners (EPD)

With a dividend yield of 7.63%, Enterprise Products Partners (NYSE:EPD) is involved with oil and gas. While that may not sound like a safe investment in a downturn, we have to consider that EPD is a midstream operator.

That means it works off of fixed fees or volume-based contracts to generate its predictable cash flow. EPD also just declared a dividend of $0.475, or $1.90, annualized, payable Nov. 14 to shareholders, as of Oct. 31.

Better, earnings have been solid for EPD. Second quarter net income jumped to $1.4 billion, or 64 cents per share from $1.1 billion, or 50 cents a share year over year.

Distributable cash flow was up 30% to $2 billion, as compared to $1.6 billion for the second quarter of 2021. Adjusted cash flow was $2.1 billion, as compared to $1.7 billion for the second quarter of 2021.

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

More From InvestorPlace

• Buy This $5 Stock BEFORE This Apple Project Goes Live
• The Best $1 Investment You Can Make Today
• Early Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air”
• It doesn’t matter if you have $500 or $5 million. Do this now.

The post The 7 Best Dividend Stocks to Buy for Your Grandkids appeared first on InvestorPlace.