In this article, we discuss 10 best July dividend stocks to buy. You can skip our detailed analysis of dividend capture strategy and performance of dividend stocks, and go directly to read 5 Best July Dividend Stocks To Buy.
The investment landscape is undergoing substantial shifts this year as investors explore different strategies to make the most of the market rebound. Last year, investors loaded up on high-dividend stocks to generate regular income. However, this preference for dividend stocks has now somehow fallen out of favor. Ned Davis Research’s data shows that non-dividend-paying stocks in the S&P 500 have gained approximately 18% in 2023, surpassing a roughly 4% increase seen by dividend-paying companies. The report also mentioned that around 400 companies in the index currently offer a dividend.
That said, Ned Davis Research has also highlighted that dividend stocks typically exhibit strong performance when entering an economic slowdown. Therefore, there is a significant possibility for investors to refocus their attention on dividend stocks in the second half of this year as well. With worries of a potential recession still present, defensive companies, known for their substantial dividends, might once again outperform. This is because consumers tend to prioritize essential expenses like utility bills, household goods, and medical costs over discretionary purchases during an economic downturn. Paul Baiocchi, a chief ETF strategist at SS&C ALPS Advisors, spoke with Wall Street Journal about the outlook of dividend stocks this year. He said:
“The bulk of your total return from your stock market portfolio has come from compounded dividends over time, much more so than the actual price appreciation of the stock market. We don’t think that the first six months of 2023 has necessarily altered that overall outlook for dividends going forward.”
Where the market has seen an increased interest in AI stocks, it also revealed that investors remain highly focused on generating income and achieving compounded growth. This emphasis was evident in the most recent quarter, as companies worldwide distributed a record-breaking amount of dividends. According to a report by Janus Henderson, during the first quarter of 2023, the largest 1,200 public companies globally distributed a total of $326.7 billion in dividends. This represents a 12% increase compared to the corresponding period in the previous year. The report also mentioned that the US accounted for nearly half of the corporate dividends distributed in Q1. The growth in dividends was primarily driven by the real estate, technology, and healthcare sectors. Some of the best dividend stocks that are grabbing investors’ attention include McDonald’s Corporation (NYSE:MCD), Chevron Corporation (NYSE:CVX), and Johnson & Johnson (NYSE:JNJ).
Apart from investing in dividend-growing companies to generate consistent income, investors also employ a dividend capture strategy. This strategy involves buying shares of a company just before the ex-dividend date, which is the last day to own the stock and still be eligible to receive the upcoming dividend payment. Once the dividend is paid, the investor sells the shares. To read about this method in detail, have a look at Dividend Capture Strategy Stocks To Buy.
10 Best July Dividend Stocks To Buy
Our Methodology:
For this list, we selected prominent dividend stocks that will trade ex-dividend in July 2023. Ex-dividend date indicates the cutoff day to buy a stock to receive its upcoming dividend payment. The list is ranked chronologically, with earlier dates appearing first and later dates following in order.
Mastercard Incorporated (NYSE:MA) is a New York-based financial services company that also offers payment processing services. On June 26, the company declared a quarterly dividend of $0.57 per share, which was in line with its previous dividend. In 2022, it stretched its dividend growth streak to 10 years, which makes it one of the best dividend stocks on our list. The stock's dividend yield on July 3 came in at 0.58%.
In the first quarter of 2023, Mastercard Incorporated (NYSE:MA) reported revenue of $5.7 billion, which showed a 9.6% growth from the same period last year. Its operating cash flow for the quarter came in at roughly $2 billion, up from $1.7 billion in the prior-year period. During the quarter, the company paid $545 million to shareholders in dividends.
Other popular dividend stocks include McDonald’s Corporation (NYSE:MCD), Chevron Corporation (NYSE:CVX), and Johnson & Johnson (NYSE:JNJ).
At the end of Q1 2023, 138 hedge funds tracked by Insider Monkey owned investments in Mastercard Incorporated (NYSE:MA), compared with 139 in the previous quarter. The stakes owned by these hedge funds have a collective value of over $14.22 billion.
Oakmark Funds mentioned Mastercard Incorporated (NYSE:MA) in its Q1 2023 investor letter. Here is what the firm has to say:
“A brief discussion of Mastercard Incorporated (NYSE:MA) is also appropriate given we have held this company for nearly 13 years. It’s the 13th-largest contributor to performance for the Fund in our nearly 24-year history, but the largest in total dollars and percentage terms at nearly 1760%. While a terrific company, there were better priced alternatives in the quarter, so we sold our position. Our history with Mastercard fits the adage that all good things must come to an end.”
AT&T Inc. (NYSE:T) is a Texas-based multinational telecommunications holding company that provides technology and media services. The company reported a strong cash position in the first quarter of 2023, with an operating cash flow of $6.7 billion and a free cash flow of $1 billion. It generated $30.1 billion in revenues in Q1, which showed a 1.4% growth from the same period last year.
AT&T Inc. (NYSE:T) declared a quarterly dividend of $0.2775 per share on June 29, which was consistent with its previous dividend. With a dividend yield of 6.95% as of July 3, it is one of the best dividend stocks on our list. T will be trading ex-dividend on July 7.
As of the close of Q1 2023, 58 hedge funds in Insider Monkey’s database owned stakes in AT&T Inc. (NYSE:T), up from 55 in the previous quarter. Their collective stake value is over $2.3 billion. With roughly 33 million shares, Citadel Investment Group was the company's leading stakeholder in Q1.
General Mills, Inc. (NYSE:GIS) is an American multinational food processing company that specializes in the production and distribution of a wide range of food products. On June 28, the company announced a 9.3% hike in its quarterly dividend to $0.59 per share. This was the company's second consecutive year of dividend growth as it did not raise its payout in 2021 due to the pandemic. The stock has a dividend yield of 3.06%, as of July 3 and it will be going ex-dividend on July 7.
In fiscal Q4 2023, General Mills, Inc. (NYSE:GIS) reported revenue of $5.03 billion, up 3% from the same period last year. In FY23, the company generated $2.8 billion in operating cash flow. During the year, it also paid $1.3 billion to shareholders in dividends, which makes it one of the best dividend stocks on our list.
According to Insider Monkey's database for Q1 2023, 39 hedge funds owned stakes in General Mills, Inc. (NYSE:GIS), compared with 40 a quarter earlier. These stakes have a consolidated value of $787.4 million. Ray Dalio's Bridgewater Associates was the company's leading stakeholder in Q1.
McCormick & Company, Incorporated (NYSE:MKC) is an American food company that specializes in manufacturing, marketing, and distributing spices, seasoning mixes, condiments, and other flavoring products. The company recently announced its Q2 2023 earnings and reported revenue of $1.66 billion, which showed a 7.8% growth from the same period last year. Its operating cash flow for the quarter came in at $394 million, compared with $154 million in the second quarter of 2022.
McCormick & Company, Incorporated (NYSE:MKC), one of the best dividend stocks on our list, currently pays a quarterly dividend of $0.39 per share. It has been rewarding shareholders with growing dividends for the past 37 years. The stock has a dividend yield of 1.78%, as of July 3.
As of the close of Q1 2023, 27 hedge funds in Insider Monkey's database reported having stakes in McCormick & Company, Incorporated (NYSE:MKC), up from 25 in the previous quarter. These stakes have a consolidated value of over $1.62 billion.
Roper Technologies, Inc. (NYSE:ROP) is a diversified technology company that provides a wide range of products and services across various industries. The company operates through multiple segments and focuses on niche markets where it can provide specialized solutions.
On June 15, Roper Technologies, Inc. (NYSE:ROP) declared a quarterly dividend of $0.6825 per share, which was in line with its previous dividend. It is one of the best dividend stocks on our list as it has raised its payouts for 31 years running. Other dividend stocks that have raised their payouts for decades include McDonald’s Corporation (NYSE:MCD), Chevron Corporation (NYSE:CVX), and Johnson & Johnson (NYSE:JNJ).
In June, Jefferies raised its price target on Roper Technologies, Inc. (NYSE:ROP) to $535 with a Buy rating on the shares, highlighting the company's positive free cash flow and organic growth in the most recent quarter.
In the first quarter of 2023, Roper Technologies, Inc. (NYSE:ROP) generated $1.47 billion in revenues, which showed a 14.8% year-over-year growth. The company's operating cash flow for the quarter also grew by 5% to $465 million. Its free cash flow amounted to $445 million, growing from $428 million during the same period last year.
At the end of March 31, 42 hedge funds tracked by Insider Monkey owned stakes in Roper Technologies, Inc. (NYSE:ROP), up from 41 in the previous quarter. These stakes have a consolidated value of over $2.57 billion.
