In this article, we discuss 10 best June dividend stocks to buy now. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Best June Dividend Stocks To Buy.
Apart from their significant contribution to the market’s overall returns, dividend stocks can also potentially be beneficial in an inflationary environment. In 2022, consistent interest rates hike jolted the market, which made investors seek solace in the dividend stocks with growth potential. The S&P 500 declined by over 18% last year, compared with a 6.21% drop in the S&P 500 Dividend Aristocrats, an index that tracks the performance of the S&P 500 companies with at least 25 years of consistent dividend growth.
The popularity of dividend stocks has varied over time based on market conditions and investor preferences. Investments in growth stocks surged in the early 2000s because investors were drawn to companies with high growth potential, even if they didn’t offer any dividends. However, with the onset of the Global Financial Crisis of 2008, dividend stocks witnessed a renewed interest. CNBC reported that the S&P 500 companies paid $207 billion to investors in dividends in 2010, showing a 5.6% growth from 2009. The amount has grown tremendously over the years, reaching its record high of $561 billion in 2022, as reported by S&P Dow Jones Indices.
The continuous growth in dividend payments throughout these years shows that investments in dividend-growth stocks can be a reliable option during different market conditions. These stocks can be a hedge against inflation and can also offer long-term capital appreciation potential. Various studies have highlighted that dividend growth has outpaced inflation historically. In 25 Things Every Dividend Investor Should Know, we cited BlackRock’s data, which revealed that dividends paid by US companies from 1971 to 2021 grew by 3.7% per year on average, compared with a 2% growth in inflation per year.
Analysts also advise investing in companies with strong dividend growth track records. Kristen Bitterly, head of North America for Citi Global Wealth, spoke with Bloomberg about the importance of dividend growers. She said that her firm prefers well-established companies that are less sensitive to changes in economic conditions. She further mentioned that dividend aristocrats have outperformed the market in 25 of the last 32 years. McDonald’s Corporation (NYSE:MCD), AbbVie Inc. (NYSE:ABBV), and Chevron Corporation (NYSE:CVX) are some of the best dividend stocks that have consistently rewarded shareholders with growing dividends.
In addition to investing in dividend growers to generate regular income, investors also follow a dividend capture strategy. The method involves buying dividend stocks just before their ex-dividend dates and selling shortly after. Through this, investors can capture dividend payments without necessarily holding the stock for the long term. To learn more about this, readers can have a look at Dividend Capture Strategy Stocks To Buy.
Best June Dividend Stocks To Buy
Photo by Karolina Grabowska from Pexels
Our Methodology:
For this list, we selected prominent dividend stocks that will trade ex-dividend in June 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.
The Allstate Corporation (NYSE:ALL) is an Illinois-based insurance company that specializes in supplemental insurance coverage. In the first quarter of 2023, the company reported revenues of $13.8 billion, which beat analysts' estimates by $110 million. Its net investment income for the quarter came in at $575 million. The stock will be trading ex-dividend on June 1.
On May 22, The Allstate Corporation (NYSE:ALL) declared a quarterly dividend of $0.89 per share, which was in line with its previous dividend. In 2023, the company stretched its dividend growth streak to 15 years, which makes it one of the best dividend stocks on our list. The stock has a dividend yield of 3.25%, as of May 27.
In addition to ALL, McDonald’s Corporation (NYSE:MCD), AbbVie Inc. (NYSE:ABBV), and Chevron Corporation (NYSE:CVX) are some other best dividend stocks to consider.
The Allstate Corporation (NYSE:ALL) attracted positive ratings from Street analysts after posting strong quarterly earnings. In May, BofA lifted its price target on the stock to $149 and kept a Buy rating on the shares.
The Allstate Corporation (NYSE:ALL) was a popular buy among hedge funds at the end of Q1 2023, as 49 hedge funds in Insider Monkey's database owned stakes in the company, up from 37 a quarter earlier. These stakes have a collective value of over $692 million.
“Elsewhere in financials, the stocks of two of our insurance holdings – AIG and The Allstate Corporation (NYSE:ALL) – came under pressure we believe due to the negative sentiment in the sector generally. These businesses are very different from banks, and we continue to have strong conviction in their ability to grow intrinsic value over the long term. In fact, Allstate is a new position that we added to the portfolio in Q1. It is one of the largest providers of auto and homeowners’ insurance in the United States. Allstate has a strong brand and significant scale advantages over smaller peers. Recent results have been pressured by rising claims costs across the industry; however, we believe that price changes instituted by the company will drive improvement to more normalized levels over the next couple of years.”
McDonald's Corporation (NYSE:MCD) is a multinational fast food chain that deals in a wide range of other menu items. Loop Capital reiterated its Buy rating on the stock in May with a $346 price target, noting the company's same-store sales growth over the past quarters. MCD is among the best dividend stocks on our list.
In the first quarter of 2023, McDonald's Corporation (NYSE:MCD) reported a 12.6% year-over-year growth in its global comparable sales. The company's revenue for the quarter amounted to roughly $6 billion, which showed a 4.10% growth from the same period last year. Its ex-dividend date is June 2.
McDonald's Corporation (NYSE:MCD) pays a quarterly dividend of $1.52 per share for a dividend yield of 2.13%, as recorded on May 27. The company has been growing its dividends for 46 years running.
At the end of Q1 2023, 64 hedge funds tracked by Insider Monkey reported having stakes in McDonald's Corporation (NYSE:MCD), up from 57 in the previous quarter. These stakes have a consolidated value of over $4 billion.
Brown-Forman Corporation (NYSE:BF-B) is next on our list of the best dividend stocks for June. The American distilleries company announced a $0.2055 per share in quarterly dividends on May 25. It has been making regular dividend payments to shareholders for the past 79 years while maintaining a 39-year streak of dividend growth. The stock has a dividend yield of 1.33%, as of May 27.
In fiscal Q3 2023, Brown-Forman Corporation (NYSE:BF-B) generated $1.08 billion in revenues, which saw a 3.8% growth from the prior-year period. The company's operating cash flow for the quarter stood at $410 million. BF-B will be going ex-dividend on June 7.
As of the close of Q1 2023, 29 hedge funds in Insider Monkey's database reported having stakes in Brown-Forman Corporation (NYSE:BF-B), worth over $1.5 billion collectively. With over 12.2 million shares, Fundsmith LLP was the company's leading stakeholder in Q1.
Altria Group, Inc. (NYSE:MO) is a Virginia-based company that specializes in the production of cigarettes, tobacco, and other related products. The company is among the best dividend stocks on our list because of it has remained committed to its shareholder obligation over the years. In the first quarter of 2023, the company returned $1.7 billion to shareholders in dividends.
Altria Group, Inc. (NYSE:MO) is a Dividend King with 53 years of consistent dividend growth. The company currently pays a quarterly dividend of $0.94 per share and has an above-average high dividend yield of 8.43%, as of May 27.
Stifel initiated its coverage on Altria Group, Inc. (NYSE:MO) with a Buy rating and a $52 price target. The firm acknowledged the company's earnings growth and investments in smoke-free developments.
At the end of March 2023, 49 hedge funds tracked by Insider Monkey owned positions in Altria Group, Inc. (NYSE:MO), up from 45 in the previous quarter. These stakes have a total value of over $1.13 billion.
Here is what Broyhill Asset Management said about Altria Group, Inc. (NYSE:MO) in its Q4 2022 investor letter.
“We rebalanced our tobacco exposure during the year, reducing our investment in Altria Group, Inc. (NYSE:MO) as the future of the company’s combustible cigarette business became increasingly questionable given pending US legislation and a lackluster portfolio of reduced risk products. We reinvested the proceeds in Philip Morris so that relative position sizing is more consistent with our increased conviction.”
Best Buy Co., Inc. (NYSE:BBY) is a Minnesota-based consumer electronics company. Truist kept its Buy rating on the stock in May with a $77 price target, following the company's recent quarterly earnings. DA Davidson also maintained its Buy rating on BBY this month.
On May 26, Best Buy Co., Inc. (NYSE:BBY) declared a quarterly dividend of $0.92 per share, which was consistent with its previous dividend. In March 2023, the company lifted its dividend for the tenth consecutive year. With a high dividend yield of 4.95%, BBY is one of the best dividend stocks on our list and it will be going ex-dividend on June 14.
Other best dividend stocks that are grabbing investors' attention include McDonald’s Corporation (NYSE:MCD), AbbVie Inc. (NYSE:ABBV), and Chevron Corporation (NYSE:CVX).
According to Insider Monkey's Q1 2023 database, 40 hedge funds owned investments in Best Buy Co., Inc. (NYSE:BBY), up from 33 in the previous quarter. These stakes are collectively worth over $491.4 million. AQR Capital Management was the company's largest stakeholder in Q1.
