The 3 Best Dividend Stocks for Beginner Investors

Stocks to buy

The stock market bloodbath of 2022 has left investors wondering whether they should choose safety over aggressive growth. While many investors are still sitting out and waiting for the market to recover, smart investors know that this is the time to bag solid, long-term stocks at a discount. The stock market has been off to a good start this year but the Federal Reserve still has a lot of work to do. With the concerns about rising interest rates, and looming recession, it is ideal to consider dividend stocks for your portfolio. In fact, I’ve included three of the best dividend stocks for beginners below.

KO Coca-Cola $60.12
JNJ Johnson & Johnson $160.39
MMM 3M $112.99

Coca-Cola (KO)

Source: Dmitry Lobanov/Shutterstock.com

Leading off this list of top dividend stocks for beginners is Coca-Cola (NYSE:KO). A favorite of Warren Buffett, the company has an impressive history and solid financials. It carries a dividend yield of 2.9% and it is dependable due to consistent earnings growth. KO stock is the one to own and hold forever. Better, Citi initiated coverage of the stock with a Buy rating and a price target of $68. Coca-Cola remains one of the best dividend stocks to own right now. 

With the addressable market for non-alcoholic drinks increasing with time, it is expected that the company’s business is only going to expand in the coming years. This is one company that has the potential to navigate through global economic challenges and despite inflation or the pandemic, it managed to post strong revenue growth. The biggest advantage of investing in Coca-Cola is its diverse range of products.

It posted revenue growth of 11% year-over-year and expects an organic revenue growth of 14% to 15% this year. In the quarter, the company saw a 7% net revenue growth and 11% for the full year. Even the organic revenue was 16% for the full year. Its EPS stood at $.47 and the company announced its 61st consecutive annual dividend increase and announced the quarterly of 46 cents per share which takes the annual dividend to $1.84 per share. 

Johnson & Johnson (JNJ)

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Next up on the list of top dividend stocks for beginners is Johnson & Johnson (NYSE:JNJ). A very popular name with a global presence, Johnson & Johnson sells medical devices, consumer packaged goods, and pharmaceuticals. The biggest advantage of investing in the company is its diversified product line which continues to perform, no matter the market condition. That said, the company offers products that will always remain in demand, no matter what is happening to the economy. JNJ stock is trading at $160 today and is down 9% year to date. However, it has had a good start to the year and hit $180 in Jan but has been declining since then after the company lost a court battle.

It reported fourth-quarter results last month and its profits and revenue were better than expectations. The company expects to report earnings per share ranging between $10.40 and $10.60 for this year. JNJ stock is a defensive play when the market is in turmoil and it is expected that the company will continue to grow business in the coming months. Its earnings lay out a bullish path for 2023, making JNJ stock an ideal addition to your portfolio. The stock has a dividend yield of 2.7% and a record of raising the dividend payout for the past 60 years. It recently announced a dividend of $1.13 for the quarter. 

3M (MMM)

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Another dividend stock to buy for a reliable income stream is 3M (NYSE:MMM). The company is a dividend aristocrat and could be a big winner in 2023. It is America’s largest manufacturing company and it makes several products including safety gear, cleaning supplies, and adhesives. 3M has struggled lately and lost significant value over the past year due to macroeconomic concerns and product liability lawsuits, however, the growing penetration of EVs could boost the company’s revenue in the long term. 

3M stock is trading at $112 today and is down from the 52-week high of $154. It is also down 20% over the past six months and this drop in value could be a great opportunity to grab the stock. I believe that the worst is over for the company and we could see the shares pick up very soon. No matter what, the dividends look safe and despite the number of legal issues, it did manage to raise the dividend this year which is proof that the management believes in rewarding investors. 

The company recently missed estimates in the fourth quarter earnings and there is a bearish forecast for this year. However, industries across the country will need cleaning supplies, safety equipment, and adhesives which means the demand for its products will pick up very soon. With a dividend yield of 5.3%, the stock is a huge part of the dividend investors’ portfolio. The company has raised dividends for 64 years in a row and it recently declared a dividend of $1.50. 

On the date of publication, Vandita Jadeja 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.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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