Dividend stocks represent companies that share a portion of their profits with their shareholders in the form of payouts. This is commonly known as dividends. When a company is doing well and generating surplus profits, it might decide to distribute some of these earnings to its shareholders. These payouts can be received as cash or additional shares. For many investors, especially those looking for income in addition to stock appreciation, dividends are a sought-after feature.
Investing in dividend stocks can have several benefits. Firstly, they provide a regular income stream, which can be particularly appealing to retirees or those seeking steady cash flow. This predictable income can be a buffer during market downturns, making them a stabilizing factor in an investment portfolio. Furthermore, dividends are often a sign of a company’s financial health; consistent dividend payouts indicate that the company is generating steady profits.
However, there are also potential drawbacks to consider. Companies that pay out dividends might reinvest less in their own growth, potentially leading to slower stock appreciation. There’s also the risk that a company might reduce or even eliminate its dividend in tough financial times, affecting the expected income for investors. So, while dividend stocks can be a valuable part of an investment strategy, it’s essential to balance the benefits against potential challenges. That said, here are two high-quality dividend stocks to watch in the stock market today.
High-Quality Dividend Stocks To Buy [Or Sell] Now
McDonald’s Corporation (MCD Stock)
First up, McDonald’s Corporation (MCD) is a global leader in the fast-food industry, operating and franchising a vast network of restaurants in numerous countries. Renowned for its iconic Golden Arches, the company offers a diverse menu of items, including its signature Big Mac. As of today, MCD offers its shareholders an annual dividend yield of 2.18%.
In late July, McDonald’s reported a beat for its second quarter 2023 financial results. Diving in, the company posted earnings per share of $3.17 along with revenue of $6.50 billion for Q2 2023. This is compared to analysts’ consensus estimates which were earnings per share of $2.77 on revenue estimates of $6.23 billion. Furthermore, revenue advanced by 13.62% compared to the same period, the prior year.
Year-to-date, shares of MCD stock are up 5.63% so far. Meanwhile, as of Friday’s closing bell, McDonald’s stock is trading at $279.22 a share.
UnitedHealth Group Inc. (UNH Stock)
Next, UnitedHealth Group Incorporated (UNH) is a diversified healthcare company, providing a broad spectrum of healthcare products and services. As one of the largest health insurance providers in the U.S., the company operates through two main segments. First, UnitedHealthcare, which offers insurance coverage and health benefits. Second, Optum, which delivers health services to help improve overall patient care. Today, UNH has an annual dividend yield of 1.56%.
In August, UnitedHealth Group announced that its board of directors had approved a cash dividend of $1.88 per share. This dividend is scheduled for payment on September 19, 2023, to shareholders who hold the company’s common stock as of the business close on September 11, 2023.
In 2023 so far, shares of UNH stock have fallen by 7.30% year-to-date. Moreover, as of Friday’s closing bell, UnitedHealth Group closed the trading day at $480.77 a share.