What is a Dividend?

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a company earns a profit or surplus, the board of directors may decide to reinvest some or all of the money in the business or pay it out to shareholders as a dividend. Next, dividends can be issued as cash payments, shares of stock, or other property.

Moving along, dividends are not deductible expenses for the corporation, but they may be taxable income for the shareholder, depending on the tax laws of the country in which the shareholder resides. Dividends are typically paid quarterly, but they may also be paid semi-annually or annually. Some companies even pay dividends monthly.

How To Find Good Dividend Stocks

Dividend stocks can be a great addition to any portfolio, providing a source of regular income as well as the potential for capital appreciation. However, not all dividend stocks are created equal. When searching for good dividend stocks, there are a few key factors to look for.

First, consider the company’s dividend history. A stock with a long history of consistent dividend payments is generally more reliable than one that has only recently begun paying dividends. Second, evaluate the company’s financial stability. A company with strong financials is less likely to cut its dividend in tough times. Finally, consider the company’s valuation.

Dividend stocks tend to be less volatile than growth stocks, but they can still fluctuate in price. As a result, it’s important to make sure you’re not paying too much for a stock that doesn’t offer much upside potential. By doing your homework and carefully evaluating each stock, you can help ensure that your portfolio is well-positioned for success. With that, let’s look at two top dividend stocks to check out in the stock market this week.

Dividend Stocks To Buy [Or Avoid] Now

AT&T (T Stock)

First, AT&T Inc. (T) is one of the largest telecommunications companies in the world. The company offers a wide range of products and services to consumers, businesses, and government agencies. AT&T’s product portfolio includes voice and data services, video and broadband Internet, managed networking, and cloud-based solutions.

T Recent Stock News

In October, AT&T announced a beat for its third-quarter 2022 financial results. In the report, the company announced earnings of $0.68 per share and revenue of $ 30.0 billion for the 3rd quarter of 2022. This was versus analysts’ consensus estimates for Q3 2022 which was an EPS of $0.61 and revenue of $29.8 billion.

What’s more, AT&T also said it expects fiscal year 2022 earnings of $2.50 per share or higher. Aside from that, the company currently has an annual dividend yield of 5.85%.

Additionally, John Stankey, AT&T CEO stated, “We’re investing at record levels to enhance our 5G and fiber connectivity and to deliver the best experience available in the market. Our results show our strategy is resonating with customers as we continue to see robust levels of postpaid phone net adds and approach 1 million AT&T Fiber net adds for the year.

T Stock Chart

In the past month of trading activity, AT&T stock has recovered by 13.32%. Meanwhile, T stock closed Friday’s trading session at $18.97 a share.

T stock chart
Source: TD Ameritrade TOS

[Read More] What Happens To Stocks During A Recession?

Pinnacle West Capital Corp (PNW Stock)

Next, Pinnacle West Capital Corporation (PNW) is an American electric utility holding company based in Phoenix, Arizona. It is the parent company of Arizona Public Service (APS), the largest electric utility in Arizona, and the largest subsidiary of Pinnacle West.

For a sense of scale, Arizona Public Service is a vertically integrated electric utility that serves 1.3 million customers across a 35,000-square-mile territory in central Arizona, including Phoenix. As of today, PNW currently offers its stockholders an annual dividend yield of 4.69%.

PNW Recent Stock News

Earlier in the month, Pinnacle West reported its third-quarter 2022 financial results. Diving in, the company reported 3rd quarter 2022 earnings of $2.88 per share, along with revenue of $1.5 billion. Meanwhile, Wall Street’s consensus earnings estimate was $2.62 per share with revenue estimates of $1.3 billion. In addition, the company reported a 12.4% increase in revenue during the same period, in 2021.

Furthermore, Pinnacle West Chairman, President, and CEO Jeff Guldner commented, “During the quarter, our employees continued to do what they do best: maintain reliable electric service for our 1.3 million customers despite monsoon storms that created damaging winds, heavy rains and flash flooding.

PNW Stock Chart

Looking at the last month of trading, shares of PNW stock have bounced 17.69%. While on Friday, Pinnacle West stock closed up 1.98% and is set to open this week’s trading action at approximately $73.73 a share.

PNW stock
Source: TD Ameritrade TOS

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