The 7 Best Dividend Stocks to Buy for Your Grandkids in 2023

Dec 5, 202221:51 UTC

If you’re looking for some of the best dividend stocks for grandkids, try these.

Over time, companies that pay dividends can help investors compound their returns. What makes these the best dividend stocks for grandkids is that, with a long enough timeline and reinvestment of dividends, even a small investment can pay off big over, say, 20 or 30 years.

Dividend stocks are a great buffer in times of chaos. That’s because companies that regularly pay out dividends are profitable and reliable, even with fears of recession. While they may not have the flash of growth stocks (and many of the best dividend stocks for grandkids are slow growers) many investors believe the stability is more valuable than huge short-term gains.

Moving into 2023, I expect dividend stocks to have another impressive year. In fact, here are seven of the best dividend stocks for grandkids you may want to consider.

AFCG	AFC Gamma	$17.15
ADC	Agree Realty	$70.52
KO	Coca-Cola	$63.47
ABBV	AbbVie	$163.94
WM	Waste Management	$167.79
MO	Altria Group	$47.19
KSS	Kohl’s	$29.49

AFC Gamma Inc. (AFCG)

With a yield of 13.2%, AFC Gamma (NASDAQ:AFCG) is red hot, especially with the new cannabis boom emerging. For one, as I noted on Nov. 21, the dividend appears stable. With legalization spreading among states and looking increasingly likely on the federal level, this stock has potential.

Earlier this year, President Biden asked federal officials to start a review process of how marijuana is “scheduled”, or classified, under federal law. Last week, he signed a marijuana research bill, which, according to Marijuana Moment, is the “first piece of standalone federal cannabis reform legislation in U.S. history.”

This takes us a step closer to federal legalization, and a potentially massive cannabis boom.

Agree Realty (ADC)

Agree Realty (NYSE:ADC) is a solid REIT, with a solid dividend. Much of this has to do with the company’s business model, which is aimed at acquiring and developing properties that are net leased to industry-leading omnichannel retail tenants.

All of the companies Agree Realty works with are reputable giants.

At the moment, this company has just under 36 million square feet of space it leases to those reliable investment-grade tenants. Better, as of September, the company acquired another 303 properties across 42 states for about $1.19 billion.

Coca-Cola (KO)

With strong demand, dependable dividends, and incredible earnings growth, Coca-Cola (NYSE:KO) may be one of the best dividend stocks to consider as a long-term investment.

Coca-Cola is also a dividend king, raising its dividend for the last 60+ years. This stock currently carries a yield of 2.74% and continues to be one of the safest stocks on the market.

In addition, in its most recent quarter, the company posted earnings per share of 69 cents on sales of $11.1 billion. That’s up from the 65 cents on sales of $10 billion during the same quarter last year. Analysts were looking for 64 cents on sales of $10.5 billion.

Even better, company director Herb Allen just paid $2 million for 33,200 shares of KO. Plus, Credit Suisse analyst Kaumil Gajrawala just reiterated an outperform rating on the stock, with a price target of $64 a share.

AbbVie (ABBV)

AbbVie (ABBV) had a strong 2022 so far. I expect 2023 to be just as strong, even with nearing patent expirations on its Humira drug. ABBV just increased its quarterly dividend to $1.48 a share from $1.41, or $5.92 annualized.

Sure, its $200 billion Humira drug lost protection in Europe and will face increased competition from biosimilars in 2023, but don’t write the stock off just yet.

The company had $22 billion in free cash flow in 2022, which will keep its 3.74% yield safe. In addition, ABBV trades at 13.8x forward earnings, as compared to 17.6x for the S&P 500.

Waste Management (WM)

Waste Management (NYSE:WM) may not sound exciting, but it provides an essential service to millions. No matter what happens with the economy, we still need companies to get rid of all our trash.

Plus, it pays out a healthy dividend of 1.58% at the moment. It also just declared a quarterly cash dividend of 65 cents, payable Dec. 16 to shareholders of record on Dec. 2.

Better, even with inflation, and fears of recession, the stock ran from a low of about $105 to nearly $170, leaving most other companies in the dust. All because it serves an essential service we can’t live without.

Earnings have been solid. Revenue for the third quarter came in at $5.08 billion, up 8.7% year over year. That also beat forecasts for $5.05 billion. Net income of $639 million, or diluted earnings of $1.54 a share was up about 19% year over year. It was also above estimates for $1.51 a share.

In addition, the company said it returned $808 million to shareholders in the quarter, including $267 million in dividends.

Altria Group (MO)

Altria Group (NYSE:MO) carries a yield of 7.89%. But that’s not the most impressive item of note for this top high-yielding dividend stock.

Over the last 53 years, the company has raised its dividend 57 times, which makes it another Dividend King on this list. In fact, as of August, the company raised its dividend for the 57th time to $3.76 per share annually.

Granted, sales of cigarettes are on the decline. However, vaping and e-cigarette use is on the rise. In fact, about one in 20 Americans now vape, with product sales expected to hit $40 billion by 2023.

This is a trend Altria can capitalize on, with the help of a partnership the company recently entered into with Japan Tobacco to develop smoke-free products. Notably, Morgan Stanley analyst Pamela Kaufman raised the firm’s target price on MO to $109 from $102, with an overweight rating.

Kohl’s (KSS)

Kohl’s (NYSE:KSS) is more than 40% down on the year. Still, with a yield of 6.39%, beaten-down shares of Kohl’s are attractive.

The stock was hammered for most of the year thanks to sky-high inflation, consumer cutbacks, poor earnings, slashed guidance, and supply chain issues. But don’t write the stock off just yet.

Most of these issues are only temporary, and the company may soon see a solid turnaround.

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.