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3 Dividend Stocks You Can Buy Now

Prospect Capital  (NASDAQ: PSEC  ) , PennyMac Mortgage Investment Trust  (NYSE: PMT  ) , and Diebold  (NYSE: DBD  )  are three stocks dividend investors should love today.

When it comes to investing in dividends, there is no shortage of choices. In fact, a quick check shows that there are over 3,000 dividend-paying stocks on the major U.S. exchanges. Among all of those stocks, there are some companies that pay very high dividends and some that only pay out a small amount. Some pay quarterly, and some pay monthly. And finally, some companies focus on income while other companies' main focus is growth over time. With that in mind, here are three great dividend stocks in very different categories.

Income or growth?
In your portfolio, should you target income or growth? The short answer to that question is "both". The main goal of dividend investing should not be to simply create a good income stream, but to have that income grow over time.

Some companies are focused mainly on creating income, such as business development companies (BDCs) and mortgage REITs. Since these companies pay out most of their earnings, it makes sense that their dividends are higher than most. BDCs like Prospect Capital and mREITs like PennyMac Mortgage Investment Trust can create an excellent stream of income, which can be reinvested for growth, if desired.

Other companies like Diebold focus more on growing their business while providing a modest income stream to shareholders. The goal behind this is to grow the business over time, and the dividend will grow with it.

Is this the better dividend option?
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  • Report this Comment On July 26, 2014, at 5:34 PM, Mr1Sinatra wrote:

    great advice, which I foolishly took. shortly after this article was published, PSEC and PMT tanked. (I didn't go for the other). PSEC is finally back to where it was, but PMT languishes, and probably will continue to for some time.

    thumbs down.

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Matthew Frankel

Matt brought his love of teaching and investing to the Fool in order to help people invest better, after several years as a math teacher. Matt specializes in writing about the best opportunities in bank stocks, real estate, and personal finance, but loves any investment at the right price. Follow me on Twitter to keep up with all of the best financial coverage!

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Related Tickers

8/28/2015 4:07 PM
DBD $31.19 Up +0.27 +0.87%
Diebold CAPS Rating: ***
PMT $15.19 Down -0.19 -1.24%
PennyMac Mortgage… CAPS Rating: ****
PSEC $7.71 Up +0.21 +2.80%
Prospect Capital C… CAPS Rating: ****