3 Top Dividend Stocks to Buy and Hold in 2023

Three words can make you a lot of money over the long run. What are those three words? Dividends, buy, and hold. 

Dividends made up over half of the S&P 500's total return since 1990. Following a buy-and-hold strategy would have prevented you from locking in significant losses during the sell-offs of 2001, 2008, and 2020. And the approach can almost certainly do the same in the current market decline.

Combining those three words into your investing strategy by buying and holding dividend stocks can be especially rewarding for long-term investors. Here are three top dividend stocks to buy and hold in 2023.

1. AbbVie

AbbVie (ABBV -1.03%) isn't just an ordinary dividend stock; it's a member of dividend royalty. The drugmaker has increased its dividend for 50 consecutive years, making it both a Dividend Aristocrat and a Dividend King. AbbVie has raised its dividend payout by more than 250% since spinning off from Abbott Labs in 2013. Its dividend currently yields more than 3.8%.

This pharma stock is handily beating the overall market so far in 2022. Shareholders have especially profited with the juicy dividends included.  

But AbbVie loses U.S. exclusivity for Humira next year. The autoimmune-disease drug generated 36% of the company's total revenue in the first half of 2022. Can AbbVie keep its momentum going with Humira's sales soon to decline? I think so.

For one thing, the impact of Humira's loss of exclusivity is largely baked into AbbVie's share price. The stock trades at only 12 times expected earnings. More importantly, AbbVie's slump shouldn't last very long: The company projects that it will return to sustained revenue growth quickly.

I believe that AbbVie's optimism is warranted. The company already has two worthy successors to Humira on the market with Rinvoq and Skyrizi. Its lineup features other growth drivers as well, including Botox, Venclexta, and Vraylar. 

2. Brookfield Renewable

The best thing about Brookfield Renewable (BEP) (BEPC -0.09%) isn't its dividend. To be clear, though, the renewable energy company does offer an attractive dividend with a yield that tops 4.3%. Brookfield Renewable should have no problem keeping the dividends flowing.

However, the best thing about Brookfield Renewable is its growth prospects. Don't let the dismal performance of the stock so far this year fool you. 

The demand for renewable energy should increase significantly over the next decade and beyond. There's no way for countries across the world to achieve their carbon reduction goals otherwise. It also helps quite a bit that solar and onshore wind energy production is already more cost-effective than gas and coal energy production. 

Brookfield Renewable's future prospects are getting even brighter thanks to its investments. The company is acquiring Scout Clean Energy. It recently closed on the purchase of Standard Solar. Brookfield Renewable is also teaming up with Cameco to acquire nuclear power provider Westinghouse Electric.

3. Easterly Government Properties

Easterly Government Properties' (DEA) dividend yield stands at nearly 6.6%. While that's certainly an attractive level, I think an even bigger plus is the stability of the cash flow that funds the dividends. 

The company is organized as a real estate investment trust (REIT). Easterly focuses on leasing properties to U.S. federal agencies. As of June 30, 2022, 98% of the REIT's lease income is (in the company's own words) "backed by the full faith and credit of the U.S. government." 

That backing from Uncle Sam hasn't seemed to help Easterly's stock much this year. The company's shares have fallen close to 30%, primarily due to worries about rising interest rates and the overall economy.

But Easterly is in a strong financial position to weather the current storm. The overall market dynamics for the company should remain favorable over the long term. Investors who buy and hold this stock should enjoy solid total returns in the years to come.