No one knows for sure what the new year will bring for investors. However, it's a good bet that quite a few solid companies will continue paying dividends quarter after quarter.
Some of them could also have significant upside potential over the next 12 months. Here are 23 top dividend stocks to buy and hold in 2023.
Energy
Energy stocks led the S&P 500 in 2022 and could very well soar again in the new year. Many of them offer especially juicy dividends, to boot.
| Stock | Business Summary | Dividend Yield |
|---|---|---|
| 1. Brookfield Renewable Corporation (BEPC 1.56%) | Renewable energy provider | 4.6% |
| 2. Brookfield Renewable Partners (BEP 1.63%) | Renewable energy provider | 5.2% |
| 3. Chevron | Integrated energy and chemicals producer | 3.2% |
| 4. Devon Energy (DVN -0.46%) | Oil and gas producer | 8.9% |
| 5. Enterprise Products Partners | Midstream energy services provider | 7.8% |
| 6. ONEOK | Midstream energy services provider | 5.7% |
| 7. Pioneer Natural Resources (PXD 0.07%) | Oil and gas producer | 11.2% |
Data source: Yahoo! Finance.
Note that the first two stocks on the list share the same underlying business. Brookfield Renewable Partners is a limited partnership (LP). The company created a separate stock organized as a corporation (Brookfield Renewable Corporation) to enable investors to avoid some of the tax hassles associated with LPs.
Also, the two stocks with the highest dividend yields -- Pioneer Natural Resources and Devon Energy -- pay a fixed-plus-variable dividend. The variable portion depends on the companies' excess free cash flow. Although there's no guarantee that Pioneer and Devon will be able to generate as much free cash flow in 2023 as they did last year, their chances appear to be pretty good.
Healthcare
Big pharma companies often pay solid dividends. These three definitely qualify -- and they each handily beat the market in 2022.
| Stock | Business Summary | Dividend Yield |
|---|---|---|
| 8. AbbVie (ABBV 0.25%) | Biopharmaceutical company | 3.7% |
| 9. Bristol Myers Squibb | Biopharmaceutical company | 3.2% |
| 10. Johnson & Johnson (JNJ 0.67%) | Biopharmaceutical, consumer health, and medical devices company | 2.6% |
Data source: Yahoo! Finance.
AbbVie and Johnson & Johnson could be especially appealing to income investors because they're both Dividend Kings with at least 50 consecutive years of dividend increases. The new year will be one of big changes for the two companies.
AbbVie faces declining sales for its top-selling drug Humira due to biosimilar competition in the U.S. J&J plans to spin off its consumer-health unit in 2023. However, both stocks should continue to be winners for investors over the long term.
Real estate
Real estate investment trusts (REITs) are known for their high dividend yields. Below are some of the best REITs on the market.
| Stock | Business Summary | Dividend Yield |
|---|---|---|
| 11. Digital Realty Trust (DLR 0.67%) | REIT focusing on data centers | 4.8% |
| 12. Easterly Government Properties (DEA 1.87%) | REIT focusing on government properties | 7.4% |
| 13. Medical Properties Trust (MPW 4.61%) | REIT focusing on hospitals | 10.3% |
| 14. Realty Income (O 1.46%) | REIT focusing primarily on the retail market | 4.7% |
| 15. Rithm Capital (RITM 1.24%) | REIT focusing on providing capital to financial services and real estate sectors | 12.1% |
| 16. W.P. Carey (WPC 2.13%) | REIT focusing on multiple industries. | 5.4% |
Data source: Yahoo! Finance.
All of these REIT stocks fell in 2022, with some declining sharply. However, if the Federal Reserve stabilizes interest rates later this year, the stocks could enjoy nice rebounds.
Technology/telecommunications
Most tech stocks don't pay dividends. The ones that do tend to offer relatively low dividend yields.
Telecom stocks, on the other hand, often have attractive yields. The following stocks illustrate both points.
| Stock | Business Summary | Dividend Yield |
|---|---|---|
| 17. Apple (AAPL -0.57%) | Consumer technology company | 0.73% |
| 18. Microsoft (MSFT -1.84%) | Software and devices maker | 1.2% |
| 19. Verizon Communications (VZ 0.88%) | Telecommunications provider | 6.7% |
Data source: Yahoo! Finance.
You probably won't buy Apple or Microsoft for their dividends. However, these two beaten-down tech stocks could roar back in 2023.
Verizon likely won't deliver the long-term growth that these tech giants will over the long term. However, it comes with a high dividend yield that income investors shouldn't ignore.
Other
The final members of our list of dividend stocks to buy and hold in 2023 span multiple sectors. All of them offer great dividends and solid long-term growth prospects.
| Stock | Business Summary | Dividend Yield |
|---|---|---|
| 20. Ares Capital (ARCC 0.44%) | Business development company | 10.3% |
| 21. Brookfield Infrastructure Corporation (BIPC 0.84%) | Infrastructure assets operator | 3.7% |
| 22. Brookfield Infrastructure Partners (BIP 2.82%) | Infrastructure assets operator | 4.6% |
| 23. United Parcel Service | Package delivery and logistics services provider | 3.5% |
Data source: Yahoo! Finance.
Note that Brookfield Infrastructure Corporation and Brookfield Infrastructure Partners share the same underlying business (in a similar way that we saw earlier with the two Brookfield Renewable stocks). Investing in Brookfield Infrastructure Corporation doesn't have the tax complications of Brookfield Infrastructure Partners, which is a limited partnership.
Ares Capital ranks among the smallest on the list of 23 dividend stocks, with a market cap of under $10 billion. However, it also pays one of the highest dividend yields. The company believes it will be able to continue paying out its high dividend under multiple scenarios for the economy in 2023.
