What are dividends in stocks?

Dividends are payments made by a company to its shareholders. U.S. companies typically pay dividends quarterly, though some pay less often, and a few even pay monthly. Dividends are generally paid in cash, but some companies pay in "scrip," which is dividends paid in stock. Note that this is not the same as a dividend reinvestment plan (DRIP), where a company (or your brokerage) automatically takes your cash dividend and purchases shares for you.

What is considered a good stock dividend?

It can vary by sector and even particular industries within a sector, but a good stock dividend needs to be sustainable. This is why chasing yield is so dangerous, since a high yield that can't be maintained is no good at all. A useful metric for determining a dividend's safety is the dividend payout ratio, which is the percentage of a company's earnings that it pays out in dividends. Generally, the safest dividends have the lowest payout ratios.

Is it a good idea to buy dividend stocks?

Whether you're looking for income or simply the best possible total returns, chances are good that many dividend stocks can be ideal ways to reach your financial goals. Just remember that yield is often less important than other factors, such as a company's ability to maintain and grow the payout for the long term.

How do dividends work?

A dividend occurs when a company sends money (or stock, though very rarely) to its shareholders. When a company reaches the point that it consistently earns more than management can effectively reinvest, establishing a dividend policy and sending those excess profits back to investors is a smart move.

Do ETFs pay dividends?

Yes, many ETFs pay dividends. Dividend ETFs hold stocks that pay dividends, and the ETF then distributes those dividends to its investors.

Does it matter when you buy a dividend stock?

When you buy dividend stocks, it matters if you purchase them before the ex-dividend date. To receive the next dividend payment, you need to own the stock on or before the ex-dividend date.

Why do companies pay dividends?

Companies pay dividends to distribute a portion of their profits to shareholders. A steadily rising, robust dividend that is well supported by growing profits and cash can indicate a company's financial health and reward investors for their ownership. This practice is common among mature, stable businesses with reliable cash flows, which often have limited opportunities for high-growth reinvestment.

9 Best Dividend Stocks to Buy and Hold for March 2026

By Rachel Warren – Updated Mar 18, 2026 at 9:51 AM EST | Fact-checked by Margo Winton Parodi

Key Points

Consider dividend yield over size; focus on business quality and ability to maintain payouts.
Invest in stocks like Lowe's for long-term gains as they increase dividends regularly.
Diversify by adding dividend stocks from stable sectors and avoid high-yield traps.

Dividend stocks are shares of companies that make regular distributions to their shareholders, usually in the form of cash payments. Dividend stocks can be a useful source of income, but the best dividend stocks can also be an excellent way to build wealth over the long term.

However, not all dividend stocks are great investments, and many investors are unsure how to start their search. With that in mind, here's a list of dividend-paying stocks you might want to consider and some of the most important things to look for in the top dividend stocks.

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A graphic showing the benefits of dividend stocks for both the investors and the company. — Image source: The Motley Fool.

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Ticker Information Table
Name and ticker	Market cap	Dividend yield	Industry
Lowe's Companies (NYSE:LOW)	$134.5 billion	1.98%	Specialty Retail
Realty Income (NYSE:O)	$59.8 billion	5.04%	Retail REITs
Chevron (NYSE:CVX)	$395.0 billion	3.49%	Oil, Gas and Consumable Fuels
Target (NYSE:TGT)	$52.9 billion	3.89%	Food and Staples Retailing
Starbucks (NASDAQ:SBUX)	$111.2 billion	2.52%	Hotels, Restaurants and Leisure
Brookfield Infrastructure (NYSE:BIPC)	$5.7 billion	4.07%	Gas Utilities
Microsoft (NASDAQ:MSFT)	$3.0 trillion	0.87%	Software
American Express (NYSE:AXP)	$206.2 billion	1.09%	Consumer Finance
Clearway Energy (NYSE:CWEN)	$4.8 billion	4.49%	Independent Power and Renewable Electricity Producers

Data as of Mar 18, 2026. Showing 9 of 9 tickers.

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NYSE: LOW

Lowe's Companies

Today's Change

(-2.00%) $-4.80

Current Price

$234.91

Key Data Points

Market Cap

$134B

Day's Range

$233.78 - $238.50

52wk Range

$206.38 - $293.06

Volume

32K

Avg Vol

2.7M

Gross Margin

31.22%

Dividend Yield

1.98%

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Investors worried about the housing downturn shouldn't fret. When the housing supply is tight, homes are harder to buy, so people tend to spend more to upgrade their existing homes. So, any cyclical weakness in its results will likely return to growth over the long term, even if short-term shifts in consumer spending cause an overall slowdown in renovations.

2. Realty Income

If you're looking for a simple way to invest in high-quality real estate for income and growth, Realty Income (O -1.12%) might be the perfect stock. The company owns an array of largely e-commerce-resistant properties, earning strong cash flow from tenants on long-term leases.

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NYSE: O

Realty Income

Today's Change

(-1.23%) $-0.79

Current Price

$63.30

Key Data Points

Market Cap

$60B

Day's Range

$62.77 - $63.99

52wk Range

$50.71 - $67.94

Volume

2.2M

Avg Vol

6.7M

Gross Margin

48.73%

Dividend Yield

5.04%

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Realty Income boasts an exceptional streak of monthly payments and more than three decades of annual dividend increases since its 1994 initial public offering (IPO). Since its founding, Realty has declared 669 consecutive monthly dividends and just raised its monthly dividend for the 134th time since the real estate investment trust (REIT) was publicly listed.

3. Chevron

For years, Chevron (CVX +0.80%) has been a solid stock to own and a big winner for investors, especially for dividend investors. It has maintained a steady track record of generating strong cash flows and modestly growing payouts for 36 years and counting.

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NYSE: CVX

Chevron

Today's Change

(0.80%) $1.58

Current Price

$199.55

Key Data Points

Market Cap

$395B

Day's Range

$198.57 - $200.02

52wk Range

$132.04 - $200.58

Volume

117K

Avg Vol

12M

Gross Margin

14.66%

Dividend Yield

3.49%

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NYSE: TGT

Target

Today's Change

(-1.01%) $-1.18

Current Price

$115.58

Key Data Points

Market Cap

$53B

Day's Range

$115.01 - $117.36

52wk Range

$83.44 - $126.00

Volume

948K

Avg Vol

6.7M

Gross Margin

25.44%

Dividend Yield

3.89%

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At the same time, its focus on increasing its e-commerce business and expanding in-store offerings has helped stabilize its top line while improving profitability. While it's facing some near-term struggles, Target's balance sheet remains shored up to support its commitment to paying dividends to shareholders.

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5. Starbucks

Over the past four decades, Starbucks (SBUX -2.25%) has established itself as the dominant global brand in coffee beverages. With more than 40,000 global stores, as well as Starbucks-branded ready-to-drink beverages and packaged coffee in hundreds of thousands more locations, nobody sells -- or buys -- more coffee than this company.

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NASDAQ: SBUX

Starbucks

Today's Change

(-2.20%) $-2.15

Current Price

$95.42

Key Data Points

Market Cap

$111B

Day's Range

$94.63 - $96.89

52wk Range

$75.50 - $104.82

Volume

94K

Avg Vol

9.3M

Gross Margin

15.73%

Dividend Yield

2.52%

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6. Brookfield Infrastructure

Sometimes, the best stocks are the ones hidden in plain sight. That's the case with Brookfield Infrastructure (BIPC -2.91%), which owns water, energy, utility, transportation, and communications infrastructure projects around the world. At recent Class C share prices, it paid a dividend yield of about 4.6%.

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NYSE: BIPC

Brookfield Infrastructure

Today's Change

(-2.94%) $-1.26

Current Price

$41.63

Key Data Points

Market Cap

$5.7B

Day's Range

$41.34 - $42.57

52wk Range

$32.08 - $51.72

Volume

30K

Avg Vol

670K

Gross Margin

63.63%

Dividend Yield

4.07%

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NASDAQ: MSFT

Microsoft

Today's Change

(-1.14%) $-4.57

Current Price

$394.84

Key Data Points

Market Cap

$3.0T

Day's Range

$394.34 - $398.00

52wk Range

$344.79 - $555.45

Volume

483K

Avg Vol

34M

Gross Margin

68.59%

Dividend Yield

0.87%

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Its yield of less than 1% at recent prices hasn't put it on many dividend investors' radars. But over time, Microsoft's stock has absolutely delivered, with total returns of nearly 2.700% since 2009, with dividends accounting for a portion of those returns.

8. American Express

Financial services, such as consumer and business lending, are another place to find a handful of top dividend stocks, and American Express (AXP -1.14%) is one of the best. Although it's not on the list of companies that raise their dividends every year, Amex has a decades-long track record of either raising or maintaining its dividends through every economic environment.

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NYSE: AXP

American Express

Today's Change

(-1.11%) $-3.33

Current Price

$296.94

Key Data Points

Market Cap

$206B

Day's Range

$296.79 - $300.99

52wk Range

$220.43 - $387.49

Volume

33K

Avg Vol

3.5M

Gross Margin

60.65%

Dividend Yield

1.09%

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9. Clearway Energy

Renewable energy is mostly considered a place for growth investors, but it's also a wonderful opportunity for dividends. Clearway Energy (CWEN -0.55%) is a perfect example.

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NYSE: CWEN

Clearway Energy

Today's Change

(-0.55%) $-0.22

Current Price

$39.76

Key Data Points

Market Cap

$4.8B

Day's Range

$39.35 - $40.00

52wk Range

$25.63 - $41.51

Volume

10K

Avg Vol

1.1M

Gross Margin

16.60%

Dividend Yield

4.49%

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Did you know...?

Dividend investors should focus not on dividend size but on dividend yield.

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A graphic answering questions about dividends, including: how they're paid, how often they're paid, and how much they pay. — Image source: The Motley Fool.

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Best dividend stocks: FAQ

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About the Author

Rachel Warren is a contributing Motley Fool stock market analyst covering pharmaceuticals, biotechnology, medical devices, information technology, and consumer goods. Prior to The Motley Fool, Rachel was a paralegal and legal administrator. She holds a bachelor’s degree in paralegal studies from Liberty University School of Law.

TMFRachelW

American Express is an advertising partner of Motley Fool Money. Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron, Microsoft, Realty Income, Starbucks, and Target. The Motley Fool recommends Lowe's Companies. The Motley Fool has a disclosure policy.