7 Best Dividend Stocks to Buy for BOTH Cash Flow and Growth

Can you have both high dividend yields and high returns? Yes…but it’s also one of the biggest traps in dividend stocks if you don’t know where to look. I’ve made the mistake myself, just focusing on high yield dividend stocks without understanding how it affects growth. Don’t make the same mistake!

High yield dividend stocks that are also growth stocks is one of the most requested themes I get from investors. Everyone wants stocks that pay high dividends to produce double-digit returns as well. The problem is when you only focus on that dividend yield, first picking only dividend stocks with yields of 10% or more. At that yield, there isn’t much left for growth or return and the stock price falls.

In this video, I’ll show you how to find dividend stocks with high yields that can also be growth stocks for high returns. We’ll go through a dividend stock screener that will filter for only the best dividend growth stocks to buy and then reveal the seven best dividend stocks to watch right now. As a bonus, I’ll also share a strategy to turn any stock into a dividend paying stock.

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I recently asked our Facebook group what kinds of stocks you wanted to see on the channel. The result was a mix of dividend stocks and growth stocks…and both! Unfortunately it’s also one of the biggest traps for investors so I wanted to make a video about it.

The problem is the tradeoff between high yield dividends and growth. A company paying almost all its earnings out as dividends isn’t saving enough back for growth. That means it could fall behind the competition and the share price will suffer as a result. Finding high dividend stocks that can also produce a good stock return means striking a balance between the two.

For our dividend stock list, we start with a basic screener that looks for stocks with a dividend yield of 4% or higher. That might not seem like a high yield but it’s twice the market average and most of the stocks we found offer 5% yields and more. We also screened for dividend stocks growing their dividend by 5% or more a year. That not only puts more money in your pocket but it’s a good sign the earnings are growing which should also support the stock price.

I also want to screen for stocks with trailing returns of 7% or more a year. That doesn’t mean they will continue to produce stock returns every year but it’s a good sign if a company can grow its dividend and its stock price in the past. Finally, I screen for companies with 5% sales growth or higher. That’s important because it flows through to earnings which are how a company pays its dividends and what the stock price is based on.

It’s a simple stock screener for dividends but will help you find those stocks with the potential for both high yields and returns. You might try relaxing some of the criteria like dividend growth or sales growth over the last year and see what other stocks come up. The last year was unique in its challenges for dividend stocks so I would focus more on the companies that did well before last year.

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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.
#dividends #dividendstocks #stocks

[madmakes]

Curious after making all these top picks videos for a few years, are there any stocks you Used to support, but Don't now?

[kcsnew]

Awesome, just happen to watch couple of videos, immediately liked and subscribed. Going to watch rest of your videos. Cheers

[AbsoIuteP]

Can we get a canadian version of those best dividend or best for both div & groth but for canadian stocks as us canadians have 0$ commission fees for CAD stocks on wealth simple trade. I know griffin milks does but it would be fun to have an older and most probably more experienced stock picker / analysis / pov

[lilrockfromga]

This was some very helpful content to help produce more dividends. Thanks

[rhyka]

One of your best videos. Some excellent picks!

[christoperspeer]

You are right. I bought several ETN's they tanked, I sold

[abdulazizkattan]

Do they deduct tax from REIT ? If yes ? Whats the percentage

[bobzulueta]

Have you looked at high dividend high growth ETFs available in TSX Canada? Your thoughts/suggested funds to invest in?

[micecollective]

you channel is really useful, thank you very much.

[RyanBlockb]

Can you do a video on stock splits. Such as LB now BBWI and VSCO, and ATT upcoming split to ATT phone service and a separate tv and movie company. Why do companies split? Are they a good buy before or after a split? Are the dividends likely to continue? Is a company that splits, better for the company or the stock market?

[arigutman]

Great video and quality companies! Today's "investor" is all about the day trading, the get rich by Tuesday gang which is all unfortunate consider the Rome wasn't built in a day strategy has done more to create more millionaires than anything. What exactly is it about? Finding QUALITY companies, investing for the long run and just kicking back to relax DRIP style. Thank you for your video!

[filb]

As a Canadian investor, we have a s*itty exchange rate, good to see you posting some good US low cost dividend stocks. Very valuable information sir :)

[cuongtruong]

You think skillz investment for long term. Thank you ken

[delliott]

"Wish in one hand and ... in the other", my Dad (USMC 57-60). Semper Fi.

[dannyc]

Simply fantastic!!! Don't think there's better on the net.

[JimHabash]

FTAI has a negative earnings per share? How is that good?

[michaelwescott]

I like that you outline individual stocks, but teach people how to find their own stocks too.

[johanlorenzo]

Buy and hold for long term, helps you have your cake and eat it too! 😅 Patience pays off with a higher Yield on Cost! 😁🙌

[dominikmauer]

Hu, very nice list. I would like to add Norilsk Nickel. Greetings, Dominik

[louiszanon]

Hello Mr. Hogue. I have been subscribed to you channel for about 5 months. I remember that Aristocrats and Kings must be on the S&P 500. However, with the number stocks to invest in there has to be some stocks not on the S&P 500 that have consecutively increased the dividends for 25 and 50 years. Could please do a video showing some of the better companies that met these criteria. I would appreciate it. You are by far the best analysist on the financial tube. Thank you for your consideration of the video.

Louis