The year 2025 looks uncertain after two years of strong growth. Dividend-paying stocks could inject security into portfolios. In this article, we’ll take a closer look at 6 stocks that offer dividends and upside potential.
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After two straight years of robust gains of more than 20% for , investors are now looking ahead to the year ahead with caution. Many are bracing for a change, fearing that stocks will face more volatility in the months ahead.
Given this uncertainty, it may be time to reconsider the transition to safer betting. An effective strategy? Focus on dividend paying stocks. These investments not only provide stability, but also offer additional benefits that could help withstand a more volatile market.
First, dividend-paying stocks provide regular income independent of stock price movements and allow the magic of compound interest to work as dividends are reinvested.
Additionally, dividend-paying stocks benefit from a loyal shareholder base, more interested in regular payments than in stock price movements, making them less susceptible to panic and temporary corrections.
A company that pays dividends is by definition profitable since dividends represent the share of profits that goes to shareholders. While this alone does not guarantee a company’s financial strength, it is a good place to start.
The Best S&P 500 Dividend Stocks to Buy and Hold
In the remainder of this article, we will focus on identifying the “best” dividend stocks among S&P 500 companies. Specifically, we filtered out stocks from the index that combine the following qualities:
Dividend yield greater than 5%. Upward potential according to Fair Value greater than +10%. Upward potential according to analysts greater than +10%. InvestingPro Financial Health Score greater than 2.5/5
Remember that InvestingPro Fair value uses recognized valuation models for every stock in the market, allowing us to determine whether a stock is overvalued or undervalued.
THE Health Score,…
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