3 top dividend-paying stocks right now

Building a portfolio of dividend-paying stocks can be a good idea when targeting long-term gains. But not all dividends are created equal. And it is wise to research the company carefully before choosing a stock.

One danger is that businesses with high dividend yields can sometimes find it difficult to maintain shareholder payments. For example, it may apply to companies with cyclical operations, but not necessarily. However, in some cases, high yield can be a warning sign rather than an attractive feature of the stock.

Strong financial record

One way to reduce risk is by looking for a long record of dividend payments. And ideally, those multi-year shareholder payouts will be backed by strong cash inflows. When choosing a dividend stock, it is desirable to find an underlying business with a record of rising revenue, earnings, cash flow and shareholder dividends.

However, all stocks have risks as well as potential positives. And because any business can experience operational difficulties from time to time. However, there are a few companies worth considering for further and deeper research now.

For example, Unilever. The business makes branded and packaged consumer goods, including food, detergents and personal care products. And the company’s dividend history spans decades.

There is good support from cash flow for dividend payments. And the business is known for its defensive and less cyclical characteristics. Meanwhile, with the share price close to 4,114p, the expected return is running below 4% for 2024.

and Moneysupermarket.com looks like a cash-cow business these days. The company runs a comparison site for insurance, money, home services, and other products. And its cash flow record has been strong over the past few years.

Meanwhile, there is a good record of shareholder dividend payments. And directors have continued to hold on during the pandemic, which is seen as a sign of business strength.

With the share price close to 241p, the forward yield to 2024 is just above 5%. And this is an interesting rate because the payment will grow in the next year.

Dividends that can last for a long time

But other businesses that will see dividend growth are financial technology and trading platform companies IG group. Multi-year track record for revenue, cash flow and strong dividends. And IG kept paying for shareholders through the pandemic.

With the share price close to 822p, the forward yield for the trading year to May 2024 runs at around 5.75%.

All three are examples of businesses that have the potential to have durable dividends due to the defensive nature of their operations. But that’s not the only stock to consider for your current dividend-paying portfolio. And there is no guarantee that they will continue to perform well just because they look attractive now.

However, all of them should be studied further with a view to maintaining them long-term as part of a diversified portfolio focused on income.