3 dividend shares I’m backing to outperform in 2023!

Dividend stocks are a core part of my portfolio. For every four or five dividend stocks, I have a growth stock. There are several reasons for this, but, most importantly, I am risk averse because I am building a portfolio that I do not want to risk.

I am always looking for the best dividend stocks to add to my portfolio. And, now, with stock prices depressed and yields higher, I believe now is a good time to buy and lock in higher yields.

So here are three dividend stocks that I think will outperform the market this year and next.

Greencoat UK Wind: yields 4.71%

Greencoat UK Wind (LSE:UKW) is a closed-end investment company, with the aim of providing investors with an annual dividend that rises in line with inflation. The trust, as its name suggests, invests in UK wind farms. Its holdings generate enough energy to power more than 1.5 million homes.

For a company operating in an exciting sector, Greencoat trades at a relatively low price-to-earnings ratio of just seven. This, combined with the 4.71% dividend yield, makes it an attractive investment for me.

I recently bought this stock because I expect increased activity in the wind energy sector in 2023, including the end of the moratorium on new onshore wind farms.

Lloyds Bank: yield 4.2%

Lloyds‘s (LSE:LLOY) current 4.2% dividend yield is not the largest in the FTSE 100, but larger than the majority of dividend-paying stocks. Bank is a stalwart of the index, and some may call it unexciting. But that’s fine with me.

Lloyds has no investment arm and receives around 70% of its income from UK mortgages. And, for now, that looks positive as higher interest rates push net interest margins higher.

The institution even earns more interest on money left with the Bank of England. According to analysts, each increase of 25 basis points is worth £200m in interest revenue.

A recessionary environment will not be good for bad loans and impairment charges, but I expect this bank to fly high as interest margins increase. I recently bought another Lloyds share.

GSK: yield 4.4%

I am looking to buy more of the pharma and biotech giants GSK (LSE:GSK). Discounted cash flow modeling suggests a fair share price of 1,863p. That is about 20% above the current position.

Not every pharmaceutical company will be a winner, but trends show that as a global population, we will need more drugs, treatments and vaccines.

The company currently offers a 4.4% yield – GSK expects to pay 61.25p per share for 2022. That’s enough to get me interested.

Recent performance has been encouraging. Total sales rose 9% year-on-year to £7.8bn in Q3, with specialty drugs up 24%.

Debt was at £18.4bn at the end of September, and the potential risk of more claims related to Zantac cure, remain a problem. But GSK insists it has no case to answer.