8.03% on pile of money

The Three Best Dividend Stocks to Buy in July

By:Mike Butler

Find out which of our July faves sports an 8.03% dividend

  • Dividend stocks can be a great way for new and seasoned investors to get exposure to different sectors in all market environments.
  • Dividends are cash payouts to ETF and equity shareholders that are made on a quarterly basis.
  • The dividend is taken out of the stock price so it is not an arbitrage event.
  • The "dividend champions" and "dividend aristocrats" watchlists on the tastytrade platform help us see what companies really focus on delivering an enticing dividend.

What is a dividend stock?

Dividend stocks are publicly traded companies or exchange-traded funds (ETFs) like SPY that offer an incentive to investors to buy shares. The incentive is a quarterly cash payment that shareholders that can count on as consistent. The dividend amount is known ahead of time, and traders and investors can take this into account when analyzing a stock or ETF.

Dividend stocks can be a nice place to park some cash when markets are complacent and not much is happening. Dividend stocks offer cash payouts to shareholders, and some of these payouts can be a sizable percentage of the stock price. If the stock price grows over time, the dividend can be a nice boost to profitability.

The Dividend Aristocrats watchlist on the tastytrade platform helps us see mega-cap companies in the S&P 500 that have increased their dividend for 25+ consecutive years, where the Dividend Champions watchlist shows us companies of all sizes and sectors that have increased their dividend at the same rate.

Let's take a look at Target (TGT), AT&T (T) and AbbVie (ABBV)— three companies that have underperformed relative to their sector for the year.

Target—a well-known dividend stock near 2023 lows

  • 9.9 IV rank
  • $60.9 billion market cap
  • 2.43% dividend yield
    • $1.10 on 8/15/23

Everyone I know goes to Target (TGT) for one item and leaves with 20, and yet the stock is near the lows of the year as an affordable buy-it-all-here megastore. This Dividend Aristocrat has a market cap of $60.9 billion and announced a $1.10 dividend for Aug. 15, 2023. This is still a healthy dividend, considering the stock price is hovering around $133 after falling from the 2023 high of $181.70.

At over a 3% dividend yield for this year, Target currently has an expected move of +- $21.28 through Jan. 19, 2024.

Target ytd chart

AT&T—a low-priced stock with a dividend yield over 6%

  • 38.4 IV rank
  • $114 billion market cap
  • 8.03% dividend yield
    • $0.28 on 7/7/23

AT&T (T) announces earnings before the market opens on July 26, so investors will have a better idea of future guidance in a few weeks. This stock is currently trading at $16, well off the highs of $20.48 realized in late January. Rumor has it Amazon (AMZN) may be tinkering with the idea of getting into communications, which would naturally be a competitive nightmare for companies like T, but AT&T boasts a $0.28 dividend announced for July 7, 2023, which is a very high yield for such a small priced stock.

At a market cap of $114 billion, you might think there would be some implied volatility attached to this stock's price, but the expected move through Jan. 19, 2024 is just +-$1.74.

AT&T chart

AbbVie—will Botox lift ABBV From the 2023 Lows?

  • 39 IV rank
  • $238 billion market cap
  • 3.94% dividend yield
    • $1.48 on 7/13/23

AbbVie (ABBV), a Chicago-based pharmaceutical company, has a booming Botox business among other things. The company announced a $1.48 dividend for July 13, 2023, which is about a 4% dividend yield.

The stock is trading at $137, about five points off the lows realized a few days ago. ABBV reached a 2023 high of $168.11 in January and hasn't had much strength since, given inflation and recession worries and how they may affect cosmetic procedures.

The stock has posted gains four days in a row, and with earnings being announced in late July/early August, we may have a better idea of what to expect in the next few quarters.

AbbVie has an expected move of +-$14.65 through the Jan. 19, 2024 cycle.

Abbvie chart
Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb  

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.

Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.  Options, futures, and futures options are not suitable for all investors.  Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.

tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.

tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.

tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.

© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved.  Applicable portions of the Terms of Use on tastylive.com apply.  Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.