Forget the old adage “sell and may and go”. Any time is a good time to buy dividend stocks. This is true even when the stock market is very volatile, as it is now.
There are, however, two important prerequisites. First, you need to have a long-term mindset. Even the best dividend-paying stocks can drop in the short term. Second, you need to choose stocks with strong underlying companies. Luckily, there are several that fit the bill. Here are my three favorite dividend stocks to buy in June.
1. Brookfield Renewable Power
I can’t think of many stocks I’m more bullish on over the long term than Brookfield Power (BEP -3.13%) (BEPC -3.44%). The company ranks among the leaders in the supply of renewable energy throughout the world.
Brookfield Renewable hasn’t produced scorching returns so far this year. However, any stock in positive territory in this dismal market can rightly be considered a winner.
The company offers a dividend yield of nearly 3.4%. Your actual return will vary slightly depending on the shares of Brookfield Renewable you purchase. Brookfield Renewable Partners is a limited partnership (LP) trading under the symbol BEP. Brookfield Renewable Corporation does not have the tax hassles associated with LPs and trading under the symbol BEPC. However, both have the same underlying activity.
Brookfield Renewable continues to see an acceleration in demand for renewable energy. The capacity of the company’s development pipeline is nearly three times its current capacity. With the global push to reduce carbon emissions, I think this strong dividend should also be a great growth stock.
AbbVie (ABVV -1.75%) stands out as another company built to last. The major drugmaker’s dividend track record underscores this view. AbbVie has increased its dividend for 50 consecutive years, qualifying the company as a member of the elite group of stocks known as the Dividend Kings. Its dividend is currently yielding nearly 3.8%.
The pharmaceutical stock was up nearly 30% since the start of April. Although AbbVie has since given up on some of those gains, it continues to easily beat broader stock indexes this year.
Shares also remain attractive, trading at 10.7x expected earnings. The reduced valuation is largely due to investor concerns over the loss of US patent exclusivity next year by AbbVie’s top-selling drug, Humira.
However, the company has a solid product line that should allow it to quickly return to growth. Indeed, market research firm EvaluatePharma predicts that AbbVie will be the world’s largest drugmaker by 2028 based on prescription drug sales.
3. Devon Energy
Unlike Brookfield Renewable and AbbVie, Devon Energy (DVN -1.19%) is unquestionably a huge winner so far in 2022. Shares of the oil and gas producer are up nearly 80% year to date.
Better yet, Devon is a dividend investor’s dream. The company offers a fixed and variable dividend which currently yields 6.7%. Devon believes his dividend yield in 2022 will be even higher.
The dynamics driving high oil and gas prices don’t seem likely to change any time soon. As a result, Devon should be able to continue to generate strong free cash flow. Its dividend appears to be in good shape.
Could the stock flounder after such a big run? Maybe. However, Devon CEO Rick Muncrief said on the company’s first quarter conference call: “Devon’s strong stock performance over the past year is largely a rebound from generational lows. that we have experienced during the COVID crisis.” The company believes that “it is still very early in this structural bull market”.