It’s way too early to call it a correction. But momentum in this seemingly endless rally has certainly slowed of late.
Since topping 2,000 points for the first time ever, the S&P 500 has fallen 1.3% in the last month, with the majority of the losses coming last week. That’s not cause for concern. We’ve seen plenty of mini-pullbacks over the course of the last two years. Heck, there was a 3.9% downturn as recently as early August.
Still, the slowdown in the market of late is reason enough to fortify your portfolio with some safety stocks. Dividend growers fit that bill.
It’s never a bad idea to have some protection in your portfolio in the form of dividend payers. Stocks that are consistently growing those dividend payouts make for even better safety plays.
Next month, three stocks that have demonstrated impressive dividend growth of late stand out as especially attractive income investments.
Here are the three best dividend stocks to buy in October:
October Dividend Stock No. 1: Verizon Communications (NYSE: VZ)
Among telecommunications stocks, AT&T (NYSE: T) has the higher yield. But Verizon is growing its dividend at a faster clip.
The largest telecommunications company by market cap, Verizon is upping its quarterly dividend to 55 cents from 53 cents for shareholders of record as of Oct. 10. It marks the eighth consecutive year the company has hiked its dividend. During that time, the payout has increased by 43%. By comparison, AT&T has only increased its payout by a penny each of the last six years.
The 4.2% yield makes Verizon an attractive income play, even with modest 6.6% share price appreciation in the last year.
October Dividend Stock No. 2: Yum Brands (NYSE: YUM)
Yum Brands has never really been known as a dividend stock per se. Perhaps that will change after the fast food chain’s latest dividend increase.
Yum, which owns KFC, Taco Bell and Pizza Hut, has been steadily fattening up its dividend in recent years. The latest increase bumps the payout up from 37 cents a share to 41 cents, good for a 2.1% yield. Yum’s dividend has now quadrupled from 10 cents a share in the last decade.
While its 2.1% yield still falls short of the McDonald’s (NYSE: MCD) 3.4% yield and the 2.5% yield atWendy’s (NYSE: WEN), Yum Brands is the only one of those three companies with earnings and sales that are on the upswing.
Yum’s tasty new dividend will be available to shareholders of record as of Oct. 17.
October Dividend Stock No. 3: Bank of Montreal (NYSE: BMO)
Canada’s oldest bank also happens to be a more generous dividend payer than any of the largest U.S. banks.
Bank of Montreal’s 3.9% yield is one reason why we added this stock to our Portfolio service last February. So far the stock hasn’t disappointed. Between the yield and some nice year-to-date gains, BMO has produced a solid 17.7% return for subscribers who got in early.
Bank of Montreal’s latest dividend increase actually occurred in late July. The next ex-dividend date is Oct. 30.
Though Bank of Montreal has been less consistent about its dividend growth than the other two stocks on this list, for the most part the quarterly payout has hovered in the 68-cent to 72-cent range since 2009.
With so many low-yielding big bank stocks out there, Bank of Montreal is a more productive solution for income seekers.
This article is brought to you courtesy of Chris Preston from Wyatt Research.