Dividends symbolize the tangible rewards that come from investing in the stock market. They represent a company’s decision to distribute a part of its earnings back to its shareholders. While some companies might reinvest their profits to fuel expansion or reduce debt, others recognize the value of giving back. They do this by using dividends as a means to share their success. These payouts can come in various forms. For example, as cash or additional stock shares. Furthermore, this typically occurs on a fixed schedule, often quarterly.
Dividend stocks are particularly attractive to a subset of investors who prioritize steady income over potential capital gains. The allure of these stocks lies not just in the immediate returns from the periodic payouts. But also in the typically lower volatility associated with dividend-paying companies. Such firms are often well-established with a robust financial structure, making them relatively stable in turbulent market conditions. For retirees or those nearing retirement, these stocks offer a way to derive consistent income. While still participating in the market’s potential appreciation.
However, investing in dividend stocks isn’t as simple as selecting companies with the highest yields. A high dividend yield can sometimes be a red flag, indicating potential underlying issues within the company. Therefore, successful dividend investing requires a balanced approach, focusing on the stability of the dividend, the health of the company, and the sustainability of its payout ratio. Moreover, understanding the tax implications of dividends and the overall sectoral trends can influence dividend payouts. This makes it essential for potential investors to undertake comprehensive research before diving into this investment strategy. That said, here are two dividend stocks to watch in the stock market right now.
Dividend Stocks To Watch In The Stock Market Now
- International Business Machines Corporation (NYSE: IBM)
- Walgreens Boots Alliance Inc. (NASDAQ: WBA)
International Business Machines Corp. (IBM Stock)
To begin, International Business Machines Corporation (IBM), commonly known as IBM, is a global technology and consulting company. With a history that spans over a century, IBM specializes in providing hardware, software, cloud-based services, and cognitive computing solutions for a diverse range of industries. Currently, IBM offers its shareholders a quarterly dividend of $1.66, which results in an annual dividend yield of 4.66%.
Earlier this month, IBM announced its collaboration with the UN Energy Compact through the IBM Sustainability Accelerator Clean Energy cohort. This initiative, launched in 2022, aims to address pressing clean energy concerns, including electricity access, energy transition, and renewable strategies, aligned with the UN’s goal of ensuring universal access to sustainable energy by 2030. IBM’s technology and expertise are being employed across various regions, including Africa, Japan, and Canada, with an emphasis on supporting vulnerable communities facing environmental threats.
In the last six months of trading, shares of IBM stock are up 9.50%. Meanwhile, during Wednesday morning’s trading session, IBM stock opened higher by 0.49% at $142.81 a share.
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Walgreens Boots Alliance (WBA Stock)
Next, Walgreens Boots Alliance Inc. (WBA) is a multinational health and wellness company, playing a central role in both the pharmacy and retail sectors. The company operates one of the largest pharmacy chains in the U.S. and has a significant presence worldwide, offering a range of products and services related to health and well-being. Today, WBA offers its shareholders a quarterly dividend in the amount of $0.48, which results in an annual dividend yield of 8.47%.
On Tuesday this week, Walgreens announced the appointment of Tim Wentworth as their new Chief Executive Officer, effective from October 23. Mr. Wentworth, who boasts nearly thirty years of leadership in the healthcare sector, will also join the Walgreens Boots Alliance (WBA) Board of Directors. Before this appointment, Wentworth served as the founding CEO of Evernorth, a health services branch of Cigna. He also previously held the position of CEO at Express Scripts, a major pharmacy benefit manager in the U.S., transforming it into a prominent company with over $100 billion in revenue.
In the last month of trading, shares of WBA stock have started to recover by 5.73%, though year-to-date, WBA stock have fallen by 30.51% so far. Meanwhile, during Wednesday morning’s trading session, WBA stock is trading up on the day so far by 1.22% at $22.65 a share.
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