Best Dividend Stocks to Buy Now for January 2026
5 Best Dividend Stocks to Buy Today
| Company (Ticker) | 12 Week Price Change | Annual Dividend | Annualized Dividend Growth | Dividend Payout Ratio | Dividend Yield |
|---|---|---|---|---|---|
| Copa Holdings (CPA) | -0.92% | $6.44 | 34.23% | 40.00% | 5.17% |
| John Wiley & Sons (WLY) | -18.14% | $1.42 | 0.74% | 37.00% | 4.59% |
| Prudential Financial (PRU) | 15.30% | $5.40 | 3.93% | 38.00% | 4.59% |
| Lincoln National (LNC) | 6.01% | $1.80 | 1.34% | 23.00% | 4.31% |
| Sonoco (SON) | 18.87% | $2.12 | 4.01% | 36.00% | 4.30% |
*Updated on January 15, 2026.
Copa Holdings (CPA)
$128.92 USD +4.38 (3.52%)
3-Year Stock Price Performance
Premium Research for CPA
- Zacks Rank
Hold 3
- Style Scores
A Value C Growth B Momentum B VGM
- Market Cap:$5.13 B (Mid Cap)
- Last Announced Dividend Amount: $1.61
- Last Dividend Payout Date:Dec. 15, 2025
- Projected EPS Growth:14.84%
- Next EPS Report Date: Feb. 11, 2026
Our Take:
Copa Holdings is a Panama-based airline group operating Copa Airlines and low-cost carrier Wingo from the “Hub of the Americas” in Panama City.
For income investors, a 5.17% yield supported by a roughly 40% payout and strong five-year dividend growth argues for sustainability, while a modest price-to-cash-flow near 5.5x and mid-20s ROE suggest healthy coverage. Its centralized hub and cost discipline help produce resilient cash generation that underpins the dividend through traffic cycles.
Operationally, Copa is focusing on network expansion and restoring routes, leveraging its geographic advantage to enhance connectivity across Latin America. Such growth, balanced by manageable leverage, gives it earnings capacity without sacrificing balance-sheet strength.
Copa also screens attractively with a Value Score of A and Zacks Rank #3 (Hold), aligning entry price with its steady cash flow. For dividend seekers, the combination of a disciplined payout, efficient hub strategy and reasonable valuation supports steady, sustainable distributions.
John Wiley & Sons (WLY)
$31.01 USD +0.09 (0.29%)
3-Year Stock Price Performance
Premium Research for WLY
- Zacks Rank
- Hold 3
- Style Scores
B Value F Growth D Momentum D VGM
- Market Cap:$1.63 B (Small Cap)
- Last Announced Dividend Amount:$0.36
- Dividend Payout Date:Jan. 15, 2026
- Projected EPS Growth:9.89%
- Next EPS Report date:March 5, 2026
Our Take:
Wiley is a global research and learning company spanning academic journals, scientific publishing and digital education solutions.
A 4.59% yield funded by a conservative 37% payout and low price-to-cash-flow near 4.8x provides a sound base for income, even as five-year dividend growth has been modest. The stability of subscription-like research revenues, coupled with restructuring-driven cost savings, supports dividend durability through cycles.
Fundamentally, management is simplifying the portfolio and monetizing content in AI partnerships while executing a value-creation plan that has aided recent results, improving operating leverage. This pivot toward higher-margin publishing platforms and learning content should help sustain free cash flow as education markets evolve.
An advantageous Value Score of B and a Zacks Rank #3 highlight a reasonable valuation for a steady payer. Together, prudent payout policy, cost actions and durable research franchises support a credible path to sustainable dividends.
Prudential Financial (PRU)
$116.43 USD -1.28 (-1.09%)
3-Year Stock Price Performance
Premium Research for PRU
- Zacks Rank
- Hold 3
- Style Scores
A Value D Growth F Momentum C VGM
- Market Cap:$41.20 B (Large Cap)
- Last Announced Dividend Amount: $1.35
- Last Dividend Payout Date:Dec. 11, 2025
- Projected EPS Growth:14.74%
- Next EPS Report Date:Feb. 3, 2026
Our Take:
Prudential is a diversified financial services firm with global insurance franchises and PGIM, a large multi-asset investment manager. Favorable underwriting results in domestic and international operations and lower costs continue to support its profits.
Income appeal rests on a 4.59% yield with a disciplined 38% payout and solid ROE, backed by diversified cash flows from U.S. Businesses, International Businesses and the asset-management division. The breadth of earnings drivers has supported resilient results through varying market conditions.
Strategically, PGIM’s scale and integration, combined credit units on a near-$1 trillion platform, enhance fee durability and complement spread-based insurance income, offering ballast for dividend coverage. Recent quarterly performance underscores that mix even amid segment variability.
With a Value Score of A and a Zacks Rank #3, PRU offers a reasonable valuation relative to cash generation. That balance of diversified earnings, prudent payout and asset-management scale supports steady, sustainable income.
Lincoln National (LNC)
$41.52 USD -0.27 (-0.65%)
3-Year Stock Price Performance
Premium Research for LNC
- Zacks Rank
Hold 3
- Style Scores
C Value F Growth A Momentum D VGM
- Market Cap:$7.94 B (Mid Cap)
- Last Dividend Payout Date:$0.45
- Dividend Payout Date:Feb. 2, 2026
- Projected EPS Growth:11.46%
- Next EPS Report date:Feb. 12, 2026
Our Take:
Lincoln National offers life insurance and retirement solutions across protection, annuities and workplace savings. Improving net investment income and mortality results will support profit growth.
A 4.31% yield with a conservative 23% payout and a low price-to-cash-flow of around 5.4x argues for dividend safety as earnings normalize. Through-cycle ROE in the high teens and a manageable leverage further support the company's coverage.
Lincoln has been de-risking legacy liabilities via block reinsurance, a step aimed at improving free cash flow and stabilizing capital ratios. These moves, paired with product repricing, are designed to reduce volatility and support steadier earnings power that can continue to fund the dividend.
A Value Score of C and a Zacks Rank #3 signal a combination of a measured payout policy, capital strengthening and diversified protection and retirement franchises. This underpins a cautious but credible case for sustainable income.
Sonoco (SON)
$49.11 USD -0.21 (-0.43%)
3-Year Stock Price Performance
Premium Research for SON
- Zacks Rank
- Hold 3
- Style Scores
A Value D Growth F Momentum D VGM
- Market Cap:$4.86 B (Mid Cap)
- Last Announced Dividend Amount:$0.53
- Dividend Payout Date:Dec. 10, 2025
- Projected EPS Growth:34.83%
- Next EPS Report date:Feb. 16, 2026
Our Take:
Sonoco, a global packaging leader, serves consumer and industrial markets with rigid paperboard, metal and flexible solutions.
A 4.3% yield, around 36% payout and steady five-year dividend growth are supported by durable packaging end-markets and a balanced product mix, with ROE above 20% and cash-flow valuation near 6x. The company’s century-long record of paying dividends and multi-decade growth streak speaks to cash-flow resilience.
Strategically, Sonoco is scaling metal packaging thanks to the Eviosys acquisition. The buyout from December 2024 delivered significant synergies and earnings accretion that enhanced dividend coverage, while portfolio actions streamlined focus. Such moves complement its fiber-based platforms and long-standing relationships with global consumer brands.
With an A Value Score and Zacks Rank #3, Sonoco screens reasonably valued, and its disciplined payout, sturdy balance sheet, ongoing portfolio upgrades and implementation of price increases underpin confidence in steady, sustainable dividends.
Methodology
The Zacks Rank is a proprietary stock-rating model that uses trends in earnings estimate revisions and earnings-per-share (EPS) surprises to classify stocks into five groups: #1 (Strong Buy), #2 (Buy), #3 (Hold), #4 (Sell) and #5 (Strong Sell). The Zacks Rank is calculated through four primary factors related to earnings estimates: analysts' consensus on earnings estimate revisions, the magnitude of revision change, the upside potential and estimate surprise (or the degree in which earnings per share deviated from the previous quarter).
Zacks builds the data from 3,000 analysts at over 150 different brokerage firms. The average yearly gain for Zacks Rank #1 (Strong Buy) stocks is +23.62% per year from January, 1988, through June 2, 2025.
For this list, only companies trading on the New York Stock Exchange or NASDAQ with a dividend yield of 4 to 6% were included. We also only evaluated stock with a low debt-to-equity ratio, as well as a conservative payout ratio and dividend growth. Only stocks with a Zacks Rank #3 (Hold) or higher were considered. All information is current as of market open, Jan. 15, 2026.
Guide to Best Dividend Stocks
What Are Dividend Stocks?
Dividend stocks are shares of companies that return a portion of their earnings to shareholders on a regular basis. Rather than relying solely on stock price appreciation, dividend investors benefit from this income stream, which can complement long-term growth.
How Do Dividend Stocks Work?
Corporations that generate surplus cash may decide to share part of it with shareholders through dividends. The firm’s board will declare a dividend — often expressed as a dollar amount per share — and set a record date to identify eligible shareholders. On the payment date, the company sends the dividend (in cash or additional shares) to investors who held the stock on the record date.
Dividends typically come out of a company’s profits or free cash flow. To continue paying dividends, companies need consistent earnings, prudent capital allocation, and manageable debt levels.
How Often Do Dividend Stocks Pay in a Year?
Most U.S. dividend-paying companies distribute dividends quarterly (four times per year). Some firms choose semiannual or annual payments, depending on business norms or cash flow timing. What matters more than the frequency is consistency — companies that maintain or increase their dividend over time tend to instill more investor confidence.
Benefits and Risks of Dividend Stocks
Benefits:
- Supplemental income stream — Dividends provide cash flow even if the stock price is flat or in decline.
- Total return boost — Over long horizons, dividends have historically contributed a meaningful share of returns. (Many capital markets analyses show dividends often account for 30–50% of total equity returns.)
- Downside cushion — In volatile markets, dividend income helps offset capital losses.
- Sign of stability — Companies that consistently pay or increase dividends often have disciplined management and stable cash flows.
Risks:
- Dividend cuts — If a company hits a rough patch, it might reduce or suspend dividends, which often leads to share price declines.
- Limited growth reinvestment — High dividend payments may reduce funds available for expansion or innovation.
- Interest rate competition — When bond yields rise, dividend stocks (especially those with modest growth prospects) may look less attractive in comparison.
- Tax drag — Dividends are taxed (depending on account structure and holding period), which can eat into net return.
Dividend Stock ETFs vs Individual Stocks
When considering dividend exposure, investors have two main paths:
- Individual dividend stocks: You pick specific companies you trust to pay and grow dividends. This gives you direct control over stocks and allows targeted allocation to sectors or themes you favor.
- Dividend ETFs / mutual funds: Pools of dividend-paying stocks maintained by professional managers. These provide instant diversification, reduce individual stock risk, and simplify portfolio management.
Pros of Dividend ETFs
- Automatic diversification lowers the risk of a single holding failing.
- Fund managers monitor holdings and rebalance.
- Easier to scale and maintain, especially for smaller portfolios.
Cons of Dividend ETFs vs Individual Stocks
- Yields tend to be diluted by including lower-yielding names.
- Less control over specific holdings or sector weightings.
- Management fees may erode yields over time.
Many investors use a hybrid strategy: core allocation via a dividend ETF (for stability) supplemented by hand-picked individual dividend stocks for yield or growth.
How to Choose the Best Dividend Stocks
Not all dividend stocks are created equal. Here’s what to look for when evaluating candidates:
Dividend Yield
Yield = (Annual Dividend per Share) ÷ (Current Share Price). A moderate, well-supported yield (say 2 %–6 %, depending on sector) can be healthy, while extremely high yields often signal trouble (e.g. deep decline in share price)
Dividend Payout Ratio
This ratio shows what percentage of a company’s earnings are paid out as dividends. If a company distributes too much (e.g. > 80–90 %), it may lack flexibility to weather downturns. More conservative ratios (e.g. 30–60 %) often indicate room for future increases or a buffer in tough times.
Dividend Growth History
Look for firms that have steadily raised their dividends over years. A consistent upward trend signals confidence in future earnings. Dividend “Aristocrats” — firms in the S&P 500 that have raised dividends for at least 25 consecutive years — are often viewed as safer dividend picks.
Company Financial Health
Examine fundamentals:
- Free cash flow and cash flow stability
- Debt load and interest coverage
- Profit margins
- Growth prospects
- Competitive advantage (moat)
A company with healthy cash flow and manageable debt is more likely to sustain and grow dividends.
Sector and Market Trends
Some sectors are inherently more dividend-friendly (utilities, consumer staples, real estate, energy) because they generate steady cash flows. Others (like high-growth tech) may pay little to none in dividends as they reinvest heavily.
Also consider macro conditions — for example, rising interest rates, inflation pressures, regulatory risks — which may disproportionately affect certain sectors.
Tips for Building a Dividend Portfolio
- Start with a foundation of blue-chip dividend stocks — Established companies with strong balance sheets and long payout histories.
- Diversify across sectors — Avoid being overly concentrated in one industry (e.g. energy or REITs).
- Reinvest dividends — Using a Dividend Reinvestment Plan (DRIP) can compound returns over time.
- Allocate some portion to growth or higher-yield names, if your risk tolerance allows — but don’t let them dominate.
- Review and rebalance periodically — Monitor fundamentals, payout changes, valuation shifts, and sector dynamics.
- Use metrics and screening tools — Apply filters (yield, payout ratios, growth, fundamentals) to narrow your universe, then do deeper research.
Mistakes to Avoid about Dividend Stocks
- Chasing the highest yield blindly — extremely high yields can indicate a distressed company or impending cuts.
- Ignoring payout sustainability — yield without coverage (earnings, cash flow) is precarious.
- Overconcentration in one stock or sector — a dividend cut or sector downturn can deeply hurt.
- Neglecting growth potential — pure high-yield stocks may underperform in growth cycles.
- Forgetting taxes and fees — dividends taxed or fees eroding yield can reduce net returns.
Also, be cautious if yield spikes because of falling share price — that could be a warning sign rather than opportunity.
Frequently Asked Questions About Dividend Stocks
How are dividends taxed?
In the U.S., qualified dividends (if holding periods are met) are taxed at long-term capital gains rates (0 %, 15 %, or 20 %, depending on income bracket). Non-qualified dividends are taxed at ordinary income rates. Additionally, when you sell shares, capital gains taxes may apply to the appreciation portion.
Are dividend stocks good for retirees?
Yes. They can provide a predictable stream of income and may buffer volatility. However, retirees should emphasize safety and sustainability — favor those with strong balance sheets, stable business models, and moderate payout ratios. Also, be aware of tax effects and inflation.
What’s a good dividend yield?
There’s no one “ideal” yield. Many investors view 2 %–6 % as reasonable, depending on the sector and interest rate environment. Yields well above that range warrant extra scrutiny — high yields often come with higher risk.
Are dividend stocks safe for beginners?
They can be, especially when you start with well-known, financially sound dividend payers and diversify. The income cushion helps offset downside risk. But beginners must still research fundamentals, avoid yield traps, and avoid overconcentration.
