In this article, we discuss 10 best December dividend stocks to buy. You can skip our detailed analysis of dividend stocks and their returns over the years, and go directly to read 5 Best December Dividend Stocks to Buy. 

With inflation at its 40-year high, dividend stocks offer one of the best ways to generate a dependable income stream for investors. In the current economic environment, investors are gravitating toward dividend stocks to steadily increase the value of their investments. Historically, dividend stocks outperformed the market during recessionary periods.

According to a report by AllianceBernstein, dividend-paying stocks have a long-term return potential and are a hedge against inflation. From 1971 to August 2022, high-dividend stocks delivered a risk-adjusted return of 0.83%, compared with a 0.71% return from the broader market during the same period. The report also mentioned that returns of high-dividend stocks are positively correlated with inflation during previous inflationary periods. Not only do dividend stocks perform better during periods of economic downturn, but these securities have also repeatedly outpaced inflation in the past. Quality companies tend to increase their payouts during these periods. In the past 15 years ending August 2022, the average dividend growth came in at 13.71% versus a 2.21% growth in the Consumer Price Index, as reported by S&P Global. The report also referred to the data by IHS Markit, mentioning that the year-over-year dividend growth for the next four quarters is expected to be at 6.7%.

When investing in dividend stocks, investors are advised to focus on the respective companies’ dividend growth track records and cash flows. Companies with strong cash flow generation and sound balance sheets are more committed to shareholder return. Some of the best dividend stocks that are popular among investors include Altria Group, Inc. (NYSE:MO), JPMorgan Chase & Co. (NYSE:JPM), and Pfizer Inc. (NYSE:PFE) because of their solid dividend policies.

Our Methodology:

For this list, we selected stocks that pay monthly dividends to shareholders. We examined these companies through their dividend policies, balance sheets, and overall financial health. The majority of the companies mentioned below belong to the REIT sector. The stocks are ranked according to their dividend yields, as of December 6.

Best December Dividend Stocks to Buy

10. Agree Realty Corporation (NYSE:ADC)

Dividend Yield as of December 6: 4.08%

Agree Realty Corporation (NYSE:ADC) is an American real estate investment trust company that focuses on the development and acquisition of net lease retail properties throughout the US. In December, Truist maintained a Buy rating on the stock with an $80 price target, following the company’s recent quarterly earnings. The firm also appreciated the company’s revenue growth.

In Q3 2022, Agree Realty Corporation (NYSE:ADC) reported revenue of $110 million, which showed a 25.7% growth from the same period last year. At the end of September, the company had over $250.4 million available in cash and cash equivalents, compared with $43.2 million nine months ago.

Agree Realty Corporation (NYSE:ADC) is one of the best dividend stocks on our list as it has been raising its payouts for the past 11 years. The company currently offers a monthly dividend of $0.24 per share and has a dividend yield of 4.08%, as of December 6. In Q3, the dividends represented payout ratios of approximately 73% of both Core FFO per share and AFFO per share. The company’s stable monthly payouts make it a reliable option alongside Altria Group, Inc. (NYSE:MO), JPMorgan Chase & Co. (NYSE:JPM), and Pfizer Inc. (NYSE:PFE).

The number of hedge funds tracked by Insider Monkey owning stakes in Agree Realty Corporation (NYSE:ADC) grew to 26 in Q3 2022, from 19 in the previous quarter. The collective value of these stakes is over $312.7 million. CaaS Capital was the company’s leading stakeholder in Q3.

8. STAG Industrial, Inc. (NYSE:STAG)

Dividend Yield as of December 6: 4.51%

STAG Industrial, Inc. (NYSE:STAG) is a real estate investment trust company that mainly invests in industrial properties across the US. The company has a stable dividend policy, raising its dividends for the past 10 years. Currently, it offers a monthly dividend of $0.1217 per share for a dividend yield of 4.51%, as recorded on December 6.

In the third quarter of 2022, STAG Industrial, Inc. (NYSE:STAG) reported revenue of $166.3 million, which showed a 17% growth from the prior-year period. Its cash available for distribution came in at over $87 million, up from $72.3 million during the same period last year. The company paid $22.3 million in dividends during the first nine months, which makes it one of the best dividend stocks to buy.

Wells Fargo maintained an Equal Weight rating on STAG Industrial, Inc. (NYSE:STAG) with a $34 price target this November. The firm mentioned that the company will continue to see outsized growth in its core portfolio relative to historical averages.

At the end of Q3 2022, 19 hedge funds tracked by Insider Monkey owned stakes in STAG Industrial, Inc. (NYSE:STAG), valued at $336.2 million collectively.

Carillon Tower Advisers mentioned STAG Industrial, Inc. (NYSE:STAG) in its Q1 2022 investor letter. Here is what the firm has to say:

“U.S. and around the world, and the higher inflation this cycle than in 2000. Labor inflation and general labor availability were again concerns for many companies. Supply chains eased for some goods, but remained challenged for many commodities including energy, agriculture, and fertilizer due to war and general scarcity, and also in many consumer products as semiconductors remained in short supply. Stag Industrial (NYSE:STAG), a warehouse REIT focused on rural distribution properties, fell as interest rates rose and fear of an economic slowdown gripped markets.”

7. Realty Income Corporation (NYSE:O)

Dividend Yield as of December 6: 4.76%

An American multinational real estate investment trust, Realty Income Corporation (NYSE:O) is another best dividend stock on our list. In Q3 2022, the company posted revenue of $837.3 million, up 70.9% from the same period last year. At the end of September, it had over $187.7 million available in cash and cash equivalents and $2.5 billion in liquidity. The company’s strong cash position makes it one of the best dividend stocks on our list.

Realty Income Corporation (NYSE:O) has been raising its dividends consistently for the past 28 years and has paid dividends for 100 quarters in a row. The company’s monthly dividend currently stands at $0.248 per share and has a dividend yield of 4.76%, as of December 6.

In October, Raymond James maintained an Outperform rating on Realty Income Corporation (NYSE:O) with a $68 price target. The firm sees the company as a strong risk/reward play within the net lease.

The number of hedge funds tracked by Insider Monkey owning stakes in Realty Income Corporation (NYSE:O) grew to 28 in Q3 2022, from 19 in the previous quarter. These stakes are valued at $422.5 million collectively.

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Disclosure. None. 10 Best December Dividend Stocks to Buy is originally published on Insider Monkey.