7 Dynamite Dividend Stocks for Income and Growth in 2023

Many long-term investors appreciate dividend shares, for several reasons. Companies that return a portion of their profits to their shareholders through dividends are generally more reliable. In addition, dividend stocks provide investors seeking retirement income with a steady stream of passive income.

In general, dividends are usually issued by well-established, financially stable companies that are often household names. And the most reliable dividend stocks have a long history of distributing capital to their shareholders. This is what many such investors focus on.

With the market showing consistent improvement, dividend shares are likely to provide growth and income in 2023. Investors can choose to reinvest their dividends back into a given stock, or they can choose to receive dividend payments in cash, which can provide a steady stream of income.

Companies that pay dividends tend to be financially sound and stable over the long term. They are usually smart investments at any time, especially in a developing market.

in the afternoon	Philip Morris	$98.42
LLY	Eli Lilly	$323.35
CVX	Chevron	$161.00
AVGO	Broadcom	$575.77
RTX	Raytheon	$98.74
V	Visa	$218.73
MDLZ	Mondelez	$65.17

Philip Morris (PM)

Philip Morris (NYSE:in the afternoon) is a leading tobacco company known for the largest brands of cigarettes. But since Philip Morris operates in a highly regulated industry and faces declining smoking rates, many investors could easily ignore it.

Nevertheless, the company is targeting the evolving tobacco industry with a strategy that gives it a significant advantage over its competitors. This positioning and the substantial dividend make PM stock very strong.

Let’s start with the Philip Morris dividend. It gives way around 5%, which is quite high. This dividend is also relatively stable, having last been reduced in 2008. In 2022, shareholders will receive $5.04 in dividend payments for each PM share owned. Analysts expect PM stock to rise to $111 in the next 12-18 months, but it’s currently trading around $100 per share. So, if analysts’ estimates are to be believed, the stock is poised for around 15% growth.

Philip Morris is banking on the growth of its smokeless tobacco brands, which have been profitable, while competitors rely more on cigarettes for revenue, even as smoking rates continue to decline.

Eli Lilly (LLY)

Investors should seriously consider this Eli Lilly (NYSE:LLY) stock. The company develops and sells medicines in various therapeutic areas, including diabetes, oncology and immunology. Currently, its diabetes drug Mounjaro has impressed investors.

Overall, Eli Lilly appeals to investors looking for exposure to the pharmaceutical industry and a steady source of income. Those considering Eli Lilly note that the company is a highly profitable, fast-growing, reliable dividend stock with a strong catalyst for future growth in Mounjar.

Eli Lilly boasts an exceptionally high profitability metrics in the drug manufacturing industry known for increased profitability. Its gross, operating and net margins exceed the 90th percentile of industry competitors. Additionally, the company’s cost of capital is 3.5%, while its return on capital is 21.55%.

LLY stock provides a modest forward dividend yield of around 1.4%. However, this distribution was last reduced in 1986, so it is reliable. Lastly is Eli Lilly seeking FDA approval to market the anti-diabetic drug Mounjaro for weight loss. Mounjaro sales fell short of expectations recently, but the company still beat expectations and could launch when and if Mounjaro receives FDA approval.

Chevron (CVX)

Chevron (NYSE:CVX) is an American multinational energy corporation that experienced a very strong year in 2022. The company is among the world’s largest producers of oil and natural gas. Although Chevron had a strong 2022, it is somewhat volatile due to challenges related to commodity price volatility and environmental concerns. But its dividends balance those concerns as a source of income. With the current lower price, Chevron looks like a buy.

The energy sector was the best performer in 2022. Oil companies, including Chevron, shell (NYSE:WENT), and ExxonMobil (NYSE:XOM) earned more than $132 billion in 2022, returns 78 billion dollars through buybacks and dividends. But investors have shied away from CVX, whose share price has fallen significantly recently. Concerns over environmental issues and the unclear situation in Ukraine are likely factors.

Still, 2022 showed that oil demand is likely to remain strong for a long time to come. This gives Chevron a strong catalyst moving forward as it continues to deliver returns to shareholders.

Broadcom (AVGO)

Broadcom (NASDAQ:AVGO) stock is a good choice for investors looking for semiconductor exposure and dividends. The company designs, develops and sells semiconductor and infrastructure software solutions. Its software is used in many industries, including telecommunications, data centers and enterprise software.

Broadcom offers investors growth and income. Currently, AVGO stock is currently trading at $575 and has an average target price $665. AVGO’s dividend yielded a total of 3.1% at last count $16.90 dividend per share last year. Assuming Broadcom continues to pay $4.60 quarterly through 2023, it will reward investors with $18.40 in dividends in 2023. So Broadcom’s value could rise to $683.40 per share, equivalent to a 14.86% increase.

The company will announce earnings again on March 2 after a strongly 2022 in which revenue rose 21% to $33.2 billion. Broadcom’s net revenue growth was even stronger in 2022, increasing by 70.65% to reach $11.495 billion.

Raytheon (RTX)

Raytheon (NYSE:RTX) stock represents a multinational aerospace and defense company that sells systems and services to commercial, military and government customers worldwide. Its products include anti-missile defense systems, radars and communication systems.

Raytheon has been paying dividends for decades. But it was reduced in 2021, so investors looking for an incredible increase should be careful. In any case, it provides reliable, albeit fluctuating, income to long-term investors.

The company has good growth prospects, including strong demand for arms orders related to the conflict in Ukraine. Additionally, given other geopolitical pressures coming from China and other regions, the company’s long-term outlook still has a lot to like. Although revenues related to the war in Ukraine have been significant, supply chain issues have hampered deliveries. This suggests that Raytheon could move higher if and when these issues are sorted out.

Raytheon expects honey 72 to 73 billion dollars in sales for fiscal 2023. That would represent between 7.3% and 8.8% top-line growth from its 2022 results. Indeed, I think these numbers should attract investors, as that growth rate would significantly exceed the 4- percentage growth of the company between 2021 and 2022.

Visa (V)

Visa (NYSE:V) is a multinational financial services company that provides payment processing and digital payment solutions for individuals and businesses worldwide. The company is best known for offering credit and debit cards, but also offers payment gateway and risk management services.

Visa shares include a dividend that yields a very modest yield 0.8%. So it will not provide substantial income or dividends to allow for any significant repurchase of shares upon reinvestment. Nevertheless, the company’s dividend is very reliable, having last been cut in 2008 and has increased by 17.4% over the past five years. In any case, Visa’s price advantage is the most attractive.

Companies Revenues in the first quarter increased by 12%, and cross-border travel is a bright spot. The volume of payments remained stable. Cross-border volumes increased by 22%, indicating that travel remains strong, although general economic headwinds remain significant. Visa also returned $4 billion to shareholders during that period.

Mondelez (MDLZ)

Last on this list of dividend stocks to buy is Mondelez (NASDAQ:MDLZ). This diversified consumer staples stock has impressive growth, a solid dividend, and finished 2022 on a strong note. These factors should interest investors in the snack company that sells Oreos, Wheat Thins, Chips Ahoy! and BelVita.

First, MDLZ stock has about a $10 upwards above the current price of $66, according to analysts. It’s among the dividend stocks I think are worth buying, despite its meager 2.3% yield. That’s because Mondelez has grown its revenue by 12.3% over the past five years. The math shows plenty of appreciation for investors willing to buy now.

Furthermore, Mondelez’s performance leading into 2023 only reinforces this notion. Revenues have increased Total 9.7% in 2022 and grew even faster in the fourth quarter, 13.5 percent.

Mondelez’s organic revenue growth reached 12.3% in 2022 and 15.4% in the fourth quarter. Its main brands are performing well and should strengthen investors’ confidence in MDLZ as an investment.

As of the date of publication, Alex Sirois did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are the subject of InvestorPlace.com Publishing Guidelines.