Top 3 Dividend Stocks to Buy in March

Investing in dividend stocks can be a lucrative strategy, especially when you choose solid companies that consistently pay high-yield dividends. While these stocks may not always provide the same thrill as high-flying growth stocks or deep value plays, simplicity often proves to be more effective. Reinvested dividends can significantly compound the growth of your stock holdings over time, ultimately translating into a substantial stream of passive income when you decide to start tapping into those payouts.

Why Choose Dividend Stocks?

Dividend-paying companies don’t necessarily need to outperform their sectors to maintain and grow their dividends. A prime example is the pharmaceutical giant Pfizer (NYSE: PFE), which is widely recognized for its COVID-19 vaccine. However, investors have known Pfizer long before the pandemic as a reliable dividend payer. By the end of 2024, Pfizer increased its payout and declared its 345th consecutive quarterly dividend, marking an impressive 86 straight years of dividend payments. Notably, Pfizer has also raised its dividend for 16 consecutive years.

Pfizer’s Growth and Dividend Stability

The COVID-19 vaccine undoubtedly led to a surge in Pfizer’s fortunes, but as the pandemic subsided, investors began to question the company’s future. In 2023, Pfizer made headlines by acquiring Seagen, a prominent biopharma company specializing in cancer treatments, for $43 billion. This acquisition has instilled confidence in management, suggesting that Pfizer could produce as many as eight breakthrough drugs by 2030. Furthermore, management anticipates that Seagen could contribute an additional $10 billion to its sales by 2030.

Fortunately for investors, Pfizer continues to generate sufficient cash flow to support its dividend payments. In 2024, the company paid out $9.5 billion in dividends while generating over $9.8 billion in free cash flow, excluding $3 billion from the sale of its stake in British pharmaceutical company Haleon. Management’s confidence in its cash-flow generation capabilities is evident, as the company recently announced a dividend hike.

Verizon Communications: A Reliable Dividend Player

Another strong contender in the dividend stock arena is Verizon Communications (NYSE: VZ). This U.S. telecommunications giant has built a solid reputation as a dependable dividend stock, having increased its quarterly dividend for 18 consecutive years. Currently, Verizon offers an attractive yield at its current share price. Although the stock has experienced a decline of about 23% over the past five years, contributing to its high yield, the company appears to be on the path to recovery.

Verizon’s Growth Strategy

Verizon’s fourth-quarter results exceeded analysts’ expectations, and the company successfully grew its wireless postpaid phone subscribers—its highest-spending segment—by 568,000, surpassing Wall Street’s prediction of 479,000. Additionally, Verizon is accelerating its growth strategy in the fiber-optic sector, having announced the acquisition of Frontier Communications in September for $20 billion. This deal will add 2.2 million fiber customers to Verizon, bringing its total fiber customer count to approximately 10 million.

The dividend remains secure, as Verizon generates more than enough free cash flow to cover its current payout. In 2024, the company paid $11 billion in dividends while generating $18.7 billion in free cash flow. Looking ahead to 2025, management anticipates a slight dip in free cash flow to $18 billion at the midpoint of guidance, but this still leaves ample cash to sustain and grow the dividend.

Realty Income: The Monthly Dividend Company

Lastly, we have Realty Income (NYSE: O), often referred to as the “Monthly Dividend Company.” Realty Income is known for its commitment to providing reliable monthly dividends to its shareholders. The company primarily invests in commercial properties that are leased to tenants under long-term agreements, ensuring a steady stream of rental income.

In conclusion, investing in dividend stocks like Pfizer, Verizon, and Realty Income can provide a reliable source of income and potential growth. As you consider your investment strategy for March, these three companies stand out as excellent choices for dividend investors.