5 Dividend Stocks to Buy in 2019

Investors are often forced to choose between high dividend stocks and stocks with growth potential. It turns out that's just a myth, and the top dividend stocks to buy give you both.

And if that's what you're looking for, then we have you more than covered...

dividend stocks to buyWe're going to share all the details today about five stocks that not only reward shareholders with a dividend, but are also primed for double-digit stock price growth.

But before we reveal our top picks, we want to clear the air about some of the misconceptions about who should buy dividend stocks ...

Who Should Buy Dividend Stocks?

There's a common misconception that dividend stocks are only for retirees or income investors.

Yes, senior citizens may gravitate toward dividend-paying stocks because of their perceived safety and monthly or quarterly income payments.

But the truth is that everyone should own the right dividend stocks in order to take advantage of compounding their money.

Through dividend reinvestment programs (DRIPs), investors can increase the amount of shares they own without having to pay a dime. The payout from the dividend is used to buy more of the stock.

If the stock price goes up, you make even more money without having spent a dime on additional shares.

And over time, it really adds up...

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Reinvesting dividends in Procter & Gamble Co. (NYSE: PG) from Dec. 1, 2000, to Dec. 1, 2017, would result in a 285% return. In comparison, not reinvesting those dividends would be a return of 224.86%.

Yes, no one is complaining about a 224% return, but every $10,000 invested in P&G then was worth an extra $6,000 with the dividends reinvested.

When it comes to planning your financial future and retiring comfortably, every bit counts.

When Should I Buy Dividend Stocks?

Some investors try to time buying dividend stocks in anticipation of dividend hikes.

If a company has a history of increasing dividend payouts, an investor may feel tempted to buy the stock in hopes of earning extra income.

But that's not always going to work out.

Just ask shareholders of General Electric Co. (NYSE: GE).

GE increased its dividend payout from $0.23 in 2016 to $0.24 in 2017. However, the payout was cut to just $0.12 in December 2017. And on Oct. 30, GE CEO Larry Culp said he is slashing the dividend payout to just $0.01 per share.

That's why you should never buy a stock just because it pays a dividend.

Instead, focus on companies that have a solid business model that could lead to stock price appreciation AND companies that reward shareholders with dividend payouts.

We took care of all the tough work and found five companies that fit those criteria thanks to the Money Morning Stock VQScore™.

A VQScore of 4 or higher puts a stock in the "Buy Zone." These are stocks with breakout potential according to our proprietary algorithm.

And all of the stocks on our list have a score of 4.

These are the five dividend stocks that should be in every portfolio...

Dividend Stocks to Buy in 2019, No. 5: RCI Hospitality Holdings Inc.

Founded in 1982 in Houston, RCI Hospitality Holdings Inc. (Nasdaq: RICK) operates upscale adult nightclubs, restaurants, and sports bars.

As of November 2017, it operated a total of 45 live adult entertainment, restaurant, and bar operations.

And recently, RCI has been on an acquisition spree...

On Nov. 2, 2018, RCI acquired VIP's Gentleman's Club and its real estate in Chicago. The 10,000-square-foot club is one of only three in Chicago, and the only one with a full liquor license.

Then on Nov. 6, it acquired Blush Gentleman's Club & Sports Bar in Pittsburgh.

"With its ability to generate $3 million-plus annually in adjusted EBITDA, Blush is a profitable, cash-flowing number one club in a market that is home to great sports teams, leading universities, and well-established and emerging industries," CEO Eric Langan said in a Nov. 6 statement.

With more revenue sources, the company could make more money, attracting more investors and sending the stock price higher.

Analysts agree...

In the next 12 months, Sidoti Research projects that the RCI stock price will trade for $43 per share. From yesterday's (Nov. 15) price of $25.42, that's a potential profit of 69.15%.

Aside from the stock price appreciation, RCI pays its shareholders a dividend of $0.12, a yield of 0.46%. With RCI growing its holdings, we expect it will return even more cash to its shareholders as it grows.

Our next stocks boast even higher yields right out of the gate...

Dividend Stocks to Buy in 2019, No. 4: Arcos Dorados Holdings Inc.

Thanks to a technology push to make ordering easier and the introduction of all-day breakfast in 2015, McDonald's Corp. (NYSE: MCD) stock price has skyrocketed 91.85% over the last five years.

In comparison, the Dow Jones Industrial Average is up just 61.78%.

But because the MCD stock price is trading near its 52-week high price of $187, some investors may be waiting for pullbacks before buying shares.

Must Read: The Top 5G Stocks to Buy in 2019

However, there's a way to invest in McDonald's right now for less than $10 per share...

Arcos Dorados Holdings Inc. (NYSE: ARCO) is a Uruguay-based company that operates as a franchisee of McDonald's restaurants.

As of April 2018, it operated or franchised 2,100 McDonald's across Latin America and the Caribbean.

The Arcos stock price opened at $7.51 on Nov. 15, and analysts at Itau Securities believe that the ARCO stock price will climb to $11 per share in the next 12 months.

That's a potential profit of 46.47%, and Arcos also pays its shareholders a dividend of $0.10 a share (1.37% yield).

Dividend Stocks to Buy in 2019, No. 3: Ferrari NV

The Ferrari NV (NYSE: RACE) stock price has been on fire since spinning off from Fiat Chrysler Automobiles NV (NYSE: FCAU) in 2016.

And it offers shareholders a double-digit profit opportunity ahead that could soon turn into a triple-digit profit opportunity...

In its most recent earnings report, Ferrari grew net income 5% and shipments 11% year over year.
The key to that success has been the Ferrari Portofino.

It's a more cost-effective "entry model" the company began producing in 2018 that's aimed to attract a broader audience.

CEO Louis Camilleri said his customers become die-hard fans and eventually buy the high-margin special series or limited-edition models.

Those pricey editions can bring in big bucks, which is why analysts are expecting big things from Ferrari in 2019.

Consumer Edge Research projects that in the next 12 months, the RACE stock price will climb 43.51% from $109.75 to $157.51 per share.

Ferrari also pays shareholders a dividend of $0.85, which is a yield of 0.75%.

Dividend Stocks to Buy in 2019, No. 2: Johnson Outdoors Inc.

Johnson Outdoors Inc. (NASDAQ: JOUT) operates in the specialty retail market of diving, watercraft, and marine electronic products. It also provides maintenance and product repair and sells gear to resorts and armed forces.

You see, this is the type of business that can stand up to Amazon.com Inc. (NASDAQ: AMZN).

Amazon only has basic scuba diving equipment online, so professionals will continue to turn to Johnson Outdoors.

And the proof is in the sales...

  • Net Sales in 2015: $430,489
  • Net Sales in 2016: $433,727
  • Net Sales in 2017: $490,565

Sales increased 13% from 2016 to 2017, and compared to 2015, sales increased 13.95% in 2017.

Because of its niche market expertise, Johnson Outdoors could be a takeover target for a company like Dick's Sporting Goods Inc. (NYSE: DKS) or Walmart Inc. (NYSE: WMT) trying to bring in a new audience.

And when companies are being bought out, there is normally a quick stock price pop for shareholders. When reports came out on Nov. 13 that Buffalo Wild Wings could be sold, the stock price surged 25% the next day.

But even if there isn't an acquisition offer, analysts are still bullish on the JOUT stock price...

Imperial Capital believes that the JOUT stock price is going to jump from $69.06 to $110 per share in the next 12 months, which would be a gain of 59.28%.

The company also pays shareholders a dividend of $0.56 (0.78% yield).

Finally, that brings us to the top dividend stock to own in 2019...

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Dividend Stocks to Buy in 2019, No. 1: Keurig Dr Pepper Inc.

Keurig Dr Pepper Inc. (NYSE: KDP) may already be a household name, but what many investors don't realize is that this company pays investors a strong 2.10% dividend yield.

The merger of Keurig Green Mountain and Dr Pepper Snapple Group this past summer created North America's third largest beverage company.

Keurig Green Mountain was founded in Vermont in 1981, was publicly traded for a time, and then once again became a privately held entity.

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On July 9, 2018, Keurig Green Mountain paid $18.7 billion to acquire Dr Pepper Snapple Group, and the combined company was renamed Keurig Dr Pepper.

Some of the products produced by this combined group include Keurig brewers, K-cups, Green Mountain Coffee, Dr Pepper, Snapple, Canada Dry, Motts, and 7-Up.

After the acquisition, KDP expects that its adjusted earnings per share (EPS) will be between $1.02 and $1.07. Estimates from Wall Street analysts are for EPS of $1.03, so there is a good chance that results are going to exceed those expectations for the year.

This is something that can be a catalyst for share price gains.

But this is an excellent stock to buy for the long term too.

Keurig Dr Pepper has another perfect VQScore, making it a breakout candidate right now.

Susquehanna Financial Group predicts that the KDP share price will hit $32 over the next 12 months. This represents a gain of 16% from today's (Nov. 16) share price of $27.41.

But that's just in the short term, and keep in mind this company pays a generous dividend yield of 2.10%.

It could also be a prime acquisition target itself, which would send the stock price skyrocketing.

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