Top 3 Dividend Stocks to Buy in November

Despite a robust stock market rally, experts are urging caution and a more prudent investment approach in November. Therefore, fundamentally solid dividend-paying stocks Vodafone (VOD), W. R. Berkley (WRB), and CNA Financial (CNA) might be ideal buys this month. Read more...

The prevailing market turbulence has created difficulties for investors when selecting stocks. So, I'd recommend considering top dividend-paying stocks Vodafone Group Plc (VOD), W. R. Berkley Corporation (WRB), and CNA Financial Corporation (CNA) that prioritize longer-term investments, offering secure dividends and the potential for substantial capital growth.

The S&P 500 enjoyed its strongest weekly gain of the year, climbing 6% last week. This increase was fueled by a cooler-than-anticipated October jobs report, causing bond yields to drop.

However, JPMorgan's chief global markets strategist, Marko Kolanovic, predicts that last week's stock market rally is on the verge of losing momentum due to the Fed's longer-term rate stance, heavy valuations, over-optimistic earnings expectations, diminishing pricing power, threatened profit margins, and ongoing economic slowdown.

In addition, Wharton professor Jeremy Siegel urges the Federal Reserve to be more flexible and potentially consider interest rate cuts sooner than expected due to the threat of an imminent recession, weak economic data, and controlled inflation. While he's not predicting a recession, solid recent data, such as the low October ISM manufacturing index and underwhelming job additions in October, support his concerns.

Furthermore, dividend stocks offer reliable income and also act as a stable source of income during market uncertainties, providing financial security regardless of stock price fluctuations. Investors’ interest in dividend stocks is evident from the SPDR S&P Dividend ETF’s (SDY) 1.8% returns over the past month.

Considering the volatile market events, let us look at the fundamentals of three top dividend-paying stocks:

Vodafone Group Plc (VOD)

Based in the U.K., VOD is an international telecommunication services provider that offers mobile services, fixed line services, including broadband, television (TV) offerings, and voice, convergence services, digital services, the Internet of Things (IoT), and financial services, which complements its connectivity business.

VOD paid a $0.50 semi-annual cash dividend on August 4, 2023. The company pays a $0.99 per share dividend annually, translating to a 10.19% yield. Its four-year average dividend yield is 7.14%.

For its fiscal 2023 first quarter ended June 30, 2022, VOD’s total revenue amounted to €10.74 billion ($11.53 billion). Service revenue from Italy rose 3% year-over-year to €1.40 billion ($1.50 billion).

VOD’s revenue for its fiscal year ended March 31, 2023, amounted to €45.71 billion ($49.07 billion), up marginally year-over-year. The company’s gross profit was €14.86 billion ($15.95 billion).

Street expects VOD’s EPS and revenue to amount to $0.62 and $46.12 billion in the fiscal year ending March 2024.

Over the past month, the stock has gained 4.7% to close the last trading session at $9.76.

VOD’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated considering 118 different factors, each weighted optimally.

It has a B grade for Value, Sentiment, and Stability.  VOD is ranked #16 of 44 stocks in the A-rated Telecom – Foreign industry.

To see VOD’s additional ratings for Growth, Quality, and Momentum, click here.

R. Berkley Corporation (WRB)

WRB is an insurance holding company that operates as a commercial lines writer in the United States and internationally. It operates in two segments, Insurance; and Reinsurance & Monoline Excess.

On October 4, WRB paid a special cash dividend on its common stock of 50 cents per share. Together with the 50 cents per share special dividend that was paid on January 24, 2023, this will bring special cash dividends paid during 2023 to $1 per share.

In addition, the company paid a regular quarterly cash dividend on its common stock of 11 cents per share. WRB’s dividend payouts have grown at a CAGR of 11.1% over the past three years.

It pays $0.44 annually as dividends, which translates to a yield of 0.65% on the current market price. It has a four-year average dividend yield of 1.91%. The company has raised its dividends consistently for the past 17 years.

During the fiscal third quarter ended September 30, 2022, WRB’s return on equity came in at 19.8%, compared to 13.8% in the year-ago quarter. The company’s net premiums written increased 10.5% year-over-year to $2.85 billion. Also, its total revenues increased 11.2% year-over-year to $3.03 billion.

The company earned net premiums of $2.64 billion, up 8.2% from the previous-year quarter. Its net income to common stockholders rose 45.7% and 49.4% year-over-year to $333.59 million and $1.23 per share.

WRB’s EPS is expected to increase 17.8% year-over-year to $1.37 in the fiscal fourth quarter ending December 2023. Its revenue is expected to increase 7.2% year-over-year to $2.69 billion in the same quarter. It surpassed consensus EPS estimates in three of the trailing four quarters, which is remarkable.

Over the past three months, the stock has returned 11% to close the last trading session at $68.19. It has soared 17.2% over the past six months.

It’s no surprise that WRB has an overall B rating, which translates to a Buy in our POWR rating system.

It has an A grade for Momentum and a B for Sentiment and Stability. Within the Insurance – Property & Casualty industry, it is ranked #9 out of 55 stocks.

Click here to see the other ratings of WRB for Value, Growth, and Quality.

CNA Financial Corporation (CNA)

CNA provides commercial property and casualty insurance products. It operates through Specialty; Commercial; International; Life & Group; and Corporate & Other segments.

On October 30, CNA declared a quarterly dividend of $0.42 per share, payable on November 30, 2023. Over the last three years, CNA’s dividend payouts have grown at a 5.8% CAGR. Its four-year average dividend yield is 8.20%, and its forward annual dividend of $1.68 per share translates to a 4.20% yield.

CNA has raised its dividend payouts consistently for the past six years.

CNA’s net earned premiums increased 8% year-over-year to $2.22 billion for the third quarter ended September 30, 2023. Its net earned premiums from the Property & Casualty segment rose 9.1% year-over-year to $2.30 billion. Its core income increased 572% year-over-year to $289 million.

Analysts expect CNA’s revenue for the fourth quarter ending December 31, 2023, to increase 10.2% year-over-year to $3.46 billion. Its EPS for the same quarter is expected to increase 6.6% year-over-year to $1.08. The company has surpassed the EPS and revenue estimates in three of the trailing four quarters.

Over the past month, the stock has gained 1.8% to close the last trading session at $39.91.

CNA’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.

In addition, it has an A grade for Stability and Momentum. Within the Insurance – Property & Casualty industry, CNA is ranked #7 among 55 stocks.

In addition to the POWR Ratings stated above, one can access CNA’s Growth, Value, Sentiment, and Quality ratings here.

What To Do Next?

43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.

2024 Stock Market Outlook >

VOD shares were trading at $9.65 per share on Tuesday morning, down $0.11 (-1.13%). Year-to-date, VOD has gained 0.27%, versus a 15.37% rise in the benchmark S&P 500 index during the same period.

About the Author: Kritika Sarmah

Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.


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