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9 Top Dividend Stock Picks

We take a look at the yield-rich utilities sector, Big Tobacco, and the major integrated oil group.

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Susan Dziubinski: Hi, I’m Susan Dziubinski with Morningstar.com. As the year comes to a close, we decided to pull together some of our best dividend-stock ideas from the past few months. First, we'll take a look at the yield-rich utilities sector. The sector is pricey. But we do think there are some good yield plays.

Travis Miller: Utilities are a sector that investors often turn toward for yield, but we also think that investors should be cognizant of valuations. Right now on the yield front, when you look at 10-year U.S. Treasuries below 2% and the U.S. dividend yield for utilities above 3%, utilities look like an attractive yield option. However, valuations are extremely rich. Price/earnings multiples, price/book multiples are all well above three-year decade averages. Even we think the sector is well overvalued. Although it started the year at fairly valued, we think utilities are now 13% overvalued given the run that they've had in 2019. 

Susan Dziubinski does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.