Stocks to buy

7 Dividend Stocks to Ride Out 2023’s Unpredictable Second Half

Generally, companies that provide passive income for stakeholders represent a balanced approach but for safe dividend stocks for 2023. The underlying concept has taken on greater importance. Fundamentally, investors really have no idea what might transpire over the second half.

Throughout much of last year and heading into this year, concerns centered on the Federal Reserve. With its aggressively hawkish monetary policy, the central bank aimed to curb the excesses associated with the post-Covid-19 response. However, many rightfully worried that the Fed could hike rates into a recession. If so, dividend stocks for unpredictable markets made sense.

By virtue of providing payouts to shareholders, companies must have profits to draw from. This framework implies that such enterprises enjoy established, predictable businesses. Moving forward, this predictability may be worth a significant premium. Thus, it’s important to strategize dividend investment opportunities now before the wave moves in.

Plus, with the latest interest rate hike, the fear that the Fed might fail in its efforts to facilitate gentle disinflation still rings uncomfortably loudly. Given this circumstance, investors should consider the below reliable dividend stocks to buy.

Agnico-Eagle Mines (AEM)

Source: Dmitry Lobanov/

Nothing glitters like gold which is why Agnico-Eagle Mines (NYSE:AEM) belongs on your list of safe dividend stocks for 2023. To be fair, precious metal enterprises tend to be more volatile than companies in other sectors. Nevertheless, gold represents a universal safe haven against uncertainty. Thus, I don’t buy into the yellow metal being a barbaric relic. It has its purposes, especially for a time such as this.

In terms of passive income, Agnico-Eagle carries a forward yield of 3.12%. That’s a bit higher than the materials sector’s average yield of 2.82%. In fairness, AEM’s payout ratio stands at 71.12%, which is a higher proportion of its earnings than I would like to see. Still, it’s not the worst payout ratio out there.

Just as importantly, Agnico-Eagle commands consistent profitability. In addition, its trailing-year net margin clocks in at 40.49%, above 92.6% of companies listed in the metals and mining industry. For those seeking dividend stocks for unpredictable markets, AEM has plenty to offer.

Nutrien (NTR)

Source: iQoncept/

For those who don’t mind contrarianism in their safe dividend stocks for 2023, Canadian fertilizer company Nutrien (NYSE:NTR) offers an enticing opportunity. Per its public profile, Nutrien is the largest producer of potash and the third largest producer of nitrogen fertilizer in the world. Unfortunately, geopolitical flashpoints disrupted the agriculture sector. Still, people must eat, which fundamentally protects NTR.

Speaking of protection, NTR also ranks among the relatively high-yield dividend stocks to consider. Right now, Nutrien carries a forward yield of 3.13%, above the materials sector average yield of 2.82%. Unlike Agnico-Eagle Mines, however, Nutrien benefits from a far lower payout ratio of 37.5%. As well, it features three years of consecutive dividend increases.

Regarding the financials, Nutrien brings holistic strengths. For example, its three-year revenue growth rate (per-share basis) comes in at 28.1%, above 75.12% of its peers. Its EBITDA growth rate during the same period impresses at 57.8%. Combined with its consistent profitability and trailing earnings multiple of only 5.32, NTR is one of the top dividend investment opportunities.

Mercer (MERC)

Source: Shutterstock

Headquartered in Vancouver, British Columbia, Canada, Mercer (NASDAQ:MERC) operates a timber business that spans three continents and encompasses four countries. While Mercer might not sound like an enthralling idea for safe dividend stocks for 2023, it might enjoy a surprising upside. After all, what’s everybody screaming about these days? You guessed it – a housing inventory shortage. So, if builders build, Mercer should benefit.

Regarding passive income, MERC represents somewhat of a mixed bag. On the attractive side, Mercer features a forward yield of 3.39%. Relatively speaking, it’s one of the high-yield dividend stocks as it conspicuously beats out the materials sector’s average yield. However, I must say that the payout ratio of almost 80% raises some eyebrows. Still, the pertinence of the underlying business may be worth a pass for some investors.

Financially, the company could use some shoring up of its balance sheet, I won’t lie. Still, it generates solid revenue and EBITDA growth. Also, its net margin of 5.77% ranks better than 64.56% of the competition.

Sonoco Products (SON)

Source: Shutterstock

Founded in 1899, Sonoco Products (NYSE:SON) is a U.S.-based international provider of diversified consumer packaging, industrial products, protective packaging, and packaging supply chain services. Moreover, Sonoco is the world’s largest producer of composite cans, tubes, and cores. Thanks to its broad relevancies, SON deserves consideration for safe dividend stocks for 2023.

On the passive income front, the company makes a very strong case for dividend stocks for unpredictable markets. Right now, Sonoco carries a forward yield of 3.47%. Again, this stat beats out the materials sector’s average yield by a fairly wide margin. Even better, the payout ratio sits at 34.37%, providing investors confidence regarding yield sustainability. Plus, the enterprise enjoys 41 years of consecutive dividend increases.

On the financial side, like some of the other ideas for dividend investment opportunities, Sonoco could use some work, particularly on the balance sheet. However, it features solid revenue growth and profit margins. Attractively, SON trades at a forward earnings multiple of 10.2, lower than 74.42% of sector rivals.

Exxon Mobil (XOM)

Source: Shutterstock

On the surface level, Exxon Mobil (NYSE:XOM) might not seem like a natural candidate for safe dividend stocks for 2023. After all, the ideological and political winds appear to significantly, and almost exclusively favor the electrification of mobility. However, the AP reports that due to a tough economic backdrop, consumers are holding onto their cars longer than ever. Mostly, we’re talking about combustion-powered cars, which obviously benefit hydrocarbon players like Exxon Mobil.

Even better, XOM makes a great case for high-yield dividend stocks. Presently, Exxon carries a forward yield of 3.49%. True, it’s a bit lower than the energy sector’s average yield of 4.24%. However, its payout ratio sits at 41.61%, providing confidence regarding yield sustainability. Also, the company enjoys 40 years of consecutive dividend increases.

On the financial front, Exxon enjoys significant strengths in the balance sheet. As well, its three-year revenue growth rate improved to 15.9% while its net margin stands at a very respectable 15.63%. Overall, XOM carries the makings of one of the reliable dividend stocks to trust.

Ternium (TX)

Source: Shutterstock

Dialing up the risk factor for safe dividend stocks for 2023, Ternium (NYSE:TX) is a manufacturer of flat and long steel products. According to its corporate profile, the company owns production centers in Argentina, Brazil, Mexico, Guatemala, Colombia, and the U.S. It’s also the leading steel company in Latin America with highly integrated processes to manufacture steel and value-added products.

While fundamentally risky, TX is also on the move. Since the start of the year, shares gained nearly 49% of equity value. Over the past 365 days, they’re up almost 26%. Even with that performance, Ternium carries a forward yield of 8.08%. In addition, its payout ratio – while elevated – stands at a manageable 56.68%.

Regarding the financials, arguably Ternium’s best strength is its balance sheet stability. Featuring a cash-to-debt ratio of 3.36x (better than 82.1% of the competition), the enterprise is positioned to handle market fluctuations. Also, it prints a net margin of 8.68%, outflanking 78.34% of its peers. Thus, it’s one of the dividend stocks for unpredictable markets.

British American Tobacco (BTI)

Source: Shutterstock

Perhaps the riskiest idea on this list of safe dividend stocks for 2023, British American Tobacco (NYSE:BTI) might seem a tad too much. To be blunt, the critics are right to harbor some hesitation toward BTI. According to a Reuters report, global smoking rates have been declining globally (with few notable exceptions) since 2007. On paper, such a framework doesn’t help British American Tobacco.

However, the company also pivoted toward vaporizers or e-cigarettes, which represents a booming industry. Therefore, it’s going to be difficult for some investors to overlook BTI’s forward yield of 8.25%. Even with a payout decrease, that’s well above the consumer staple sector’s average yield of 1.89%. Also, the payout ratio is elevated but manageable at 55.23%.

Financially, British American presents a mixed bag. On the negative side, its balance sheet stability is so-so. And its revenue growth could be improved. However, it’s a consistently profitable enterprise, commanding a net margin of over 31%. Finally, BTI trades at 6.99x forward earnings, ranking favorably lower than nearly 77% of its peers.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.