3 Top Dividend Stocks to Buy in September

Choosing the right dividend stocks is not just about high yield but about choosing companies that pay consistent dividends even when the business hits a rough patch. That is why Chevron (CVX), Realty Income (O), and NextEra Energy (NEE) stand out heading into September. They operate in different industries but each company offers reliable and consistent dividends while still leaving room for earnings and cash flow to grow. All three have also earned status as “Dividend Aristocrats,” having increased their dividends for more than 25 years in a row.

Dividend Stock #1: Chevron (CVX)

Chevron has the most cyclical business among the three dividend stocks on this list. Chevron is an energy company that explores, produces, transports, refines, and sells oil and natural gas. Its earnings ultimately depend heavily on oil and gas prices. Still, the company has built a remarkable record of consistent dividend increases for 39 years. 

Currently, Chevron pays a quarterly dividend of $1.78 per share, or $7.12 annually, which results in a forward dividend yield of 3.5%. Chevron’s consistent performance also supports its dividend payout ratio of 65.1%.

In the second quarter, the company generated $12 billion in adjusted net income. The Hess acquisition, in particular, is allowing the company to get more production from a larger asset base while also extracting synergies from the deal.

Chevron also generated $19.7 billion from cash from operations and $15.4 billion in free cash flow. This financial flexibility allowed it to reduce total debt by $8.4 billion as well as pay $3.5 billion in dividends and repurchase shares worth $3.1 billion.

Being exposed to commodity prices, CVX stock may not be the safest income stock, but it is an interesting choice for those who want income plus meaningful exposure to the energy sector. On Wall Street, Chevron stock has a consensus “Moderate Buy” rating. Of the 26 analysts covering the stock, 17 have a “Strong Buy” rating, three have a “Moderate Buy,” five have a “Hold” rating, and one analyst has a “Strong Sell" rating. 

Dividend Stock #2: Realty Income (O)

The second dividend stock on my list is a pure-play income stock, which is otherwise known as the “Monthly Dividend Company.” Realty Income is a real estate investment trust (REIT) that owns commercial properties and collects rent from tenants. It holds more than 15,500 properties across the United States, the United Kingdom, and eight countries in Europe. As a REIT, it is legally required to distribute a substantial portion of its cash flow to shareholders, and unlike most companies, Realty Income pays dividends monthly.

In August, Realty Income declared its 674th consecutive monthly dividend, set at $0.271 per share. The company has also increased its dividend for more than 31 consecutive years. The annualized dividend represents a yield of roughly 5.2%.

To understand if a REIT can continue to afford its dividends, investors should check if its adjusted funds from operations (AFFO) is growing. In the second quarter, Realty Income’s AFFO increased nearly 4% year-over-year (YOY) to $1.09 per share. The company expects 4% growth in AFFO for the full year. 

The monthly payments, long dividend record, and expanding property portfolio make Realty Income a natural candidate for an income-focused portfolio. On Wall Street, O stock has a consensus “Moderate Buy” rating overall. Of the 24 analysts covering the stock, six have a "Strong Buy," one has a "Moderate Buy," 16 analysts have a "Hold" rating, and one has a “Strong Sell" rating.

Dividend Stock #3: NextEra Energy (NEE)

NextEra Energy is an energy company that generates and sells electricity through its utility business and develops renewable energy projects, including wind, solar, and battery storage. NextEra’s dividend yield is lower than that of Realty Income and Chevron, but it offers exposure to a combination of regulated utility earnings and long-term growth in electricity and energy infrastructure.

NextEra currently pays a quarterly dividend of $0.623 per share, equivalent to roughly $2.49 annually, which puts its yield near 3%. But NextEra has also consistently paid and increased its dividend for the past 31 years. Furthermore, the company expects dividend-per-share growth of roughly 10% annually through 2026, based on its 2024 dividend, followed by 6% annual growth from the end of 2026 through 2028.

The company’s earnings growth supports its dividend payout ratio of 60.7%. In the second quarter, adjusted earnings of $1.15 per share increased from $1.05 a year earlier. The artificial intelligence (AI) boom has brought a change in electricity demand. NextEra has multiple ways to participate in that demand, from regulated utility infrastructure to renewable generation, storage, and other energy projects. The company expects a roughly 8% increase in adjusted EPS annually through 2032.

Overall, Wall Street gives NEE stock a consensus “Moderate Buy” rating. Of the 20 analysts with coverage, 11 have a “Strong Buy" rating, eight suggest a “Hold,” and one analyst has a “Strong Sell" rating.