The Motley Fool

2 top dividend stocks that I’d buy for October

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

A person holding onto a fan of twenty pound notes
Image source: Getty Images.

Over the course of September, the FTSE 100 average dividend yield has risen. It currently sits at 3.5%. So, as we go into October, there are several top dividend stocks that I’d consider buying with cash that I have ready to invest.

A defensive top dividend stock

First up is National Grid (LSE:NG). The company delivers electricity and gas to UK customers, being one of the largest providers in this space. It also has some operations in the US. The share price is up 5% over the past year, but a 6.5% fall over the past month has helped to push the dividend yield up to 5.47%

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

As a utility company, I think this is a good addition to my portfolio with the current state of the stock market. Jitters that are present could see a nervous Q4 in the markets. Therefore, having a defensive stock like National Grid in my portfolio should help to protect me.

I think the outlook is positive for the company. At the start of September, it received clearance from the Competition and Markets Authority (CMA) to buy Western Power Distribution. This is the largest electricity distribution business in the UK, making it of strategic importance for National Grid going forward.

One risk to this top dividend stock is the current issues with rising energy prices in the UK. Spikes in commodity prices could negatively impact the company depending on how it plans to pass on rising costs.

A strong yield and share price growth

Another company I’m considering to buy in October is Aviva (LSE:AV). I wrote about this stock earlier this summer, as one of the top dividend stocks in the FTSE 100 at the time. I still think this is the case. It currently has a yield of 5.32%, with the share price up 36% over a one-year period. 

Aviva is a UK-based insurance provider but also offers savings and other retirement products. Having once spanned many geographical regions, the business has trimmed down operations to focus on key markets. Ultimately, this will be the UK, Ireland and Canada.

I think this outlook is positive for the company as it will allow the business to better service these markets. I also think this can help my dividends going forward. Excess cash from sales of other Aviva businesses could be returned as special dividends in the future. I’ll also be able to benefit from the above average dividend yield irrespective of special dividends.

A risk here is that the company is trying to rebrand, which always carries uncertainty. The new brand, “it takes Aviva”, will see a change of direction with its marketing. It’s too early to tell whether the focus and pivot of the overall business is working. If it doesn’t, then another strategy rethink will be needed.

Overall, I’d consider investing in both firms as top dividend stocks for October.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies still trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

jonathansmith1 has no position in any share mentioned. The Motley Fool UK has recommended National Grid. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.