3 Top Dividend Stocks to Buy in October and Hold for Decades to Come

As interest rates decline, income-focused investors are turning to dividend stocks to meet their income needs. This article highlights three top dividend stocks that offer high yields, strong fundamentals, and long-term growth potential.


1. Enbridge (ENB)
Enbridge is a diversified Canadian energy company with a strong track record of dividend growth. The company operates a vast network of pipelines, utility businesses, and renewable energy projects. Its stable earnings and consistent cash flow make it an attractive choice for income investors.

Enbridge's current dividend yield stands at 6.5%, making it one of the highest-yielding stocks in the energy sector. The company has raised its dividend annually for the past 28 years, demonstrating its commitment to returning value to shareholders. Enbridge's dividend payout ratio is a manageable 65% of forecasted 2024 cash earnings, indicating that the dividend is financially secure.


Enbridge's business model benefits from lower interest rates, as the company frequently borrows to fund significant capital investments. The lower rates will make Enbridge's debt cheaper, further enhancing its financial stability.

2. AT&T (T)
AT&T is a U.S. telecom giant that has cleaned up its act after a decade of expensive acquisitions. The company has spun off its media assets and is now focusing on its core wireless communications business. AT&T's dividend yield of 5% is well-supported by healthy financials, with a dividend payout ratio of just over 40%.

AT&T anticipates approximately $18 billion in free cash flow this year, while its dividend costs are just $2 billion per quarter or $8 billion annually. The company is expected to grow earnings by an average of almost 3% annually over the next three to five years. Lower interest rates could add further upside to earnings growth if AT&T can refinance some of its debt at lower rates.


3. Dominion Energy (D)
Dominion Energy is an electric and gas utility company that has undergone significant changes, selling off most of its oil and gas businesses to concentrate on operating as a regulated electric utility. U.S. electricity demand is estimated to grow by approximately 27% from 2022 levels by 2050, which helps explain Dominion's decision to align itself this way.

Dominion plans for $43 billion in capital investments and annual earnings growth between 5% and 7% from 2025 to 2029. The company's dividend yields 4.7% and remains a priority despite its massive spending plans. Management is not planning to raise the dividend until the company's payout ratio improves, but long-term growth should eventually get the dividend moving higher again.


These three dividend stocks offer high yields, strong fundamentals, and long-term growth potential. Income-focused investors seeking stability and growth should consider adding these stocks to their portfolios. As interest rates continue to decline, these dividend stocks will remain attractive options for meeting income needs and building long-term wealth.