3 Top Dividend Stocks to Buy in October

If it seems like now's a good time to start playing a little less offense and a little more defense, you're not wrong. Huge gains from the so-called "Magnificent Seven" growth stocks have pumped their average forward-looking price-to-earnings ratio up to just over 30, according to Yardeni Research, dragging the S&P 500's forward-looking P/E ratio to over 22. Both are near or at or multiyear highs, leaving many of these stocks vulnerable to setbacks.

Most dividend stocks, on the other hand, are priced at the other end of the valuation spectrum, cheap due to the overwhelming interest in growth names. So, if you're looking for a bargain as well as a means of offsetting much of the impact of any marketwide weakness, dividend stocks fit the bill.

And the prospect of continued interest rate cuts only bolsters this bullishness. As interest rates move lower, prices of dividend stocks tend to go up, which means lower yields. You'll just want to be sure you're already holding these income payers before a series of rate cuts rather than after; the market may even price these dividend-paying tickers appropriately in mere anticipation of falling interest rates.

Here's a rundown of three great dividend stocks to buy this month before anything else changes any more than it already has.

JPMorgan Chase

Even if you only keep loose tabs on JPMorgan Chase (NYSE: JPM) you likely know this stock's up an impressive 200% from 2022, and is now well into record territory. And yet, even with this prolonged run-up the stock's forward-looking dividend yield is healthy at just under 2%.

The yield isn't the only reason you might want to step into a stake in this company sooner rather than later though. It's just an additional benefit. See, this ticker's (not so) slow advance from its 2022 low isn't just a stroke of luck. It's a message.

Despite all the naysaying headlines since then -- as well as the doubts about the planet's foreseeable economic future still in circulation -- the global economy as well as the stock market continue to climb a wall of worry. The recession that the inverted yield curve was supposed to predict? It never happened. The United States' GDP growth suffered a slight lull in the first quarter, but snapped back to annualized growth of 3.8% in Q2. The Federal Reserve Bank of Atlanta (which is the branch that handles most of the domestic GDP analysis and outlooks) believes the U.S. economy experienced the same pace of growth in Q3. In the meantime, the rest of the world still seems to be humming along, sidestepping most of the impact of the United States' newly imposed tariffs by doing more business with other trade partners.

Great, but what's this got to do with JPMorgan?

Global economic health is always good for the banking business, but particularly one like JPMorgan that enjoys a fair amount of international exposure. Indeed, although it doesn't account for the lion's share of JPMorgan's top and bottom lines, Goldman Sachs as well as JPMorgan itself expect next year to be a huge one for mergers, acquisitions, and public offerings following an unexpectedly healthy first half of 2025. Goldman believes the world will see this year's likely $3.1 trillion in dealmaking soar to a record breaking $3.9 trillion in 2026, in fact, driven by lower interest rates.

This growth of the industry's underwriting and advisory businesses should more than offset the margin-crimping impact that lower interest rates have on banks' more conventional business lines. This tailwind is what JPM stock's continued rally has quietly been predicting all along. But there's still room for more upside.

BlackRock

You may know BlackRock (NYSE: BLK) as the manager of the iShares family of exchange-traded funds. It's so much more though. Private equity, consulting, and data analytics technology are all in its wheelhouse. All of these businesses generate recurring revenue, of course, which is ideal for any dividend-paying company. That's how BlackRock's been able to raise its stock's annual dividend payout every year since 2010, and at least maintain its payout in a challenging 2009 in the midst of the subprime mortgage meltdown. Newcomers would be plugging in while the forward-looking yield stands at 1.8%.

As is the case with JPMorgan Chase though, this decent dividend -- and its sustainability -- isn't the only reason you might want to buy a stake in BlackRock now. It's not even the overwhelmingly biggest reason. The chief reason to invest in BlackRock, rather, is that it's a growth stock that also dishes out a little income to patient long-term shareholders. For perspective, the company is on pace to grow its top line to the tune of 15% this year, and then pump it up by another 14% next year.

How is this investment management firm able to do what so many of its peers aren't?

Don't look for a quantifiable reason. You won't find it. Instead, just understand that BlackRock has a knack for leveraging its name and capitalizing on ideas in ways that rivals wouldn't even think about. For example, early last month the company announced a partnership with the government of Paraná, Brazil to attract more foreign investors in the region. It's the sort of ambiguous opportunity that most other investment management outfits either wouldn't or couldn't even try to tackle. BlackRock regularly does this sort of unconventional dealmaking with tremendous success though. Shareholders reap the benefits.

Waste Management

Finally, add garbage-hauling Waste Management (NYSE: WM) to your list of dividend stocks to buy in October while it's down 10% from its June peak. That may be all the discount you're going to see here for a while.

The business itself is anything but exciting. Don't mistake a lack of pizzazz with a lack of long-term upside, however. Getting rid of garbage is one of the few industries that is not only recession-proof, but will also never succumb to obsolesce. As long as there are consumers, they'll be throwing trash away.

That being said, the business is more lucrative than you might imagine largely because it's increasingly required to be more and more reflective of sociocultural needs. Waste Management now offers disposal services for medical waste, for instance, as well as shredding services for documents that must be destroyed in order to protect confidential information. It's also the nation's biggest recycler of plastic, paper, and organic material (food), helping reduce mankind's net carbon footprint. Waste Management is even turning the methane created by buried into clean natural gas that powers its garbage trucks.

The kicker: It doesn't seem like it should matter much in this particular business, but this company's leading share of the waste disposal markets provides it with an unfair advantage by virtue of its deeper pockets, a greater economy of scale, and a sheer marketplace presence it can leverage when attempting to win new contracts.

More important to interested investors, the organization is reliably and increasingly profitable. That's how the company's managed to raise its per-share payout every year for the past 22 years. And by more than a little. The current quarterly payment of $0.825 is 77% better than what it was just five years ago, and 120% better than the dividend it was dishing out every quarter a decade ago.

This strong pace of dividend growth makes its below-average forward-looking yield of 1.5% worth it.

JPMorgan Chase is an advertising partner of Motley Fool Money. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group and JPMorgan Chase. The Motley Fool recommends BlackRock and Waste Management. The Motley Fool has a disclosure policy.