2 No-Brainer Dividend Stocks to Buy Right Now

There's never been a better time to warm up to dividend stocks. Fixed income rates are dropping, but there are plenty of quality companies paying out chunky distributions. Let's go over some of these no-brainer investments that also happen to be in my income-generating portfolio.

I own shares in Verizon Communications (NYSE: VZ) and Upbound (NASDAQ: RCII). These two high-yielding stocks have their risks. You don't get yields on companies north of 7% without accepting the risks. However, I think they are both dividend stocks worth buying right now.

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1. Verizon

There is good news, bad news, and great news when it comes to Verizon. The good news is that the wireless carrier giant servicing 146.1 million consumer and business accounts pays out a juicy 7% yield at current levels. That is the highest dividend among the 30 stocks making up the Dow Jones Industrial Average (DJINDICES: ^DJI).

The bad news is that this isn't a hotbed of top-line growth. Verizon has failed to top 6% in annual revenue growth in each of the past 16 years, including four years of small declines. Despite investing in infrastructure upgrades and rolling out 5G technology to its customers, Verizon's top-line gain rarely exceeds inflation in any given year. Analysts do not expect Verizon to discover the accelerator pedal anytime soon, targeting revenue to rise between 1% and 3% over the next four years.

The great news is thankfully a longer list. Let's start with the quarterly distributions. When Verizon hiked its payout in September, it stretched its streak of annual increases to 19 years. Verizon is good for the money. Its normalized net margin has clocked in north of 10% for 11 consecutive years. Finally, a double-digit achievement for Verizon!

Verizon is also attractively priced here. You can invest in Verizon for less than 9 times trailing earnings and 8 times forward earnings. Now there are some single-digit figures you can get excited about. The smartphone isn't going away. Thankfully, Verizon doesn't seem like it's going away anytime soon, either. The same goes for the generous distributions. Its trailing dividend payout ratio is just 58%, so you can expect its streak of hikes to stretch to 20 years later this year.

2. Upbound

The highest dividend payer on this list is also -- not surprisingly -- the riskiest. You will have to decide if the hurdles are worth Upbound's eye-popping 8.8% yield. The company, formerly known as Rent-A-Center until rebranding its corporate moniker three years ago, has been a bit of a dud. The shares have fallen nearly 40% over the past year, so those chunky quarterly disbursements aren't making much of a difference to the overall return.

Upbound was a rebranding in early 2023, not a mandate for the stock's direction. The business is still helmed by Rent-A-Center, the lease-to-own furniture, electronics, and appliances specialist with 1,700 locations across North America. The chain has been in business since 1973, helping folks who are light on funds or credit fill out their homes. However, it has also strategically expanded its reach in recent years. In 2021 it acquired Acima, a tech company that helps other businesses manage lease-to-own options. It also has Brigit, a well-rated financial app for folks seeking to improve their credit with more than 12 million users.

The biggest risk for Upbound is that its customers are naturally at the lower end of the credit score spectrum, a group that will bear the biggest impact in the economic downturn. You will want to repeat that last line a few times before going ahead with a potential purchase. The upside to Upbound is that it continues to grow. Revenue has been rising in the high single digits, and its profitability is also expanding. It has increased its dividend five times since reinstating the payouts in late 2019. Upbound has also topped expectations every quarter over the past year. The stock has been held back by concerns of a recession, but that could already be priced into the shares at today's entry point.

Upbound is trading for 4 times trailing adjusted earnings, and analysts see double-digit bottom-line growth in the year ahead. If that seems to be too good to be true, you're right. Like many of its customers, Upbound is juggling a bit of debt. However, even if you go by enterprise value instead of market cap, the forward P/E ratio is just shy of 10. It's a risk I'm willing to take, but know that it's a substantial consideration for a turnaround opportunity.

Rick Munarriz has positions in Sirius XM, Upbound Group, and Verizon Communications. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.