Best Dividend Stocks to Buy & Hold in 2021

 We're extremely excited to present you with our Top 4 Dividend Stocks of 2021 below! With inflation up in the air, the market swinging up and down weekly, it is a good time to be defensive and have some stocks in your portfolio that can protect you against any downside! Not only can high dividend value stocks do this but they can also provide you with stable income. Please keep in mind, that growth stocks often do not pay you any dividend at all!

When looking at one of our favorite dividend stocks below, Vale, note that they have a dividend yield of $7.34% This yield means that they will pay you 7.34% of your investment (annually) just to hold the stock!

This means that if you invest $10,000 in Vale, you'll receive $734 each year completely risk free, no strings attached.

If you choose to re-invest those dividends back into the stock, you'll be taxed at a low rate and have compounding growth! Now pair that with a company that is growing as well and you have an opportunity to get upside by taking less risk than most investments in your portfolio. If the market averages 10% returns every year, by holding this stock you have a really good opportunity to match or exceed that at low risk levels. Therefore as wise investors, we often hold a portion of our portfolio in stocks like these. While they will trail growth stocks in up markets they often outperform those same stocks in down markets. This allows us to minimize volatility, get income and still capture upside.

Choosing stocks is one half of the battle. The other half is constructing your portfolio!

This is a concept called portfolio diversification and it is something that every single portfolio manager in the world deploys. Please see the note below on what this concept means and how it works!

So with that context on why dividend stocks are so important, here is our top 4 picks in this category for 2021!

1) Stock: Vale (VALE); Price Target: $27; Dividend Yield: 8.93%

Vale is a top pick for us for so many reasons! Not only are they growing, as they're up 100% in the last year, but they also pay up a massive dividend. The combination of growth, theme and income is second to none. This is one of our top picks in 2021 and beyond and we're excited to share it with you! The greatest part about this list however, is that the hits keep on coming.

2) Stock: Merck & Co (MRK); Price Target: $90; Dividend Yield: 3.4%

Up next we have Merck. Merck is a giant in the healthcare sector and is a relatively stable company. Only up 40% in the last 5 years, Merck does not represent a good growth play but their annual dividend is a great way to get paid for taking on little risk. If you have excess cash in your portfolio and need a place to hold it until making your next big play, MRK is a great way to get paid, combat inflation and diversify your portfolio. Not every stock will be a 100x'er and that is okay but stocks like this are extremely valuable in your portfolio.