Dividend Stocks: How To Invest & 7 High-Yield Options for September

When the stock market feels uncertain, many investors look for stability and income. Dividend stocks offer both — they provide regular payouts while still giving you exposure to potential long-term growth.

At CreditVana, we believe income-generating investments should be part of a smart, balanced portfolio. Here’s a look at the top high-dividend stocks this week, how dividend investing works, and whether it’s right for you.

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Top 7 High-Dividend Stocks (As of Sept. 2, 2025)

Source: Finviz. Data current as of September 2, 2025. For informational purposes only.

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What Makes a “Good” Dividend Stock?

The best dividend stocks aren’t just the ones with the highest yields. A yield that looks too good to be true might signal trouble. For example:

• A falling share price can artificially inflate the yield.

• Companies that pay out more than they earn (a payout ratio above 100%) may end up cutting dividends in the future.

Instead, focus on:

• Well-established companies with a history of consistent or growing payouts.

• Dividend aristocrats — companies in the S&P 500 that have increased dividends for 25+ years straight.

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Dividend Stocks vs. Dividend Funds

You can invest in dividends two ways:

1. Individual Dividend Stocks

   • Build your own portfolio stock by stock.

   • Potentially higher yields and lower costs.

   • Requires more research and monitoring.

2. Dividend Funds (Index Funds or ETFs)

   • Provide instant diversification across many dividend-paying companies.

   • Pay out dividends regularly.

   • Safer if one company cuts its payout, since others in the fund offset the loss.

💡 CreditVana Tip: Many investors start with dividend ETFs for simplicity, then add a few hand-picked dividend stocks for extra yield.

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How to Invest in Dividend Stocks

Step 1: Open a Brokerage Account

You’ll need an account to buy stocks or ETFs. Most online brokers let you open one in about 15 minutes.

Step 2: Find Dividend Stocks

Use free screeners from your broker or financial sites. Start by comparing yields within the same industry.

Step 3: Evaluate Safety

• Dividend yield: Caution with yields above 10%. They may be unsustainable.

• Payout ratio: Ideally under 80%. Anything above 100% is a red flag.

Step 4: Decide Allocation

Balance your portfolio. For example, don’t overload on one sector like energy or real estate. Spread investments across industries.

Step 5: Reinvest or Take Income

You can reinvest dividends to grow your portfolio faster (compounding) or take them as cash for regular income.

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Why Dividends Matter

Dividends add meaningful value to your long-term returns. Historically, the S&P 500’s total annual return (including dividends) has averaged about 2 percentage points higher than its price-only return.

For example:

• A $5,000 investment at 6% annual growth = $16,000 after 20 years.

• Add dividends for an 8% annual return = $24,000 after 20 years.

That’s the power of reinvesting income.

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Tax Considerations

Remember:

• Dividends in taxable accounts are taxed in the year you receive them.

• If you’re in a high-income bracket, dividend stocks may be less tax-efficient than growth stocks (which are taxed mainly when sold).

• Holding dividend funds in retirement accounts (401k, IRA) can help defer taxes.

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CreditVana’s Take

Dividend investing can be a great way to balance growth with income, but don’t chase the highest yield. Look for quality companies, sustainable payouts, and a mix of dividend funds and individual stocks that match your goals.

Just like tracking your credit score with CreditVana, dividend investing works best when you’re consistent, diversified, and focused on the long term.

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👉 Bottom Line: Dividend stocks can provide stability and income, but the smartest investors focus on safety and sustainability, not just sky-high yields.