In this article, we will take a look at some of the best high yield stocks to buy in October.
Dividend investing seems like a straightforward approach, but when it comes to actually doing it, you have to dig a lot deeper. These stocks tend to be best suited for the long run, a fact understood by most veteran investors. For years now, dividend grower stocks have outperformed the broader market during economic contraction.
That said, dividend yield is an essential part of dividend investing, and when it comes time to make an investment decision, investors tend to focus on yields. But getting caught up in yield traps is more harmful than helpful. Dan Lefkovitz, a strategist for Morningstar Indexes, made the following comment for investors with a preference for high yields:
“It’s really critical to be selective when it comes to buying dividend-paying stocks and chasing yield. Looking for the most yield-rich areas of the market can often lead you into troubled areas and dividend traps—companies that have a nice-looking yield that is ultimately unsustainable. You have to screen for dividend durability and reliability going forward.”
Although dividend stocks are primarily known for their long-term potential, some investors manage to make a quick buck with a dividend capture strategy. This enables investors to purchase a stock just before a company pays a dividend and sell it shortly after the dividend is paid. The entire objective of this approach is to focus on the dividend income and trade on the stock’s upside in the period prior to dividend declaration.
Given this, we will take a look at some of the best stocks for a dividend capture strategy.
Photo by Vitaly Taranov on Unsplash
Our Methodology
For this list, we selected dividend stocks that will trade ex-dividend in October 2025. The ex-dividend date indicates the cutoff day to buy a stock to receive its upcoming dividend payment. These stocks have dividend yields above 2%, as of September 27. The stocks are ranked according to their ex-dividend dates.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
15. Rithm Capital Corp. (NYSE:RITM)
Ex-Dividend Date: October 1
Rithm Capital Corp. (NYSE:RITM) is a real estate investment trust that is an active participant in structured finance and asset management, for which it has won awards for strategic acquisitions. Among the biggest transactions are the 2023 acquisition of Sculptor Capital Management and the pending acquisition of Computershare Mortgage Services, which is expected to close in the second quarter. These initiatives are focused on expanding its assets under management (AUM) and enhancing its offerings, solidifying its position in a competitive marketplace.
Rithm Capital Corp. (NYSE:RITM)’s strategy is focused on diversification and bolstering its mortgage servicing and origination platforms that have been instrumental in propelling its excellent financial performance.
On September 17, Rithm Capital Corp. (NYSE:RITM) declared a quarterly dividend of $0.25 per share, which was in line with its previous dividend. Regular dividends have been paid by the company to its shareholders for ten years. The dividend yield on the stock is 8.03% as of September 27. RITM is going ex-dividend on October 1, which makes it one of the best stocks to carry out a dividend capture strategy.
14. Sempra (NYSE:SRE)
Ex-Dividend Date: October 1
Sempra (NYSE:SRE) is involved in regulated utilities and building energy infrastructure. Its utility operations provide electricity and natural gas in California by San Diego Gas & Electric (SDG&E) and Southern California Gas Company (SoCalGas), and in Texas by Oncor and Sharyland Utilities. These companies have millions of customers with government-regulated pricing structures that provide stable income and secure cash flows.
Sempra (NYSE:SRE) announced on Sept. 18 a quarterly dividend of $0.645, consistent with the previous dividend. The company most recently increased its payout by 4% in February this year. Oct. 1 is the stock’s ex-dividend date, and it has a 2.91% dividend yield through Sept. 27.
In addition to utilities, Sempra (NYSE:SRE) is a major investor in energy infrastructure like liquefied natural gas (LNG) export projects and energy networks in Mexico and the US. The success of this business depends on building, operating, and exporting successfully from these plants. Success drivers are securing regulatory approvals, maintaining capital costs, and navigating the transition of the industry towards renewables and clean fuels. In recent years, Sempra has increasingly depended on regulated utility expansion to provide stability, insulating against vulnerability to non-regulated business.
13. Philip Morris International Inc. (NYSE:PM)
Ex-Dividend Date: October 3
Philip Morris International Inc. (NYSE:PM) is an American tobacco company, with its products sold in over 180 countries. The company maintains an 80% payout ratio, which appears manageable in light of its ongoing business transformation. Smoke-free products— led by IQOS heated tobacco and ZYN nicotine pouches— accounted for 39% of 2024 revenue, with many markets already seeing smoke-free products as the majority. The acquisition of Swedish Match gave Philip Morris a strong foothold in the fastest-growing nicotine segment, while the recent dismissal of a lawsuit over ZYN pricing eliminated a significant concern.
IQOS, Philip Morris International Inc. (NYSE:PM)’s heat-not-burn product, brought in over $3 billion in net revenue and commands a 76% share of the global heat-not-burn market. In Europe, adjusted IQOS sales volumes picked up, climbing 9.1% once regulatory challenges eased, while in Japan, adjusted volumes grew 7.8%, pushing its market share to 31.7%.
On September 19, Philip Morris International Inc. (NYSE:PM) declared an 8.9% hike in its quarterly dividend to $1.47 per share. Through this increase, the company stretched its dividend growth streak to 16 years, which makes it one of the best stocks for a dividend capture strategy. The stock has a dividend yield of 3.57%, as of September 27, and it will go ex-dividend on October 3.
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