3 Best Dividend Stocks for Income and Growth

Uncertainty is running high amid surging inflation, rising interest rates, geopolitical concerns, a potential recession and a looming debt ceiling crisis. If you’re nervous, you’re not alone. Some may choose to sit on the sidelines. Yet, there’s no telling how long this uncertainty will last. Investors looking to put capital to work may want to consider high-yield dividend stocks that also offer growth potential.

This way, they can collect income even if the broader market struggles to find its footing in 2023. So, for investors interested in the best dividend stocks for income and growth, I offer up the following three names.

BLX Banco Latinoamericano de Comercio Exterior $18.34
NSA National Storage Affiliates Trust $38.31
EC Ecopetrol $9.11

Banco Latinoamericano de Comercio Exterior (BLX)

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The Banco Latinoamericano de Comercio Exterior (NYSE:BLX), or Bladex for short, is a specialized bank that engages in the financing of foreign trade in 23 countries in Latin America and the Caribbean. Bladex is based in Panama and was founded in 1977.

Rising inflation has been a boon to the bank, driving up prices for commodities such as gold, copper, livestock and silver and allowing Bladex to earn more facilitating loans on that commerce. Bladex offers short-term loans to companies such as shippers that export goods from Latin America to the rest of the world.

The bank reported first-quarter results on April 18. Its net profit soared 232% year over year to $37 million. Meanwhile, net interest income rose for the eighth quarter in a row to $52.6 million, which was more than double the year-ago figure. And revenue jumped 96% from a year earlier to $59.2 million. 

“We have carefully executed a well-thought-out strategy, designed to capitalize on the strong upside potential of Bladex’s unique business model while leveraging the current macro-scenario,” Bladex Chief Executive Officer (CEO) Jorge Salas said. “We remain committed to enhancing the bank’s profitability in 2023 by prioritizing strategic investments and operational efficiency.”

The majority of BLX shares are controlled by Latin American central banks. However, if you become one of the minority shareholders, you’ll be getting a fat 5.6% dividend yield. And while just two analysts cover the stock, both rate it a “buy,” with their median price target of $29.10 implying upside of 59%. So, I’d say BLX qualifies as one of the best dividend stocks for income and growth.

National Storage Affiliates Trust (NSA)

A photo of a storage facility hallway.

Source: Kostsov / Shutterstock.com

Real estate investment trusts (REITs) offer an opportunity for investors to generate income as they typically distribute at least 90% of their income to their unitholders. While many REITs, may continue to struggle amid the economic slowdown and Federal Reserve tightening cycle, such as those focused on office space or shopping malls, others are likely to be more insulated. One sector within the REIT space that comes to mind is public storage.

Pandemic-related trends drove an increase in demand for self-storage. These included the work-from-home movement, as well as more people relocating and remodeling. But as demand began to normalize in the latter part of 2022, storage REITs took a hit.

Yet, as Hoya Capital noted on Seeking Alpha in late January, the long-term outlook for the sector is bullish: “Patience will be required over the next several quarters as expectations adjust to the post-pandemic normalization, but we continue to like the longer-term prospects for the storage sector given the ‘stickiness’ of demand, strong balance sheets, low cap-ex needs, and impressive operational track record.”

In this space, I like National Storage Affiliates Trust (NYSE:NSA), one of the country’s largest owners and operators of self-storage facilities. It has 1,117 self-storage properties located in 42 states and Puerto Rico with around 72.8 million rentable square feet.

The REIT is down 23% over the past year and about 4% since late January, when Hoya Capital said the “soft patch for storage REITs” had yet to be “fully discounted.”

NSA isn’t getting a lot of love from analysts at the moment. Just three of the 12 covering the stock rate it a “buy.” However, the average analyst target price of $43.36 is 13% above where shares currently trade, while they throw off a 5.8% yield. I think the sell-off in NSA over the past year represents a buying opportunity for income-oriented growth investors.

Ecopetrol (EC)

Image of an oil wells with an orange-red sky at dusk. oil stocks to buy with safe dividends

Source: Shutterstock

Ecopetrol (NYSE:EC) is the state-operated oil company of Colombia. The Colombian government owns 88.5% of the company’s shares. As such, the company is well-maintained.

In the first three months of the year, Ecopetrol produced 719,400 barrels of oil equivalent per day and refined a record 412,000 barrels of oil per day, on average.

While Q1 net profit fell 14% year over year on higher costs and falling crude prices, EBITDA was up 12.2% from a year ago, while sales increased 19.7% thanks to higher volumes and a positive exchange rate.

In addition to its oil assets, Ecopetrol owns the largest solar plant in Columbia. In January, the company announced it is partnering with Total Eren to build a solar photovoltaic farm in Colombia with nearly 100 megawatt peak (MWp) of capacity.

Down nearly 40% over the past 12 months, shares currently trade at just 3.5 times earnings and selling seems overdone. Even a move back to the stock’s 2023 highs, around $12 per share, would mean a gain of more than 3o% for investors.

While the company only pays a dividend annually, it paid out nearly 83 cents per share last month for a yield of 9.1%.

On the date of publication, Ian Bezek held a long position in NSA, BLX and EC tock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

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