5 Best Dividend Stocks For Roth IRA According To Reddit

Young Americans are flocking to open Roth IRA accounts to secure their retirement. An analysis from Boston College's Center for Retirement Research shows that the percentage of Roth IRA accounts held by households led by individuals aged 20-29 has tripled, from 6.6% in 2016 to 19.2% in 2022.

A Roth IRA is one of the easiest ways to save and grow your money tax-free and invest for retirement. As Reddit has a vibrant and growing retirement-related community focused on dividend investing, we surveyed the platform's relevant discussion boards (r/dividends, r/investing) to see which individual stocks Redditors buy for Roth IRAs.

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Realty Income

Realty Income Corp O is one of Redditors' favorite dividend stocks for a Roth IRA account. With an over 5.47% dividend yield, Realty Income is a monthly dividend stock with 29 straight years of dividend increases. The latest increase came last month when the real estate investment trust upped its dividend by 0.2% to $0.2625 per share. 

Realty Income also increased its guidance for investment volume and FFO for 2024. The company now expects adjusted FFO in the $4.15-$4.21 range, compared with its prior guidance of $4.13-$4.21. Investment volume is now expected at about $3.0 billion, up from its previous expectation of $2.0 billion.

3M

3M MMM is another top dividend stock pick of Redditors for a Roth IRA account. The conglomerate behind brands such as Scotch tape and Post-it notes has increased its dividend for 64 consecutive years. 3M has undergone a management shake-up, and Wall Street is bullish.

Last month, Wolfe Research upgraded 3M to Outperform from Peer Perform. Analysts at the firm said they are encouraged by Bill Brown’s appointment as the new CEO. Bank of America also upgraded the stock to Buy from Neutral and increased its price target to $120 from $105, citing the new CEO's plan to focus on growth and operations.

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Procter & Gamble

Procter & Gamble PG is another favorite dividend stock of Redditors for a Roth IRA. The company has a diversified business with 68 straight years of dividend increases. Despite a challenging environment for consumer companies amid rising inflation, Procter & Gamble shares are up 12% this year, thanks to its pricing power. Analysts believe Procter & Gamble's popular brands, including Gillette, Old Spice, Oral B, and Pampers, enable it to transfer the pricing pressures to consumers. 

In April, the company affirmed its fiscal full-year organic sales growth guidance of 4% to 5%. It also increased its fiscal 2024 core earnings per share growth guidance from 8%-9% to 10%-11%.

Coca-Cola

With a nearly 3% dividend yield and 62 consecutive years of dividend increases, Coca-Cola Co KO is a favorite dividend stock of Redditors for Roth IRA accounts. The broader market is also bullish on the stock. As of the end of the March quarter, billionaire Warren Buffett owns a $24.5 billion stake in the beverage giant. 

Last month, BNP Paribas Exane analyst Kevin Grundy started covering the stock with an Outperform rating. Grundy called KO a "best-in-class" company. The analyst sees upside potential for Coca-Cola shares amid market share momentum and improving EPS, among other factors. Grundy said the company has strong growth potential outside the US. 

Johnson & Johnson

According to our research, retail investors on Reddit overwhelmingly recommend Johnson & Johnson JNJ for a Roth IRA account. The company has over six decades of consecutive dividend increases and more than $26 billion in cash. The stock is currently in the limelight after it posted better-than-expected quarterly results that were boosted by growth in the Medicine and MedTech segments. 

Johnson & Johnson is also expanding its business via acquisitions. Earlier this year, the company completed its $13.1 billion acquisition of Shockwave Medical, a cardiovascular medical device company.

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