My Top Dividend Stock To Buy In May
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If you’ve been following along with my buys these last couple weeks—or if you caught the big reveal video here—then you already know I recently added Zoetis (ZTS) to my portfolio, which makes it an easy pick for my top dividend stock to buy in May.
The stock is down more than 10% over the last month and around 7% year-to-date, leaving it in the same exact spot it was this time last year. And I’ll be honest—I deeply regretted not buying at these prices last time, so I’m finally putting my money where my mouth is.
In case you’ve never heard of this company before, Zoetis was established in 2013 as a spin-off from Pfizer (PFE), and since then has secured its spot as the top dog in animal health.
Source: Investor Presentation
Even though the share price hasn’t been great this year (and who are we kidding, a lot of stocks are in the same boat), the business itself hasn’t skipped a beat. Zoetis is still firing on all cylinders and, based on its Snapscore of 8.45, it ranks as one of the highest quality companies on my radar.
Source: Snapstock
Revenue, earnings, and free cash flow are all growing at a healthy rate, profit margins are expanding, and the balance sheet is looking good with a very low Net Debt To Free Cash Flow Ratio of only 2.07.
To top it all off, Zoetis is a dividend growth machine—raising its dividend at an average annual rate of 21% over the last five years—which is incredible!
Numbers aside, the company is dominating the animal health space, which is benefiting in a big way from long-term tailwinds—particularly around what Zoetis calls the “human-animal bond.”
More and more pet owners, especially Millennials and Gen Z, see their pets as part of the family. That means that even in tough economic times, people are still willing to spend “whatever it takes” on their pets’ health, giving Zoetis a level of resilience that we long-term investors are seriously longing for.
Source: Investor Presentation
In addition to companion animals like cats and dogs, Zoetis also supports the health of livestock, helping meet the rising global demand for animal protein. With the world population expected to grow by nearly 2 billion people by 2050, protein consumption is only going to increase—along with the need for the products Zoetis provides.
Source: Investor Presentation
Speaking personally, I’ll be dollar cost averaging into this position for the foreseeable future.
Best case scenario, the stock keeps heading lower while I’m still buying—but so far, it’s been hovering in that mid-$140 to low-$150 range since I started building my position, which is totally fine by me. I’ll keep buying at these levels all day long.
With that said, Zoetis isn’t the only good buying opportunity on the market right now. It looks like there are quite a handful more, and I want to hear from you: Which discounted stocks do you have your eye on as we make our way into May? Write to me here and let me know.
Also, earlier this month, I had my biggest day of dividend income ever. If you want to hear more about it—and see exactly which payments hit my account that day—I’m giving you the full scoop right here.
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IN MY PORTFOLIO 📈
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ICYMI 🎥
This Is The REAL REASON You Have A Job | Ep. 15
In this episode of The Deep End, Ari and I break down the real reason you have a job—and why investing isn’t just optional, but something everyone has to do.
CAREFULLY CURATED 🔍
📺 Dividends Always Win - So much of investing success comes down to managing your own behavior, and in his latest video, Dividend Data explains how dividend investing actually gives you a built-in advantage by helping you keep your emotions in check.
🎧 Harsh Truths About Human Nature - Naval Ravikant is one of my favorite people to listen to, and this was a great conversation between him and Chris Williamson covering wealth, success, and everything in between.
📚 Beautiful vs. Practical Advice - A lot of financial advice sounds good and intelligent, but has no practical purpose for the person receiving it. According to Morgan Housel in his latest blog post, this happens for a couple of reasons.
SINCE YOU ASKED 💬
"I'm doing a riskier strategy lol, and I'm investing in high-dividend ETFs. My main one is QQQY. Being a young kid, and not having a lot of money in my portfolio, it attracted me the most. I feel like since I don't have a lot of money and am just starting off, I need to invest in some higher-yielding ones. I know the higher-yielding ones are normally not very safe/reliable. What are your thoughts?"
- Wyatt | Email
If I'm being completely honest, because you’re young and have so much time on your side, there’s no need for you to be reaching for yield—especially through riskier, more complicated ETFs like QQQY.
These types of funds might seem tempting because of their ridiculously high yields (QQQY’s yield is sitting at 93.34% according to Seeking Alpha), but they’re a lot more complicated and flimsy than they look. They’re no place for a bright, young investor like yourself to park your money.
You even hinted at it in your question—you know these aren't very safe or reliable. And based on the way you phrased it, it sounds like you know deep down that these yields are too good to be true.
At the end of the day, if you don’t fully trust where you're putting your money, that’s a great sign that you shouldn’t be putting it there in the first place.
As a beginner, I’d really encourage you to keep things simple and focus on building a better foundation. You want the bulk of your portfolio in something more straightforward, like solid, diversified ETFs that simply invest in great companies.
No derivatives. No complicated income strategies. Just pure exposure to businesses that are growing their earnings and free cash flow over time. It's not as flashy as a 93% yield, but it’s effective.
Now I don’t know your exact investment time horizon, but I’m going to assume it’s multiple decades—and that’s your greatest advantage right now. Time is the most important ingredient when it comes to compounding and building wealth. You want to use that to your advantage by investing in companies that can grow and snowball your wealth over the years—not chase the highest yield you can find today.
And that doesn’t mean you can’t own any high-yield investments. I’m not totally against sprinkling a little bit of that into your portfolio if you really want to.
But the foundation of your portfolio should absolutely be built on companies that will be bigger and better tomorrow than they are today. In many cases, that's going to mean picking investments that might start off with a lower dividend yield, but that are steadily increasing their payments year after year.
Over time, that strategy should win by a wide margin. It requires more patience and discipline for sure, but I firmly believe it's the right way to go.
Have a question? Ask me here to see it featured in an upcoming newsletter.
LAST WORD 👋
If you haven't already, consider joining my free Discord group. I call it the DRIP N' Sip Discord group, and it's basically just one big group chat filled with almost 4,000 investors like yourself.
It's a really positive and uplifting community where everyone shares their buys, sells, and dividend income, and is down to talk dividend stocks around the clock. Everyone is there to help each other learn and grow as investors, and I think you'd gain a lot from being a part of it.
Click here to join the DRIP N' Sip Discord group. Like I said, it's totally free, and I look forward to seeing you in there!
