2 top dividend stocks to consider buying in March

Dividend stocks are back in fashion as investors look for passive income and stable cash flows over explosive growth potential. But does that make it a bad time to consider buying?

I think it depends. It’s always good to be aware when investor sentiment is pushing prices up, but there are still some opportunities that are well worth a closer look in today’s market.

Croda International

Shares in Croda International (LSE:CRDA) have rallied 27% from their 52-week lows. But investors who think the chance to buy the FTSE 100 stock has gone might be making a big mistake.

There’s still a 3.5% dividend yield available, which is much higher than the average for the last 10 years. So investors shouldn’t be too quick to think they’ve missed it.

The risk that jumps out at the moment is that the speciality chemicals company’s dividend hasn’t been covered by its free cash flow in recent years. That’s obviously not sustainable over the long term. 

Croda has maintained its impressive 30+ year record of dividend growth, but the increases have been minimal. But that might be set to change. 

The company is highly cyclical. But management thinks the firm is about to emerge from an investment-heavy phase into a much more cash-generative one.

If they’re right, then this could be the perfect time for investors to think about loading up on the stock. In my view, it’s well worth considering as a potential buy in March.

Kraft Heinz

Kraft Heinz (NASDAQ:KHC) has been something of an S&P 500 anomaly recently. Despite its sector being firmly in favour with investors, the stock has gone nowhere in 2026.

The business has been facing some challenges recently. The recent emphasis on healthy eating in the US is a major one, as well as the rise of GLP-1 drugs.

On top of this, the company has abandoned plans to split itself into two parts. But with all of this going on, it’s easy to forget that Kraft Heinz has some key strengths.

Its size gives it a big advantage when it comes to negotiating with suppliers. And I don’t think that’s likely to change any time soon. 

It also has the number one or number two products in 80% of the categories it competes in. That’s something that shouldn’t be underestimated.

The dividend yield is 6.5% and this is comfortably covered by free cash flows. The stock isn’t winning any popularity contests right now, but that’s not what investing is about.

Something for everyone

Croda International has managed to keep growing its dividend through a challenging period for the firm. And the stock is now starting to show some early signs of a recovery.

Kraft Heinz’s challenges are looking more resilient. But the company’s cash flows more than cover an attractive dividend yield and its key strengths also look to be intact. It’s still worth further research, I feel.

I think that means income investors of all types can find something in the stock market. Dividend shares are back in fashion, but there are still opportunities that are worth a look.

The post 2 top dividend stocks to consider buying in March appeared first on The Motley Fool UK.

More reading

• Down 50%! 1 beaten-down FTSE 100 growth share to consider buying instead of Rolls-Royce
• Is 1 of the FTSE 100’s most reliable dividend stocks at the start of a comeback?
• 2 UK value stocks trading at 10-year lows to consider buying in an ISA

Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has recommended Croda International Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

See author's posts