By Julia Santos · Founding Editor, DividendsTimes
Educational analysis, not personalized investment advice.
You want to put money to work this month and you want it to pay you back quickly. Fair enough. With the Fed holding rates at 3.5% to 3.75% after the July 29 meeting and long-dated Treasury yields sitting at 19-year highs, the competition for your income dollar is fierce. So which are the best dividend stocks to buy in August 2026, and which ones should you leave alone?
In this article
We went through our tracker data as of late July to find stocks that actually pay in August, carry reasonable payout ratios, and have business models that do not depend on a single macro tailwind. Below are five names, each with a one-line case, the pay date, and the risk that rarely makes the headlines.
Why payout ratios matter more than yield right now
Among the highest-yielding US large caps we track, the average payout ratio is 88%. That is uncomfortably close to 100%, the line where a company pays out every dollar it earns. Two names illustrate the danger: Pfizer (PFE) currently shows a 131% EPS payout ratio, and Chevron (CVX) sits at 121%. Neither figure means a cut is imminent tomorrow, but both signal that earnings need to grow into the dividend rather than the other way around. When oil is above $90 a barrel on US-Iran tensions and pharma pipelines face patent cliffs, “growing into it” is not guaranteed.
Use our payout ratio calculator to check any stock before you buy. A payout ratio under 75% for non-REITs gives you a margin of safety; above 90% deserves extra scrutiny.
Five best dividend stocks to buy in August 2026
Each pick below pays a dividend in August, carries a payout ratio we consider manageable, and offers a straightforward investment case. We list the per-share quarterly payment from our tracker alongside the scheduled pay date.
- AT&T (T), $0.2775 per share, pays August 3. The case: T sports a 37% payout ratio, the lowest on this list by a wide margin. Free cash flow has improved steadily since the WarnerMedia spinoff, and the company is reinvesting in fiber and 5G. The risk nobody mentions: subscriber growth in wireless is a zero-sum game now. If T cannot keep adding postpaid phone customers, the market will reprice the stock regardless of how safe the dividend looks on paper.
- Verizon (VZ), $0.69 per share, pays August 3. The case: a 67% payout ratio is very reasonable for a mature telecom, and VZ has raised its dividend for nearly two decades. The risk nobody mentions: Verizon carries significant debt from its C-band spectrum purchases. With Treasury yields at 19-year highs, refinancing that debt gets more expensive every quarter it rolls over. Watch the interest expense line, not just the top-line revenue.
- AbbVie (ABBV), $1.685 per share, pays August 14. The case: ABBV has built a diversified immunology and oncology portfolio around Skyrizi and Rinvoq to offset Humira’s biosimilar erosion. It is a Dividend King with over 50 years of consecutive increases when you count the legacy Abbott streak. The risk nobody mentions: the concentration in two replacement drugs is its own vulnerability. If either faces a clinical setback or pricing pressure from new tariff-related drug importation rules, the growth thesis stalls.
- Realty Income (O), $0.2695 per share (monthly), pays August 14. The case: O pays monthly, which is genuinely useful for retirees building a cash-flow calendar. Its EPS-based payout ratio of 265% looks alarming, but REITs are properly evaluated on funds from operations (FFO), not earnings per share. On that basis, O’s payout has historically been well covered. The risk nobody mentions: Realty Income’s tenant base leans heavily on convenience stores, dollar stores, and pharmacies. A recession that squeezes lower-income consumers hits those tenants first, and lease renegotiations follow.
- Colgate-Palmolive (CL), $0.52 per share, pays August 14. The case: toothpaste, soap, and pet food sell in any economy. CL is another Dividend King, and its global brand portfolio gives it pricing power that most consumer staples peers envy. Check our Dividend Kings guide for the full list of 50-plus-year raisers. The risk nobody mentions: CL earns a large share of revenue in emerging markets. Currency headwinds from a strong dollar (supported by high US rates) can quietly shave hundreds of millions off reported earnings even when unit volumes grow.
Procter & Gamble (PG) deserves an honorable mention at roughly $1.06 per share with a mid-August estimated pay date. We did not include it as a formal pick only because the exact date was not confirmed in our tracker at press time. PG’s investment case is similar to CL’s: defensive, global, and boring in the best possible way.
What to watch in August
Three things could shift the landscape for dividend investors this month:
- Treasury yields. If the 10-year stays above 5%, income investors will keep comparing dividend stocks to risk-free government bonds. Stocks need to offer either growth or a yield premium to justify the equity risk.
- Oil prices. Brent above $90 benefits energy dividends in the short run but pressures consumer spending and transportation costs. Energy payout ratios like CVX’s 121% suggest the dividends are priced for sustained high oil, which is never a certainty.
- Tariff developments. New Trump tariff rounds are back in the headlines. Companies with global supply chains (CL, PG, ABBV) could see margin compression if input costs rise. Watch earnings calls for management commentary on sourcing changes.
You can track upcoming ex-dividend dates and pay dates for all of these names on our live ex-dividend calendar.
Bottom line
The best dividend stocks for August 2026 are not the highest yielders. They are the ones whose payouts are comfortably covered, whose businesses do not depend on a single commodity or patent, and whose management teams have decades of dividend-raising history behind them. T, VZ, ABBV, O, and CL all pay this month, all carry defensible payout ratios (when measured correctly), and all come with risks that you should size honestly before buying.
Yield chasing feels productive. Owning companies that can sustain and grow their payouts actually is.
Frequently asked questions
Which dividend stocks pay in August 2026?
Several large US dividend payers have August pay dates. AT&T (T) and Verizon (VZ) both pay on August 3. AbbVie (ABBV), Realty Income (O), and Colgate-Palmolive (CL) pay on August 14. Procter & Gamble (PG) is expected to pay in mid-August as well. Monthly dividend ETFs like JEPI, JEPQ, and DIA also distribute in August.
Is a high payout ratio a red flag for dividend stocks?
It depends on the sector. For most corporations, a payout ratio above 90% means the company is distributing nearly all its earnings and has little room to absorb a downturn. Pfizer (PFE) at 131% and Chevron (CVX) at 121% are examples of stretched payouts. REITs like Realty Income (O) are an exception because they are evaluated on funds from operations (FFO), not EPS. Always check the payout ratio in context before drawing conclusions.
Should I buy dividend stocks or Treasury bonds with yields this high?
Treasury bonds at current yields offer risk-free income, which is a legitimate alternative. The advantage of dividend stocks is the potential for income growth over time. A stock like AT&T (T) with a 37% payout ratio has room to raise its dividend, while a Treasury bond locks in a fixed coupon. The right mix depends on your time horizon, tax situation, and tolerance for equity volatility. Many income investors hold both.
Educational analysis, not personalized investment advice.