2 No-Brainer Dividend Stocks to Buy Heading Into the Fourth Quarter

This has been a wild year, considering the war in Iran, tariffs, rising oil and gasoline prices, and stubbornly high inflation. But the stock market has been a stable force, up 12% on the year and predicted to provide double-digit gains for the fourth consecutive year.

However, this is no time to sit still. The latest warning signs in the economy are the $40 trillion in U.S. national debt and spiraling bond yields, which are making borrowing even more expensive. So, as the fourth quarter approaches, it is a good time to consider strong dividend stocks with a long history of rewarding shareholders with generous, consistent payouts.

Both of these companies have a compelling case for investment in the fourth quarter: Realty Income (NYSE: O) and International Business Machines (NYSE: IBM).

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No-brainer dividend stock to buy No. 1: Realty Income

It's hard for me to ever pass over Realty Income. The real estate investment trust doesn't have the highest dividend yield, and its stock performance isn't as strong as some, but Realty Income provides two things I value most: diversification and consistent growth.

Realty Income has a huge reach, owning about 15,500 commercial properties leased to 1,800 clients across 92 industries. That means a downturn in a single company, or even an industry, probably wouldn't hurt Realty Income and its revenue stream.

And you want diversification? The largest industry weighting in Realty Income's portfolio is grocery stores, accounting for 11.1% of the company's rental income. Convenience stores, home improvement stores, dollar stores, fast-food restaurants, automotive stores, drugstores, and health and fitness centers each account for more than 4% of the weight.

And finally, there's the growth. Realty Income is a monthly dividend stock (which means you get paid 12 times a year and can put that money to work for you, rather than waiting for a quarterly payout). It's paid a dividend for 674 consecutive months -- more than 56 years -- and has increased its dividend 135 times since the stock was listed on the New York Stock Exchange in 1994.

Realty Income stock is up 8.5% this year, but if you include the dividend payouts in the total return, you have a 12.5% gain. The stock currently has a dividend yield of 5.3%.

No-brainer dividend stock to buy No. 2: IBM

Some people may consider this a contrarian pick. IBM stock is down 20% this year after a disastrous second-quarter earnings report that led to the worst day in the stock's history on July 14.

But I think it's a smart play. There's something to be said for buying stock in a great company that's had some bad luck. And that's IBM right now.

The issue with Big Blue isn't even its fault. The company saw a major earnings shortfall in Q2 because its customers shifted their spending away from IBM products to grab memory and storage products before those prices skyrocketed even further.

As a result, several major deals that IBM expected to close in Q2 didn't. And that meant revenue of $17.1 billion was up only 1% from a year ago. Net income was $2.2 billion, with earnings per share of $2.27, both down 1% from the previous year.

But that money isn't lost -- it's just delayed. CEO Arvind Krishna told analysts that about a third of the delayed transactions closed in the first weeks of July, so they'll be recorded on the company's Q3 report.

So, I'm fully expecting IBM to bounce back, turning the July disaster into an opportunity investors can capitalize on before the fourth quarter begins. RBC Capital has an "outperform" rating on IBM stock with a price target of $270, representing potential upside of 15%. Bank of America Securities is even more bullish, with a "buy" rating and a $330 price target, representing 40% upside.

IBM has a dividend yield of 2.9% -- a generous payout for a tech company. I think it's due for a rebound.

Bank of America is an advertising partner of Motley Fool Money. Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends International Business Machines and Realty Income. The Motley Fool has a disclosure policy.