The parabolic rally that started in October when the Federal Reserve declared that the rate hikes for this period were over has turned into a euphoria-driven mess and could be ready to hit a wall. Climbing inflation in January, which was expected to be all but over, combined with continued layoffs, so-so earnings results, a spiraling national debt (Now over $34 trillion), an expanding war in the Middle East and Ukraine, and a market driven by essentially ten stocks, looks bloated and overbought.
So what should investors do now? There is an old saying on Wall Street, “Nobody ever went broke taking a profit,” and now is the time to do just that. Those who want to stay in stocks may consider shifting capital to safe dividend-paying stocks among the Dividend Aristocrats.
Often, when income investors look for defensive companies paying big dividends, they are drawn to the Dividend Aristocrats, and with good reason. The 68 companies that made the cut for the 2024 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. But the requirements go even further, with the following attributes also mandatory for membership on the Dividend Aristocrats list:
- Companies must be worth at least $3 billion each quarterly rebalancing.
- Average daily volume of at least $5 million transactions for every trailing three-month period at every quarterly rebalancing date.
- Be a member of the S&P 500.
We screened the 2024 Dividend Aristocrats, looking for the safest companies that pay the highest dividends. We found five strong Buy rated on Wall Street that make sense for worried investors looking for a safe haven.
Chevron
This integrated giant is safer for investors looking to get positioned in the energy sector and pays a rich 4% dividend. Chevron Corp. (NYSE: CVX | CVX Price Prediction) engages in integrated energy and chemicals operations worldwide through its subsidiaries.
The company operates in two segments:
- Upstream
- Downstream
The Upstream segment is involved in the following:
- Exploration, development, production, and transportation of crude oil and natural gas
- Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
- Transportation of crude oil through pipelines
- Transportation, storage, and marketing of natural gas, as well as operating a gas-to-liquids plant
The Downstream segment engages in:
- Refining crude oil into petroleum product
- Marketing crude oil, refined products, and lubricants
- Manufacturing and marketing renewable fuels
- Transporting crude oil and advanced products by pipeline, marine vessel, motor equipment, and rail car
- Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives
Chevron announced last fall that it has entered into a definitive agreement with Hess Corp. (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion.
Berkshire Hathaway owns 6.8% of Chevron’s outstanding stock with 126,093,326 shares, and the energy giant makes up 5.1% of the portfolio.
Coca-Cola
This company remains a top Warren Buffet holding as he owns a massive 400 million shares. The Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, offering consumers more than 500 sparkling and still brands.
Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the company’s portfolio features 20 billion-dollar brands, including:
- Diet Coke
- Fanta
- Sprite
- Coca-Cola Zero
- Vitaminwater
- Powerade
- Minute Maid
- Simply
- Georgia
- Del Valle
Globally, they are the No. 1 provider of sparkling beverages, ready-to-drink coffees, and juice drinks.
Through the world’s most extensive beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of more than 1.9 billion servings a day. It’s also important to remember that the company owns almost 20% % of Monster Beverage Corp. (NASDAQ: MNST), which continues to deliver big numbers.
Investors are paid a very dependable 3.27% dividend
Kenvue
Spun off from Johnson & Johnson Inc. (NYSE: JNJ) last year, this potential total return home run pays a huge 4.20% dividend. Kenvue Inc. (NYSE: KVUE) is a global consumer health company.
The company operates through three segments:
- Self Care
- Skin Health and Beauty
- Essential Health
The self-care segment offers cough, cold, and allergy pain care, digestive health, smoking cessation, and other products under:
- Tylenol
- Nicorette
- Zyrtec brands
The Skin Health and Beauty segment provides face and body care, hair care, sun care, and other products under:
- Neutrogena
- Aveeno
- OGX brand names
The Essential Health segment offers oral and baby, women’s health, and wound care products under:
- Listerine
- Johnson’s
- Band-Aid
- Stayfree brands
Realty Income
This is another ideal stock for growth and income investors looking for a safer contrarian idea for 2024 that pays a whopping 5.88% dividend. Realty Income Corp. (NYSE: O) is an S&P 500 company that provides stockholders with dependable monthly income.
The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 6,500 real estate properties owned under long-term lease agreements with commercial tenants.
The company has declared 640 consecutive common stock monthly dividends throughout its 54-year operating history and increased the dividend 122 times since Realty Income’s public listing in 1994. It is a top real estate member of the S&P 500 Dividend Aristocrats index.
PepsiCo
This top consumer staples stock will supply the goods for March Madness parties and pays a solid 3.04% dividend. PepsiCo Inc. (NYSE: PEP) is a worldwide food and beverage company.
Its Frito-Lay North America segment offers
- Lays and Ruffles potato chips
- Doritos, Tostitos, and Santitas tortilla chips
- Cheetos cheese-flavored snacks, branded dips
- Fritos corn chips
The company’s Quaker Foods North America segment provides:
- Quaker oatmeal
- Grits
- Rice cakes
- Natural granola and oat squares
- Pearl Milling mixes and syrups
- Quaker Chewy granola bars
- Cap’n Crunch cereal
- Life cereal
- Rice-A-Roni side dishes
PepsiCo’s North America Beverages segment offers beverage concentrates, fountain syrups, and finished goods under these brands:
- Pepsi
- Gatorade
- Mountain Dew
- Diet Pepsi
- Aquafina
- Diet Mountain Dew
- Tropicana Pure Premium
- Sierra Mist
- Mug brands
Top Gaining Stocks
Top Losing Stocks