Often, when income investors look for defensive companies paying big dividends, they are drawn to the Dividend Aristocrats, and with good reason. The 67 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 companies Wall Street endorses for passive income investors but are often overlooked. Passive income is a steady stream of unearned income that doesn’t require active traditional work. Ideas for earning passive income include investments, real estate, and side hustles.
Five top companies with among the group’s highest dividends and dividend safety ratings look like outstanding buys now. Plus, with the potential for interest rates to be lowered later this this year, some of these companies could have significant upside potential.
Realty Income
This is an ideal stock for growth and income investors looking for a safer contrarian idea for the rest of 2024 that pays a whopping 5.88% dividend. Realty Income Corporation (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 15,540 real estate properties owned under long-term lease agreements with commercial tenants.
The company has declared 644 consecutive common stock monthly dividends throughout its 55-year operating history and increased the dividend 123 times since Realty Income’s public listing in 1994. It is a top real estate member of the S&P 500 Dividend Aristocrats index.
Amcor
This is a very off-the-radar idea, but it makes sense as they produce products that are always needed and pays a strong 5.46% dividend. Amcor plc (NYSE: AMCR) manufactures and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions.
The company operates through two segments:
- Flexibles
- Rigid Packaging
The Flexibles segment provides flexible and film packaging products in food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries.
The Rigid Packaging segment offers rigid containers for a range of beverage and food products, including:
- Carbonated soft drinks
- Water
- Juices
- Sports drinks
- Milk-based beverages
- Spirits
- Beer
- Sauces
- Dressings
- Spreads
- Personal care items
- Plastic caps for various applications.
The company sells its products primarily through its direct sales force.
Franklin Resources
This company is a mutual fund powerhouse that pays a safe and secure 4.53% dividend. Franklin Resources Inc (NYSE: BEN) is among the most prominent global money managers.
The firm markets mutual funds and institutional separate accounts under the Franklin, Templeton, and Mutual Series brands. At times, 50% of its sales are from outside the US, an advantage given the maturing US market.
Franklin Resources offers its products and services under the brands of:
- Franklin
- Templeton
- Franklin Mutual Series
- Franklin Bissett
- Fiduciary Trust
- Darby
- Balanced Equity Management
- K2
- LibertyShares
- Edinburgh Partners
The 2023-2024 bull market has proven to be a solid tailwind for the company. While withdrawals from baby boomers may be a concern, the path forward looks solid.
Federal Realty Investment Trust
While real estate has been hit strongly, hard assets are good in inflation, and this stock pays a solid 4.31% dividend. Federal Realty Investment Trust (NYSE: FRT) is a recognized leader in the ownership, operation, and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C., to Boston, San Francisco, and Los Angeles.
Federal Realty’s mission is to deliver long-term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply.
Its expertise includes creating urban, mixed-use neighborhoods like:
- Santana Row in San Jose, California
- Pike & Rose in North Bethesda, Maryland
- Assembly Row in Somerville, Massachusetts
Federal Realty’s 102 properties include approximately 3,300 tenants in 26 million commercial square feet and over 3,100 residential units. The REIT has increased its quarterly dividends to its shareholders for 56 consecutive years, the longest record in the industry.
Essex Property Trust
This stock has been on a solid run but is an outstanding way for investors looking to add another inflation-busting real estate position that pays a hefty 4.07% dividend. Essex Property Trust, Inc. (NYSE: ESS), an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets.
Essex currently owns interests in 252 apartment communities, comprising approximately 62,000 apartment homes, with an additional property in active development.
On Feb. 22, the company announced that its board approved a 6.1% increase in its annual cash dividend, the 30th consecutive annual dividend increase. The dividend for the first quarter of $2.45 per share is payable on April 12 to shareholders of record as of March 29
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