With the first quarter coming to a close, investors are once again riding a solid winning streak from all three major indices. Both the Nasdaq and the S&P 500 are up over 10%, while the venerable Dow Jones Industrial is up 4.24%. With a solid start to the year already on the books, many investors may be looking to stay in the game by moving some capital from aggressive growth stocks to dividend-yielding companies that could offer a safe space should the markets roll over.

Often, when 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 must be at least $5 million transactions for every trailing three-month period at every quarterly rebalancing date.
• They must be a member of the S&P 500.

We screened the 2024 Dividend Aristocrats, looking for the highest-yielding companies that Wall Street endorses for passive income investors. 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.

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 5.91% dividend every month. 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 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.

3M

This top company could jump with a continued economic pick-up. The shares have rallied over the last month and pay a solid 5.76% dividend. 3M Co. (NYSE: MMM) is a diversified technology company worldwide.

It operates through four segments:

• Safety and Industrial
• Transportation and Electronics
• Health Care
• Consumer

The Safety and Industrial segment offers:

• Industrial abrasives and finishing for metalworking applications
• Auto body repair solutions
• Closure systems for personal hygiene products
• Masking and packaging materials
• Electrical products and materials for construction and maintenance
• Power distribution and electrical original equipment manufacturers
• Structural adhesives and tapes
• Respiratory, hearing, eye, and fall protection solutions
• Natural and color-coated mineral granules for shingles

The 3M Transportation and Electronics segment provides:

• Ceramic solutions
• Attachment tapes
• Films, sound, and temperature management for vehicles
• Premium large-format graphic films for advertising and fleet signage
• Light management films and electronics assembly solutions
• Packaging and interconnection solutions
• Reflective signage for highway and vehicle safety

The company’s Healthcare segment offers:

• Food safety indicator solutions
• Healthcare procedure coding and reimbursement software
• Skin, wound care, and infection prevention products and solutions
• Dentistry and orthodontic solutions
• Filtration and purification systems

The Consumer segment provides:

• Consumer bandages
• Braces, supports, and consumer respirators
• Cleaning products for the home
• Retail abrasives
• Paint accessories
• Car care DIY products
• Picture hanging
• Consumer air quality solutions
• Stationery products

Amcor

This is a very off-the-radar idea, but it makes sense as Amcor PLC (NYSE: AMCR) manufactures and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions. It produces always-needed products and pays a strong 5.38% dividend. 

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 4.54% 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 U.S. 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 commercial real estate has been hit some, hard assets are good in inflation, and this stock pays a solid 4.40% 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.

Chevron

This integrated giant is a safer way for investors looking to position themselves in the energy sector. It pays a 4.17% dividend, and Warren Buffett added 16 million shares in the first quarter. Chevron Corp. (NYSE: CVX) 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 in the fall that it has entered into a definitive agreement with Hess Corp. (NYSE: HES) to acquire all of Hess’s outstanding shares 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 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. 

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