Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

A recent study from Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

One group of stocks that investors frequently overlook is those that fall into the mid-cap arena. Mid-cap stocks are shares of companies with total market capitalizations in the range of about $2 billion to $10 billion. In other words, they are more significant than the small-cap little guys but not in the ballpark of their large-cap brethren.

24/7 Wall St. has always championed dividend stocks that have delivered and raised shareholders’ payouts. The S&P MidCap 400 Dividend Aristocrats is designed to measure the performance of mid-sized companies within the S&P MidCap 400 that have consistently increased dividends every year for at least 15 years.

We screened the S&P MidCap 400 Dividend Aristocrats, looking for companies with among the most significant payouts investors receive that portfolio managers are grabbing now. We found four great companies, and all are now Buy-rated major big Wall Street firms.

The Aarons Companys

This rent-to-own stock looks poised to explode if the economy weakens as we move through 2024 and pays a sweet 6.75% dividend. The Aarons Company, Inc. (NYSE: AAN) provides lease-to-own and retail purchase solutions.

It operates througtwo segments:

• Aaron’s Business
• BrandsMart 

The company engages in direct-to-consumer sales and lease solutions of furniture, appliances, electronics, computers, and other home products through company-operated and franchised stores in the United States and Canada and its e-commerce platforms, including aarons.com and brandsmartusa.com.

It also manufactures and supplies upholstered furniture. The company sells its products under the Aaron’s, BrandsMart U.S.A., BrandsMart Leasing, and Woodhaven Furniture Industries brands.

NNN REIT

Offering a solid 5.25% dividend and plenty of growth potential, this company is a very good idea now. NNN REIT, Inc. (NYSE: NNN) invests primarily in high-quality retail properties subject generally to long-term, net leases.

As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years.

It is one of only three publicly traded REITs to have increased annual dividends for 34 or more consecutive years. The company’s 15-year low occupancy rate is 96%, typically between 98%-99% NNN REIT has grown its funds from operations (FFO) per share at a mid-single-digit rate each year since 2011; the trust’s high occupancy level should afford it low single-digit revenue growth while slightly increasing margins.

Investors can likely expect that the company should continue to see it grow FFO per share at a mid-single-digit rate.

Omega Healthcare Investors

This stock makes sense with an aging population and a significant 8.46% dividend. Omega Healthcare Investors, Inc. (NYSE: OHI) is a REIT that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities.

The company is focused on owning Skilled Nursing Facilities (SNFs). Most of its assets are SNFs, but Omega Healthcare also owns assisted living facilities, specialty facilities, and medical office property. Its portfolio of investments is operated by a diverse group of healthcare companies, predominantly in a triple-net lease structure. The assets span all regions within the U.S., as well as in the U.K.

The company has increased the dividend paid to shareholders every year since 2003, and the annual dividend growth rate comes in at a solid 4.80%

Southwest Gas Holdings

This stock has exploded higher recently, could break out on a big energy sector push, and pays a solid 3.31% dividend. Southwest Gas Holdings, Inc. (NYSE: SWX) distributes and transports natural gas in Arizona, Nevada, and California.

The company operates through:

• Natural Gas Distribution
• Utility Infrastructure Services
• Pipeline and Storage segments

It also provides trenching, installation, and replacement of underground pipes and maintenance services for energy distribution systems.

Southwest Gas Holdings unit Centuri Holdings plans to go public in the United States, the infrastructure services company announced recently. Centuri, which builds and maintains energy networks that power millions of homes and businesses across the U.S. and Canada, did not disclose the size of the offering in its filing.

 

 

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