24/7 Wall St. Insights
- The bull market rally that started in the fall of 2023 may be coming to an end.
- Growth and income investors should stick with dependable companies that raise dividends.
- Grab this free report everyone is after: Access 2 legendary, high-yield dividend stocks Wall Street loves.
Dividend stocks are a favorite among investors for good reason. They provide a steady income stream of passive income and offer a promising avenue for total return. Total return, a comprehensive measure of investment performance, encompasses interest, capital gains, dividends, and distributions realized over time.
For example, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%. That is, 10% for the increase in stock price and 3% for the dividends paid.
After a massive run since the fall of 2023, the stock market rally could be coming to an end. The tech-heavy Nasdaq has slipped into correction territory (down over 10%), while the S&P 500 has fallen almost 7% since the middle of July. Michael Kramer of Mott Capital Management pointed out recently that earnings estimates for 2024 have been unchanged for the two past years, and the PE ratio has risen to 22 times 2024 estimates of $241.96, versus 14 times 2024 estimates in the fall of 2022.
One critical aspect for investors when selecting stocks for their portfolios is the safety and security of a company’s dividend and the prospect of the dividend being increased on a regular basis. We decided to screen top blue-chip companies, looking for those that will be increasing their dividends not only this year but beyond, and found three that are a sure bet.
Many of the companies we examined are proud members of the Dividend Aristocrats and the Dividend Kings, both of which we have covered for years here at 24/7 Wall St. The Dividend Aristocrats have raised their dividends for 25 consecutive years, while the Dividend Kings for 50 years or more. Dividend investors should grab this free report today: dividend legends.
Why do we cover dividend stocks?
Dividend stocks provide investors with reliable streams of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
Coca-Cola
Coca-Cola manufactures, markets, and sells various nonalcoholic beverages worldwide.
This company remains a top Warren Buffet holding as he owns a massive 400 million shares that pay a dependable 2.80% dividend. The Coca-Cola Co. (NYSE: KO | KO Price Prediction) 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
Back in February, the company’s quarterly dividend increased 5.4%, from 46 cents to 48.5 cents per common share. This increase was the company’s 62nd consecutive annual dividend increase, equivalent to a yearly dividend of $1.94 per share, up from $1.84 per share in 2023. It’s almost a slam dunk that investors will see a similar increase in early 2025.
Kenvue
Kenvue is the world’s largest pure-play consumer health company by revenue.
Spun off from Johnson & Johnson Inc. (NYSE: JNJ) last year, this potential total return home run pays a solid 4.36% 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 these brands:
- Tylenol
- Nicorette
- Zyrtec
The Skin Health and Beauty segment provides face and body care, hair care, sun care, and other products under these brands:
- Neutrogena
- Aveeno
- OGX
The Essential Health segment offers oral and baby, women’s health, and wound care products under these brands:
- Listerine
- Johnson’s
- Band-Aid
- Stayfree
In June, the company announced a 2.5% increase in its quarterly dividend, as its Board of Directors declared a $0.205 per share dividend on Kenvue common stock payable in the third quarter of 2024. Shareholders and those looking to buy the stock by the close of business on August 14, 2024, will be eligible for the dividend, which is payable on August 28, 2024. It’s a given that the company will raise the dividend again in 2025.
Realty Income
Realty Income is a real estate investment trust that invests in free-standing, single-tenant commercial properties in the United States, Spain, and the United Kingdom.
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 5.32% 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 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.
True to form, in June, the company announced an increase in its common stock monthly cash dividend to $0.2630 per share from $0.2625 per share. Given the strong history from the company you can count on another increase in 2025.
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