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5 Magnificent Dividend Champions Are Passive Income September Bargains
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24/7 Wall St. Insights
- Interest rates are on the way lower, and dividend stocks are in favor.
- Passive income investors will be big buyers with bond yields collapsing.
- Passive income is simple: own quality dividends that pay you for doing nothing. Don’t miss out on our brand-new “7 Things I Demand in a Dividend Stock” report. It includes two A++ dividend stocks and how to spot future dividend winners that can put your returns on hyperdrive. Access two legendary, high-yield dividend stocks Wall Street loves.
Most dividend investors aim to secure a reliable passive income stream from quality dividend stocks. Passive income is a consistent unearned income that doesn’t require active traditional work. It’s a financial goal that can be achieved through various means, including investments, real estate, or side hustles.
The more passive income can help cover rising costs like mortgage, insurance, taxes, and other expenses, the easier it is for investors to put away money for future needs as they build to retirement.
One huge winning hand for passive income is investing in the Dividend Champions. These companies have raised their dividends for 25 years and longer but can be any size market cap-wise. They can range from small-cap to large-cap and don’t have to be in the S&P 500 like the Dividend Aristocrats.
We screened the current list, looking for reasonably priced stocks with significant upside potential for the rest of 2024. Five top companies look like bargains, all rated Buy at top Wall Street firms.
Why do we cover the Dividend Champions?
The key for investors with this group is that they don’t have to be in the S&P 500 and can be any market cap size. That opens the door for many new stocks that have paid reliable dividends for over 25 years.
Enterprise Products Partners
This company is one of the largest publicly traded energy partnerships and pays a 7.27% dividend. Enterprise Products Partners L.P. (NYSE: EPD) provides various midstream energy services, including:
- Gathering
- Processing
- Transporting and storing natural gas, natural gas liquids (NGL) fractionation
- Import and export terminalling
- Offshore production platform services
The company has four reportable business segments:
- Natural Gas Pipelines and Services
- NGL Pipelines and Services
- Petrochemical Services
- Crude Oil Pipelines and Services
One reason many analysts like the stock might be its distribution coverage ratio. The company’s coverage ratio is well above 1x, making it relatively less risky in the MLP sector.
Eversource Energy
This conservative stock idea is off the radar and pays a rich 4.24% dividend. Eversource Energy (NYSE: ES) is a public utility holding company that provides energy delivery services.
The company operates through four segments:
- Electric Distribution
- Electric Transmission
- Natural Gas Distribution
- Water Distribution segments
It transmits and distributes electricity, solar power facilities, and natural gas.
The company operates regulated water utilities that provide water services to approximately 241,000 customers.
It serves residential, commercial, industrial, municipal, and fire protection customers in Connecticut, Massachusetts, and New Hampshire.
NNN REIT
This Dividend Champion is another fresh idea for investors that pays a hefty 4.82% dividend. 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.
NNN is one of only three publicly traded REITs to have increased annual dividends for 34 or more consecutive years
UGI
This Dividend Champion offers a fat 6.26% dividend and stellar total return potential. UGI Corp. (NYSE: UGI) and its subsidiaries distribute, store, transport, and market energy products and related services in the United States and internationally.
The company operates through four segments:
- AmeriGas Propane
- UGI International
- Midstream & Marketing
- UGI Utilities
Its extensive network of 1,400 propane distribution locations distributes propane to approximately 1.3 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers.
The company distributes liquefied petroleum gases (LPG) to:
- Residential
- Commercial
- Industrial
- Agricultural
- Wholesale
- Automobile fuel customers
- Provides logistics, storage, and other services to third-party LPG distributors
In addition, it retails natural gas, liquid fuels, and electricity to approximately 12,400 residential, commercial, and industrial customers at 42,000 locations.
Further, the company distributes natural gas to approximately 677,000 customers in eastern and central Pennsylvania counties through its distribution system of roughly 12,500 miles of gas mains and supplies electricity to approximately 62,600 customers in northeastern Pennsylvania through 2,560 miles of lines and 14 substations.
Additionally, UGI operates electric generation facilities, which include:
- Coal-fired
- Landfill gas-fueled
- Solar-powered
- Natural gas-fueled facilities
- Natural gas liquefaction, storage, and vaporization facility
- Propane storage and propane-air mixing stations
- Rail transshipment terminals
It manages natural gas pipeline and storage contracts; develops, owns, and operates pipelines, gathering infrastructure, and gas storage facilities.
Universal
While this company’s products may not be for everyone, they have strong demand, have been in business for almost 150 years, and offer shareholders a hefty 6.20% dividend. Universal Corp. (NYSE: UVV) processes and supplies leaf tobacco and plant-based ingredients worldwide.
The company operates through two segments:
- Tobacco Operations
- Ingredients Operations
It procures, finances, processes, packs, stores, and ships leaf tobacco for sale to manufacturers of consumer tobacco products.
The company contracts, purchases, processes, and sells flue-cured, burley, and oriental tobaccos, which are primarily used in the manufacture of cigarettes. Dark air-cured tobaccos are also used to manufacture naturally wrapped cigars, cigarillos, and smokeless and pipe tobacco products.
Universal also provides value-added services, including:
- Blending, chemical, and physical tobacco testing
- Service cutting for various manufacturers
- Manufacturing reconstituted leaf tobacco
- Just-in-time inventory management services
- Electronic nicotine delivery systems
- Customer smoke testing services
Six High-Yield Dividend Stocks Under $25 Are the Passive Income Kings
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