24/7 Wall St. Insights

• The market is the most expensive in almost 40 years.
• Bargain-priced blue chip stocks are a steal now.
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “7 Things I Demand in a Dividend Stock,” plus get our two best dividend stocks to own today. Access two legendary, high-yield dividend stocks Wall Street loves.

Since 1926, dividends have significantly contributed to the S&P 500’s total return, accounting for approximately 32%. The remaining 68% comes from capital appreciation. This underscores the importance of sustainable dividend income and the potential for capital appreciation in shaping total return expectations.

A 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%).

While the massive 50% rally of the past two years has been a bonanza for investors, many top Wall Street strategists are starting to tap the brakes on the long-running rally as price-to-earnings (P/E) metrics have risen way above normal levels. The current S&P 500 blended earnings P/E ratio over the next 12 months is 23, up almost 2% from the previous quarter and 15% from the prior year. Based on the latest S&P 500 monthly data, the market is overvalued somewhere in the range of 103% to 170%.

We decided to screen our 24/7 Wall St. blue-chip dividend value database, looking for stocks trading under the $20 level that offer safety and dependable dividends. Five stocks look like tremendous values now.

Why do we cover dividend stocks?

Dividend stocks are a powerful tool for investors, providing a reliable stream of passive income. This income is unique in its ability to generate revenue without requiring the earner’s continuous active effort, making it an attractive financial strategy for those seeking to diversify their income streams or achieve financial independence.

Amcor

This Dividend Aristocrat makes sense as it produces always-needed products and pays a strong 4.53% 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. Its 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.

BASF

With a rich 7.33% dividend, this European industrial giant is a solid buy at current levels. BASF S.E. (OTC: BASFY) is a chemical company worldwide.

The company operates through six segments:

• Chemicals
• Materials
• Industrial Solutions
• Surface Technologies
• Nutrition & Care
• Agricultural Solutions

The Chemicals segment provides petrochemicals and intermediates.

The Materials segment offers advanced materials and their precursors for applications and systems comprising isocyanates, polyamides, and inorganic essential products and specialties for plastics and plastics processing industries.

The Industrial Solutions segment develops and markets ingredients and additives for industrial applications, such as:

• Polymer dispersions
• Resins
• Additives
• Electronic materials
• Antioxidants for automotive
• Plastics, paints and coatings
• Electronics
• Energy and resource industries

The Surface Technologies segment provides automotive OEM and refinish coatings, surface treatment, catalysts, battery materials, and precious and base metal services for the automotive and chemical sectors.

The Nutrition & Care segment offers ingredients for consumer goods in nutrition, home, personal care, and technical applications. It serves the food and feed producers, pharmaceuticals, cosmetics, detergents, cleaners, crop protection industries, and the fast-moving consumer goods sector.

The Agricultural Solutions segment provides seeds and seed treatment products, fungicides, herbicides, insecticides, biological crop protection products, and digital farming solutions.

Ford

This legacy carmaker pays shareholders a massive 5.42% dividend. Ford Motor Co. (NYSE: F) develops, delivers, and services a range of Ford trucks, commercial cars, vans, sport utility vehicles, and Lincoln luxury vehicles worldwide.

It operates through five segments:

• Ford Blue
• Ford Model e
• Ford Pro
• Ford Next
• Ford Credit

The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors, dealers, and dealerships to commercial fleet customers, daily rental car companies, and governments.

It also engages in vehicle-related financing and leasing activities to and through automotive dealers.

In addition, the company provides retail installment sale contracts for:

• New and used vehicles
• Direct financing leases for new cars to retail and commercial customers, such as leasing companies, government entities, daily rental companies, and fleet customers.

Further, it offers wholesale loans to dealers to finance the purchase of vehicle inventory, loans to dealers to finance working capital and enhance dealership facilities, purchase dealership real estate, and other dealer vehicle programs.

Walgreens Boots Alliance

This huge drugstore chain pays a gigantic 10.4% dividend, which could get cut as the company is going through a massive reorganization and closing 1200 stores. Even if the dividend is cut in half, it will remain over 5%. Walgreens Boots Alliance Inc. (NYSE: WBA) is a pharmacy-led health and beauty retail company with three segments:

• Retail Pharmacy USA
• Retail Pharmacy International
• Pharmaceutical Wholesale

The Retail Pharmacy USA segment sells prescription drugs and various retail products, including health, wellness, beauty, personal care, consumables, and general merchandise, through its retail drugstores.

It also provides specialty pharmacy services and mail services. This segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States and six specialty pharmacies.

Walgreens Boots Alliance’s Retail Pharmacy International segment is a testament to its diverse product offerings. It sells prescription drugs, health and wellness products, beauty products, personal care products, and other consumer products through its pharmacy-led health and beauty stores and optical practices.

The International segment has operations in:

• The United Kingdom
• Thailand
• Norway
• The Republic of Ireland
• The Netherlands
• Mexico
• Chile

The company also operates 550 optical practices, including 165 on a franchise basis.

The Pharmaceutical Wholesale segment wholesales and distributes specialty and generic pharmaceuticals, health and beauty products, home health care supplies, and equipment. It also provides related services to pharmacies and other health care providers.

Wendy’s

This fast-food favorite pays a tasty 5.21% dividend and has plenty of upside potential. Wendy’s Co. (NYSE WEN) and its subsidiaries operate quick-service restaurants in the United States and internationally.

It operates through:

• Wendy’s U.S.
• Wendy’s International
• Global Real Estate & Development segments

The company operates, develops, and franchises a system of quick-service restaurants specializing in hamburger sandwiches. It also owns and leases real estate properties. Previously known as Wendy’s/Arby’s Group, it changed its name in July 2011.

Six High-Yield Dividend Stocks Every Passive Income Investor Should Own in 2024

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