24/7 Wall St. Insights
- While much lower than June of 2022, inflation continues to hammer consumers.
- Prices rose 2.7% in September, above expectations for a 2.6% increase.
- 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.
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 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 recent inflation data is undoubtedly far better than the 9.1% increase that was printed in the summer of 2022, the reality for many Americans, and especially baby boomer seniors, is that many prices for everyday must-have items like food, energy, and other day-to-day needs remain very elevated.
Worried investors concerned over the sticky inflation need to look to high-yield dividend shares in the energy, health care, and consumer goods sectors for companies that will continue to outperform in an ongoing, albeit lower, inflation environment. We screened our 24/7 Wall St. inflation stock database and found five stocks that pay big, dependable, high-yield dividends that can continue to deliver regardless of price increases. All are rated Buy at top Wall Street firms we cover.
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.
Altria
One of the world’s largest producers and marketers of cigarettes and other tobacco-related products.
This tobacco company offers value investors a great entry point and a rich 8.08% dividend. Altria Group Inc. (NYSE: MO | MO Price Prediction) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.
The company provides cigarettes primarily under the Marlboro brand, as well as:
- Cigars and pipe tobacco, principally under the Black & Mild brand
- Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
- on! Oral nicotine pouches
It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.
Altria used to own over 10% of Anheuser-Busch InBev N.V. (NYSE: BUD), the world’s largest brewer. The company sold 35 million of its 197 million shares through a global secondary offering earlier this year. That represents 18% of their holdings but still leaves a hefty 8% of the outstanding shares in their back pocket. They also announced a $2.4 billion stock repurchase plan partially funded by the sale.
Conagra Brands
A leading American consumer packaged goods holding company.
This consumer packaged food giant is a very safe idea that pays a stellar 4.77% dividend. Conagra Brands Inc. (NYSE: CAG) and its subsidiaries operate primarily in the United States as a consumer packaged goods company.
The company operates through four segments:
- Grocery & Snacks
- Refrigerated & Frozen
- International
- Foodservice
The Grocery & Snacks segment primarily offers shelf-stable food products through various retail channels.
The Refrigerated & Frozen segment provides temperature-controlled food products through various retail channels.
The International segment offers food products in various temperature states through retail and food service channels outside the United States.
The Foodservice segment offers branded and customized food products, including meals, entrees, sauces, and various custom-manufactured culinary products packaged for restaurants and other food service establishments.
The company sells its products under these well-known brands:
- Birds Eye
- Marie Callender’s
- Duncan Hines
- Healthy Choice
- Slim Jim
- Reddi-Wip
- Angie’s
- BOOMCHICKAPOP
Enterprise Products Partners
This is one of the biggest publicly traded energy partnerships.
This company is one of the largest publicly traded energy partnerships and pays a 7.20% 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
Many Wall Street analysts like the stock because of its distribution coverage ratio. The company’s coverage ratio is well above 1x, making it relatively less risky in the MLP sector.
PepsiCo
As of 2023, Pepsi is the second most valuable soft drink brand worldwide behind Coca-Cola.
This top consumer staples stock posted earnings for the third quarter that were in line with expectations. It will continue to supply all the goods for the 2024 NFL football season tailgates and parties, and it pays a solid 3.26% dividend. PepsiCo Inc. (NYSE: PEP) is a worldwide food and beverage company.
Its Frito-Lay North America segment offers:
- Lays and Ruffles potato chips
- Doritos, Tostitos, and Santitas tortilla chips
- Cheetos cheese-flavored snacks, branded dips
- Fritos corn chips
The company’s Quaker Foods North America segment provides:
- Quaker Oatmeal
- Grits
- Rice cakes
- Natural granola and oat squares
- Pearl Milling mixes and syrups
- Quaker Chewy granola bars
- Cap’n Crunch cereal
- Life cereal
- Rice-A-Roni side dishes
PepsiCo’s North America Beverages segment offers beverage concentrates, fountain syrups, and finished goods under these brands:
- Pepsi
- Gatorade
- Mountain Dew
- Diet Pepsi
- Aquafina
- Diet Mountain Dew
- Tropicana Pure Premium
- Sierra Mist
- Mug brands
Pfizer
An American multinational pharmaceutical and biotechnology corporation headquartered at The Spiral in Manhattan.
This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been beaten down over the last few years as many are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide and pays a hefty 5.90% dividend, which has risen yearly for the last 14 years.
The company offers medicines and vaccines in various therapeutic areas, including:
- Cardiovascular metabolic and women’s health under the Premarin family and Eliquis brands
- Biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi brands
- Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga, and Paxlovid brands.
Pfizer also provides medicines and vaccines in various therapeutic areas, such as:
- Pneumococcal disease, meningococcal disease, tick-borne encephalitis
- COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba, and the Prevnar family brands
- Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis, and Cibinqo brands
- Amyloidosis, hemophilia, and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX, and Genotropin brands
Trading not far from its lowest split-adjusted level in 13 years, the stock is an incredible bargain at current levels and pays a massive dividend.
The pharmaceutical giant reported third-quarter 2024 Revenues of $17.7 billion, representing 32% year-over-year operational growth. Earlier this year, the company raised full-year 2024 revenue guidance to $59.5 to $62.5 billion and lifted adjusted diluted EPS guidance to $2.45 to $2.65. Patient investors will receive one of the highest blue-chip dividends, and shares trade at a reasonable 9.88 times estimated 2025 earnings.
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