24/7 Wall St. Insights

• The seemingly endless political season is almost over.
• It’s possible we won’t know the winner for a while.
• 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.

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. 

In simpler terms, it’s the sum of income and stock appreciation. Dividend stocks can boost investment success by delivering regular income and capital appreciation.

After one of the wildest and most bizarre political races in the history of our country, we are finally close to a resolution. Former President Donald Trump is trying to pull off a feat that was only accomplished once in American history. After winning and serving as the 45th President, he lost in 2020 to Joe Biden, who is completing his term as the 46th President. Mr. Trump is trying to match the achievement of President Grover Cleveland, the first Democrat elected after the Civil War who served as the 22nd President from 1885 to 1889, before losing in 1888. He was subsequently reelected to a second term in 1892.

Vice President Harris is attempting to be the first woman elected President after President Biden stepped down from running for a second term. Some questioned Ms. Harris’s appointment, but it’s moot now as we await the results. One thing is sure: There will be a separate set of winners and losers depending on who finally captures the office as the 47th President.

If Donald Trump wins, Wall Street thinks Consumer Staples, Chemicals, Beverages, Investment Trusts, and Infrastructure Companies are possible winners among a slate that includes three additional sectors. We screened those five, looking for some of the top dividend stocks in each category. Five look like incredible ideas, almost regardless of who wins. All are rated Buy by top Wall Street firms.

Why do we cover dividend stocks?

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.

Consumer Staples:

Altria

This tobacco company offers value investors a great entry point now and a rich 8.17% dividend. Altria Group Inc. (NYSE: MO) 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.

Chemicals:

LyondellBasell

This blue-chip chemical giant offers a very dependable 6.17% dividend. LyondellBasell Industries N.V. (NYSE: LYB) operates as a chemical company in:

• The United States
• Germany
• Mexico
• Italy
• Poland
• France
• Japan
• China
• the Netherlands
• Internationally

The company operates in six segments:

• Olefins and Polyolefins-Americas
• Olefins and Polyolefins-Europe, Asia, International
• Intermediates and Derivatives
• Advanced Polymer Solutions
• Refining
• Technology

It produces and markets olefins and co-products, polyethylene and polypropylene, propylene oxide and derivatives, oxyfuels and related products, and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol.

In addition, the company produces and markets compounding and solutions, including:

• Polypropylene compounds
• Engineered plastics, masterbatches
• Engineered composites, colors, and powders
• Advanced polymers, including catalloy and polybutene-1
• Refines heavy, high-sulfur crude oil, other crude oils, and refined products, including gasoline and distillates

Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications.

Beverages:

PepsiCo

This top beverage and consumer stock posted earnings for the third quarter that aligned with expectations. It will continue to supply all the goods for the 2024 NFL football season tailgates and parties and 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

Investment Trusts/Closed-End Funds:

Barings BDC

This business development company is an industry leader and pays a massive 11.34% dividend. Barings BDC Inc. (NYSE: BBDC) is a publicly traded, externally managed investment company elected to be treated as a business development company under the Investment Company Act 1940.

It seeks to invest primarily in senior secured loans, first-lien debt, unitranche, second-lien debt, subordinated debt, equity co-investments, and senior-secured private debt investments in private middle-market companies operating across various industries.

It specializes in:

• Mezzanine
• Leveraged buyouts
• Management buyouts
• ESOPs
• Change of control transactions
• Acquisition financings
• Growth financing
• Recapitalizations in lower-middle market, mature, and later-stage companies

It invests in manufacturing and distribution, business services and technology, transportation and logistics, and consumer products and services. It invests in the United States in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor-backed.

Infrastructure:

Kinder Morgan

This is one of the top energy stocks, remains a favorite across Wall Street, and pays a dependable 4.76% dividend. Kinder Morgan Inc. (NYSE: KMI) is an energy infrastructure company in North America.

The company operates through four segments:

• Natural Gas
• Products
• Terminals
• CO2

The Natural Gas Pipelines segment:

• Owns and operates the interstate and intrastate natural gas pipeline and underground storage systems
• Natural gas gathering systems and natural gas processing and treating facilities
• Natural gas liquids fractionation facilities and transportation systems
• Liquefied natural gas liquefaction and storage facilities

The Products Pipelines segment owns and operates refined petroleum products, crude oil and condensate pipelines, associated product terminals, and petroleum OKEpipeline transmit facilities.

The Terminals segment owns and operates liquids and bulk terminals that store and handle various commodities, including:

• Gasoline
• Diesel fuel
• Chemicals
• Ethanol
• Metals
• Petroleum coke
• Owns tankers

Lastly, the CO2 segment produces, transports, and markets CO2 to recover and produce crude oil from mature oil fields. It owns interests in and/or operates oil fields, gasoline processing plants, and a natural oil pipeline system in West Texas. It holds and runs approximately 83,000 miles of pipelines and 144 terminals.

Four Ultra-High-Yield Stocks Will Pay a Landslide of Monthly Dividends

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