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- The market is pricing in two 25-basis-point rate cuts for the rest of 2024.
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- 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.
Dividend stocks are a favorite among investors for good reason. They provide a steady income stream 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.
At 247 Wall St., we consistently highlight the long-term potential of total return to our readers, as it is one of the most effective ways to boost the prospects of overall investing success. Once again, total return is the collective increase in a stock’s value plus dividends.
After a two-year bull market ignited by the promise of artificial intelligence and its possibilities, investors are becoming nervous that it may be time for a severe market correction. Given the potential for a significant pullback, we were intrigued when Wall Street boutique leader BTIG posted the 25 worst-performing S&P 500 stocks from 10/12/2022 to 10/12/2024.
The list featured some blue-chip giants we love. They all pay huge and dependable dividends and might offer contrarian growth and income investors some significant upside for the share prices while mitigating investors’ downside, as they all are down at least 25% over the last two years. We screened the list, which included two Dividend Kings stocks, companies that have raised their dividends for at least the previous 50 years. We found five stocks that nervous investors should consider now. All are rated Buy at top Wall Street firms and pay at least a 3.45% dividend.
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.
AES
An American utility and power generation company with a top dividend stock.
This conservative utility stock offers a hefty 3.95% dividend and a significant upside potential. AES Corp. (NYSE: AES | AES Price Prediction) and its subsidiaries operate as a diversified power generation and utility company in the United States and internationally.
The company owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market.
It uses various fuels and technologies to generate electricity, such as:
- Coal
- Gas
- Hydro
- Wind
- Solar
- Biomass
- Renewables, comprising energy storage and landfill gas
The company owns and/or operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers.
ADM
An American multinational food processing and commodities trading corporation.
This solid Dividend King is an excellent play for volatile markets and offers a very reasonable entry point and a solid 3.45% dividend. Archer Daniels Midland Co. (NYSE: ADM) processes oilseeds, corn, wheat, cocoa, and other agricultural commodities.
The company operates through the following segments:
- Ag Services and Oilseeds
- Carbohydrate Solutions
- Nutrition
The Ag Services and Oilseeds segment includes activities related to the origination, merchandising, crushing, and further processing of oilseeds such as soybeans and soft seeds, such as cottonseed, sunflower seed, canola, rapeseed, and flaxseed into vegetable oils and protein meals.
The Carbohydrate Solutions segment engages in corn wet milling and dry milling activities and converts corn into sweeteners, starches, and bioproducts.
Lastly, the Nutrition segment provides customer needs for food, beverages, health and wellness, and more.
Devon Energy
A company engaged in hydrocarbon exploration in the United States, and another top dividend stock.
This energy company utilizes the variable dividend strategy to pay investors a huge 4.67% dividend. Devon Energy Corp. (NYSE: DVN) is an independent energy company that primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs) in the United States and Canada. It operates approximately 19,000 wells.
The company also offers midstream energy services, including:
- Gathering
- Transmission
- Processing
- Fractionation
- Marketing to natural gas producers, NGLs, crude oil, and condensate producers through its natural gas pipelines, plants, and treatment facilities
Production is weighted towards crude oil, while growth opportunities are liquids-focused. The Delaware Basin, SCOOP/STACK, Eagle Ford Shale, Canadian Oil Sands, and the Barnett anchors the company. Devon also owns equity in the publicly traded midstream MLP EnLink.
Hormel Foods
An American food processing company founded in 1891 in Austin, Minnesota, and now a Dividend King.
With a dependable 3.62% dividend and a host of well-known products, this Dividend King is another very safe idea for investors now. Hormel Foods Corp. (NYSE: HRL) develops, processes, and distributes various meat, nuts, and other food products to retail, food service, deli, and commercial customers in the United States and internationally.
The company operates in three segments:
- Retail
- Foodservice
- International
Hormel Foods provides various perishable products, including fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamoles, and bacon; and shelf-stable products comprising canned luncheon meats, nut butter, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, nutritional food supplements, and others.
It sells its products under these
brands:
- Hormel
- Always Tender
- Applegate
- Austin Blues
- Bacon 1
- Black Label
- Bread Ready
- Burke
- Café H
- Ceratti
- Chi-Chi’s
- Columbus
- Compleats
- Corn Nuts
- Cure 81
- Dan’s Prize
- Di Lusso
- Dinty Moore
- Don Miguel
- Doña Mariaembasa
- Fast N Easy
- Fire Braised
- Fontanini
- Happy Little Plants
- Herdez
- Hormel Gatherings
- Hormel Square Table
- Hormel Vital Cuisine
- House Of Tsang
- Jennie-O
- Justin’s
- La Victoria
- Layout
- Lloyd’s
- Mary Kitchen
- Mr. Peanut
- Natural Choice
- Nut-rition
- Old Smokehouse
- Oven Ready
- Pillow Pack
- Planters
- Rosa Grande Sadler’s Smokehouse
- Skippy
- Spam
- Special Recipe
- Thick & Easy
- Valley Fresh
- Wholly
Pfizer
An American multinational pharmaceutical and biotechnology corporation.
This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been beaten down over the past two 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 5.78% dividend, which has risen yearly for the past 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. Pfizer reported revenues of $13.3 billion in the second quarter, representing 3% year-over-year operational growth, despite an expected decline in COVID revenues and a 14% year-over-year operational increase in revenues from the company’s non-COVID product portfolio.
The pharmaceutical giant 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 get paid one of the highest blue-chip dividends, and shares trade at a reasonable 9.88 times estimated 2025 earnings.
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