24/7 Wall St. Insights

• The 2025 expected Social Security COLA will be less than 3%.
• Passive income can help boost income during retirement.

While getting to retirement age can be a blessing and a curse, the reality of counting on the U.S. government to provide for your needs is not the best idea. The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67; for anyone born in 1960 or later, full retirement benefits are payable at age 67.

With the youngest baby boomers (Americans born between 1946 and 1964) approaching retirement age, it is becoming increasingly important to focus on magnificent dividend stocks that will supply significant passive income either in or out of designated retirement accounts like IRAs.

As mentioned, the 2025 cost of living adjustment (COLA) is expected to be the lowest since 2021, likely under 3%. Given the persistent inflation, especially for needed items like food and housing, those working towards retirement or already there will need to have a well-thought-out plan for passive income streams that can supplement Social Security benefits. Being prepared is key to financial stability.

Passive income is a steady stream of unearned income that doesn’t require active traditional work. Shared ideas for earning passive income include investments like dividend stocks, bonds, mutual funds, real estate, and additional income-producing side hustles.

We screened our 24/7 Wall St. passive income dividend stock research universe, looking for companies investors can buy now and hold for the long haul that pay safe and dependable payouts to shareholders. All are rated Buy at 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.

Apple Hospitality REIT

Apple Hospitality REIT Inc. (NYSE: APLE), a publicly traded real estate investment trust that pays a solid 6.12% dividend and stands out in the market with its unique offering.

Despite its name, it is not affiliated with the technology giant. However, it offers a solid total return potential, owning one of the largest and most diverse portfolios of upscale, room-focused hotels in the United States.

Apple Hospitality’s portfolio comprises 220 hotels with over 28,900 guest rooms in 87 markets throughout 37 states and one property leased to third parties.

Concentrated on industry-leading brands, the Company’s hotel portfolio comprises:

• 97 Marriott-branded hotels
• 119 Hilton-branded hotels
• Four Hyatt-branded hotels

Bristol-Myers Squibb

This top company remains a solid pharmaceutical stock to own long-term, offering an outstanding entry point and a massive 4.12% dividend. Bristol-Myers Squibb Co. (NYSE: BMY) discovers, develops, licenses, manufactures, and markets pharmaceutical products worldwide.

The company offers products in:

• Hematology
• Oncology
• Cardiovascular
• Immunology therapeutic classes

Bristol-Myers Squibb products include:

• Revlimid, an oral immunomodulatory drug for the treatment of multiple myeloma
• Opdivo for anti-cancer indications
• Eliquis, an oral inhibitor indicated for the reduction in risk of stroke/systemic embolism in NVAF and for the treatment of DVT/PE
• Orencia for adult patients with active RA and psoriatic arthritis, as well as reducing signs and symptoms in pediatric patients with active polyarticular juvenile idiopathic arthritis

The company also provides:

• Sprycel for the treatment of patients with unresectable or metastatic melanoma
• Abraxane, a protein-bound chemotherapy product
• Implicit for the treatment of multiple myeloma
• Reblozyl for the treatment of anemia in adult patients with beta-thalassemia

Chevron

This integrated giant is a safer way for investors looking to position themselves in the energy sector. It pays a rich 4.02% dividend. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries. It operates in two segments.

The Upstream segment is involved in the following:

• Exploration, development, production, and transportation of crude oil and natural gas
• Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
• Transportation of crude oil through pipelines
• Transportation, storage, and marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

• Refining crude oil into petroleum product
• Marketing crude oil, refined products, and lubricants
• Manufacturing and marketing renewable fuels
• Transporting crude oil and advanced products by pipeline, marine vessel, motor equipment, and rail car
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

Chevron announced last year that it has entered into a definitive agreement with Hess Corp. (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion.

Three lawsuits have been filed against Hess, charging inadequate disclosure over the sale, and Chevron has said arbitration over Hess’ Guyana assets could delay the closing timeline until October 2025. However, most Wall Street analysts feel the deal will ultimately be completed, and Chevron will emerge even more powerful in the energy sector.

Conagra Brands

This consumer packaged food giant is a very safe idea that pays a stellar 5.11% dividend. Conagra Brands Inc. (NYSE: CAG) operates as a consumer packaged goods food company primarily in the United States.

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 food service 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

Dominion Energy

Many of the Wall Street firms we cover are still very positive on utilities despite the sharp move higher this year, and this company pays a strong 4.59% dividend. Dominion Energy Inc. (NYSE: D) operates through four segments:

• Dominion Energy Virginia
• Gas Distribution
• Dominion Energy South Carolina
• Contracted Assets

The Dominion Energy Virginia segment generates, transmits, and distributes regulated electricity to residential, commercial, industrial, and governmental customers in Virginia and North Carolina.

The Gas Distribution segment engages in

• Regulated natural gas gathering
• Transportation
• Distribution and sales activities
• Distributes nonregulated renewable natural gas

This segment serves residential, commercial, and industrial customers.

The Dominion Energy South Carolina segment generates, transmits, and distributes electricity and natural gas to residential, commercial, and industrial customers in South Carolina.

The company’s portfolio of assets included approximately:

• 30.2 gigawatts of electric generating capacity
• 10,500 miles of electric transmission lines
• 85,600 miles of electric distribution lines
• 94,200 miles of gas distribution lines
• Dominion serves approximately 7 million customers

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