7 Dividend Stocks With Superior Fundamentals

  • The article covers dividend stocks to buy that boast robust fundamentals and spectacular long-term outlooks
  • Simon Property Partners (SPG): Incredible occupancy rates on the back of robust demand for commercial real estate
  • Lamar Advertising (LAMR): The billboard and digital signage business is back, generating top and bottom-line expansion
  • Coca-Cola (KO): Operates a recession-resistant business that is incredibly agile and has tremendous brand equity
  • Chevron (CVX): Benefitting immensely from the disequilibrium in the fossil fuels market
  • Realty Income (O): Its net lease business model is ideal in the current inflationary environment
  • VF Corp (VFC): Apparel conglomerate has multiple brands that can effectively navigate through economic swings
  • NRG Energy (NRG): Incredible performer over the past several years in the utility niche, with a robust yield of over 3.30%
Dividend Stocks to Buy - 7 Dividend Stocks With Superior Fundamentals

Source: Dmitry Lobanov/Shutterstock.com

The carnage at the stock markets this year has been unprecedented. Naturally, with risk-off sentiment in the market, investors are looking to pivot toward dividend stocks to buy.

This has been a bad year for equity investors, which reflects the broader economy. Interest and inflation remain at record levels, which is why investors have gravitated towards income stocks. Perhaps one of the great things about the bear market is that many of the top dividend stocks to buy are now more affordable than ever before.

The stocks discussed below have all shed considerable value in the past several months and now trade at much more attractive multiples. Moreover, these stocks have robust underlying businesses that have held firm despite the economic downturn.

SPG Simon Property Partners $102.11
LAMR Lamar Advertising  $96.53
KO Coca-Cola $62.00
CVX Chevron  $155.63
O Realty Income $66.60
VFC VF Corp $42.59
NRG NRG Energy  $42.22

Simon Property Partners (SPG)

building facade of simon property group (SPG)
Source: Jonathan Weiss / Shutterstock.com

Simon Property Partners (NYSE:SPG) is a real estate investment trust (REIT) specializing in Class A malls. These malls are typically newer and have higher-end tenants and amenities.

SPG’s portfolio has a healthy exposure in both high and slow-growth markets. Most of its portfolio has been seeing a marked increase in foot traffic which is why its fundamental strength has held up despite the economic conditions.

Occupancy rates were almost 94% during the second quarter, while sales improved by 2.4% on a year-over-year basis to $1.28 billion. Also, the sales figure beat analyst estimates by a remarkable $30 million.

Additionally, its valuation is down considerably, making its dividend yield explode to an incredible 7%. Underlying business momentum remains incredible, evidenced by robust demand for commercial real estate.

Lamar Advertising (LAMR)

an empty billboard on a highway
Source: Shutterstock

Lamar Advertising (NYSE:LAMR) is among the leading outdoor advertising businesses in the North American region.

The billboard and digital signage business operate over 352,000 displays across Canada and the U.S. For fiscal 2021, its revenues came in at a remarkable $1.79 billion, representing a 13.9% increase from 2020.

It’s back on track to generating top and bottom-line growth, and its business seems brighter than ever. This is evidenced by the healthy uptick in revenue and earnings growth in the past several quarters.

Additionally, company shares have moved southwards in the past few months due to fears regarding the broader economy. It’s trading at roughly 4.8 times forward sales, which is significantly below its five-year average.

More importantly, dividend yields are more than 5.16%, with a payout ratio of close to 96%, making this one of the more compelling dividend stocks to buy.

Coca-Cola (KO)

Coca-Cola Consolidated sign outside of their building. COKE Stock.
Source: Jonathan Weiss / Shutterstock

Global beverages giant Coca-Cola (NYSE:KO) operates an incredibly agile business with timeless brands that have, over time, become cash cows. With the inelasticity of its products, the company’s progress hasn’t been affected too much by inflation and other economic variables.

On top of that, it has been a dividend king, boasting over 50 years of growth in its payouts.

In the past few quarters, revenues have improved by double-digit margins while comfortably beating analyst estimates for its earnings. It reported incredible non-GAAP earnings per share of 70 cents in the second quarter, topping estimates of three cents. Also, it bested revenue estimates by $730 million making it one of the dividend stocks to buy for sustained growth.

Moreover, it estimates organic sales to fall in the 12% to 13% range from previous estimates of 7% to 8%. The solid results are a testament to its streamlined portfolio of brands and its spectacular strategies for expansion.

Chevron (CVX)

Chevron logo on blue sign in front of skyscraper building
Source: Jeff Whyte / Shutterstock.com

Chevron (NYSE:CVX) benefits from the disequilibrium in the fossil fuels market. With greater demand and constricted supply, company revenues have soared over 77%, a colossal increase from the 11% it generated on average in the past five years.

It presents an excellent way for investors to protect their portfolios from inflation and generate high income.

Furthermore, its oil-fueled cash flows have helped solidify its fortress-like balance sheet and strategically expand operations. Its cash balance currently stands at a whopping $12.5 billion.

Chevron’s stellar dividend portfolio boasts an incredible 3.6% yield with 34 years of consecutive growth. Additionally, with the massive increase in free cash flows of late, it is in a strong position to reward shareholders through buybacks and dividend hikes making it one of the better energy dividend stocks to buy.

Realty Income (O)

Single family homes. Real estate
Source: tokar / Shutterstock

Realty Income (NYSE:O)  operates a massive portfolio of approximately 11,000 net-lease properties in the U.S.

Its net-lease business entails owning the assets, but its tenants have to bear the operational costs. Such a business model is ideal in the current scenario where inflation is running rampant and pushing up costs.

Meanwhile, the REIT pays an impressive monthly dividend that has risen annually over the past 25 years. Its coverage is impeccable, averaging in the mid-to-high 70% range.

Additionally, its dividends have been effectively covered by its funds from operations, a metric that’s grown consistently over the past several years. Recently released results for its second quarter were impressive, and it increased its guidance for the year by a hefty margin.

VF Corp (VFC)

Source: ShutterstockProfessional / Shutterstock.com

VF Corp (NYSE:VFC) is an apparel conglomerate with a broad stable of brands with various trends, price points, and styles to meet consumer demand.

The company collects different brands at lower prices and then operates them until they can be sold or otherwise monetized at attractive valuations.

VFC has produced consistent earnings results over the past few decades and was back to producing record high earnings figures at the beginning of 2022. Given the current market conditions, it is bound to face some short-term pain in passing the effect of inflation to its consumers.

Nevertheless, it seems to be holding up well, and as history has shown, the dividend aristocrat can push through economic swings without burning its bottom line.

 

NRG Energy (NRG)

Close up of NRG logo on website against blurred background.
Source: Casimiro PT / Shutterstock.com

NRG Energy (NYSE:NRG) is an integrated U.S. electric utility company that serves over six million residential, industrial and commercial customers.

The firm was incorporated back in 1989 and currently employs over 6,500 employees. NRG produces and delivers electricity and related services.

It mainly generates energy from fossil fuels but aims to reduce emissions by 50% by 2050. It seems like a tall order at this point; however, if it can achieve its goals down the road, it could substantially grow its revenue base.

Its earnings results overall are impressive, growing revenues and EBITDA in the past five years on average by double-digit margins. Also, investing in NRG stock comes with a healthy dividend payout of $1.40 with a yield of over 3.30%.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.


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