3 Reliable Dividend Stocks That Fit in Any Investor’s Portfolio


  • Johnson & Johnson (JNJ): JNJ sits atop the list of reliable dividend stocks, as it has raised its payouts in 61 straight years and trades at a low valuation.
  • Realty Income (O): The company pays a monthly dividend and has raised its dividend for 102 consecutive quarters.
  • McDonald’s (MCD): The fast food giant is fresh off all-time highs and has raised its dividend in 46 straight years.
Reliable Dividend Stocks - 3 Reliable Dividend Stocks That Fit in Any Investor’s Portfolio

Source: Dmitry Lobanov/Shutterstock.com

Growth investors could learn a thing or two from income-oriented investors when it comes to reliable dividend stocks. Not only do these dividend stocks pay a healthy and consistent yield, many of these names trade quite well too.

A number of growth stocks are still 40% to 50%, or more, below their all-time highs. At the same time, there are a handful of dividend stocks that are not just hitting 52-week highs, but that are hitting all-time highs despite the difficult market environment.

Admittedly, these holdings tend to lag the market during the last gasp of the bull market, but I think both growth and income-oriented investors could use a little variety in their portfolios.

Let’s step back and take a closer look at a few reliable dividend stocks to buy. Some will be at or near their highs, while others will be on a discount.

Johnson & Johnson (JNJ)

A red Johnson & Johnson (JNJ) sign hangs inside in Moscow, Russia.
Source: Alexander Tolstykh / Shutterstock.com

Johnson & Johnson (NYSE:JNJ) has to be one of the best bargains out there when it comes to reliable dividend stocks.

There are a number of dividend stocks that trade at a low valuation. However, they also tend to come with negative or no growth and are generally priced at a discount for a reason. That’s not to say J&J is perfect by any means, but this is a very well-run and consistent firm.

First, shares pay out a 3% dividend yield at current prices. While that’s not earth-shattering, it’s a solid yield. Second, the company has not only paid but has raised its dividend for 61 consecutive years.

For more than six decades now, the company has annually increased its payout. That’s through wars, recessions, periods of high inflation and company-specific incidents, like the Tylenol tampering incidents and recall.

For this, investors are paying just 15x earnings, even as analysts expect mid-single-digit earnings and revenue growth this year.

Realty Income (O)

realty income logo highlighted by a magnifying glass on a web browser
Source: Shutterstock

There is a caveat with Realty Income (NYSE:O), which is that not every investor is comfortable with REITs. Even companies as consistent as Realty Income, better known as “O stock,” can bring a degree of unknown to investors.

So what’s this caveat?

The caveat is risk. A recession will weigh on the company’s stock price, not only because the overall market will likely be under pressure, but because REITs in general will struggle. Higher interest rates can be a headwind and worries over the commercial real estate market persist.

Realty Income certainly isn’t the most exciting stock in the market, but it’s remarkably consistent. First it pays its dividend monthly, not quarterly, and  it has raised that dividend for 102 consecutive quarters. In other words, rather than one annual increase a year, Realty Income gives investors a modest raise four times a year.

That quarterly raise has been going on for more than 25 years! For that, any investor could benefit from putting this name in a long-term portfolio.

McDonald’s (MCD)

McDonald's restaurant in Thailand.
Source: Tama2u / Shutterstock

Last but not least, we have McDonald’s (NYSE:MCD). While Realty Income is muddling along and J&J stock is far from thriving, McDonald’s stock is hitting all-time highs. Shares are up 12% this year, 20% over the past 12 months and 70% over the last three years. All three measures top the S&P 500.

As a result of the stock’s strong performance, the dividend yield sits just under 2.1%. That brings up the old debate stock performance vs. dividend income.

While many would hesitate to call McDonald’s a growth stock, its performance is hard to criticize. That said, it’s one of the reliable dividend stocks any investor could put in their portfolio.

The firm has raised its dividend for 46 consecutive years, while analysts expect 9% to 10% earnings growth this year and next year.

On the date of publication, Bret Kenwell held a long position in JNJ. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2023/05/3-reliable-dividend-stocks-that-fit-in-any-investors-portfolio/.

©2024 InvestorPlace Media, LLC