Although the idea of acquiring the highest-yielding enterprises seems lucrative, investors right now should arguably focus on safe dividend stocks to buy. These securities often undergird consistently profitable companies that enjoy revenue predictability. Right now, predictability is more important ahead of an uncertain market environment.
To be sure, the above warning doesn’t necessarily mean you’re stuck with sub-1% yielding entities. Far from it, on a relative scale, you can find high-yielding safe stocks. It’s just that when it comes to dividend investing, the idea is to play the long game. Therefore, you don’t want to just pocket some income one quarter and then watch your investment crash and burn the next.
In fairness, with the benchmark equities index up double-digit percentages for the year, a conservative approach might not seem appropriate. Nevertheless, small fissures – such as rising unemployment – indicate that market participants should seek safety first. On that note, below are June 2023 dividend stocks to buy.
Home Depot (HD)
One of the most reliable businesses available, Home Depot (NYSE:HD) easily ranks among the safe dividend stocks to buy. Fundamentally, throughout inclement conditions, Home Depot stores stay open (when feasible), providing a vital service to customers in need. We all experienced that firsthand during the Covid-19 disaster, when Home Depot kept its doors open during the night hours so that people can purchase essential goods.
To be fair, I wouldn’t classify it as one of the outright high-yielding safe stocks. However, the home improvement retailer more than holds its own with a forward yield of 2.66%. Also, its payout ratio comes in at 52.46%, which offers little cause for sustainability-related concerns. Also, it commands 14 years of annual dividend increases, a status management won’t want to give up cheaply.
On the financials, Home Depot benefits from consistent profitability. As well, its trailing-year net margin stands at 10.75%, beating out 86.59% of its peers. On the top line, the company prints a three-year revenue growth rate (on a per-share basis) of 15.2%, beating out 76.53% of rivals. It makes a strong case for top dividend stocks to buy.
Billed as a global power leader, Cummins (NYSE:CMI) designs, manufactures and distributes engines, filtration, and power generation products. Per its public profile, the company’s products range from diesel, natural gas, electric and hybrid powertrains, and powertrain-related components. Thanks to its broad industrial relevancies, CMI in many ways makes for an ideal case for safe dividend stocks.
While CMI hasn’t been off to a great performance in 2023, over the past one-year period, it gained over 22%. Financially, Cummins delivers on the operational front, posting a three-year revenue growth rate of 9.3%, above 61.54% of rivals. Also, its trailing-year net margin comes in at 8.37%, above 67.38%.
Despite the solid print, the market prices CMI at a forward multiple of only 12.36. As a discount to projected earnings, Cummins ranks better than 78.33% of companies listed in the industrial products space. For passive income, Cummins features a forward yield of 2.62%. With a payout ratio that sits at 32.13%, investors can trust the yield. Therefore, it’s one of the June 2023 dividend stocks to consider for conservative investors.
An agribusiness and food company, Bunge (NYSE:BG) makes an easy case for safe dividend stocks to buy. Thanks to the extraordinary pertinence of its business, demand should be both strong and predictable. According to its corporate profile, Bunge’s expansive network feeds and fuels a growing world, creating sustainable products and opportunities for more than 70,000 farmers and the consumers they serve across the globe.
Still, relevancy doesn’t always translate to upside market performance. Since the January opener, BG fell more than 3%. In the trailing one-year period, it’s up less than 2%, which is absolutely not impressive. However, Bunge’s three-year revenue growth rate pings at 14.7%, above 73.77% of sector players. It’s also consistently profitable, which is hardly a surprise.
Notably, though, the market prices BG at a forward multiple of 8.21, ranking favorably below 89.29% of its peers. If you want dividend investing at a bargain, Bunge might intrigue you. Finally, the company carries a forward yield of 2.87% with a payout ratio that sits at 23.13%. For a balanced approach to the market, BG may be one of the top dividend stocks.
An investment bank and financial services firm, Citigroup (NYSE:C) is one of the top sector players in the world. To be fair, the regional banking crisis might raise eyebrows in terms of labeling Citi as one of the safe dividend stocks. However, the ugliness in the banking space hasn’t yet reached the stalwarts.
On the financials, Citigroup carries a rather mediocre profile. For example, its three-year revenue growth rate comes in at 5%, which is a bit off the sector median of 6.1%. Also, it’s consistently profitable but with a trailing-year net margin of 19.52% (lower than the median 26.75%), C stock is hardly remarkable.
So, why mention Citigroup in a list of safe dividend stocks? One reason is its multiple of 6.47. As a discount to earnings, the bank ranks better than nearly 68% of the competition. Also, C shares trade at a sales multiple of 1.16, well below the sector median of 2.14. Also, Citi happens to be one of the high-yielding safe stocks, offering a forward yield of 4.4%. Also, with a payout ratio sitting at 31.67%, it might attract some looks.
Another riskier idea among safe dividend stocks to buy, Qualcomm (NASDAQ:QCOM) as a technology powerhouse might not seem appropriate to the underlying theme. However, as the world’s leading wireless tech innovator, the company is instrumental in the ongoing 5G rollout. As well, with advanced solutions such as artificial intelligence requiring greater connectivity, QCOM may be an ideal play for dividend investing.
And on that front, it holds its own quite well with a forward yield of 2.67%. Since the tech sector’s average yield sits at 1.37%, QCOM ranks among the high-yielding safe stocks on a relative basis. Also, the company commands 21 years of consecutive dividend increases. Again, that’s a status that the firm’s leadership team won’t want to give up cheaply.
On the financials, Qualcomm features a three-year revenue growth rate of 25%, beating out 78.37% of sector rivals. Also, its book growth rate during the same period impresses at 55.3%. Despite the stout figures, the market prices QCOM at a forward multiple of only 12.21. As a discount to projected earnings, Qualcomm ranks better than 86.26% of the competition.
As a global hydrocarbon energy giant, Shell (NYSE:SHEL) might not seem immediately effective as one of the safe dividend stocks to buy. After all, the political and ideological winds consistently push the zero net emissions narrative. However, Shell and other fossil fuel giants should remain pertinent for many years (perhaps even decades) to come. Given the energy density of hydrocarbons, it’s a tough resource to just outright quit.
Because of tough economic circumstances, SHEL posts a not-bad, not-great performance in the charts. Since the Jan. opener, the security gained just a hair over 7%. In the trailing one-year period, it moved up nearly 13%. Nevertheless, contrarians targeting dividend investing opportunities should give Shell another look. Specifically, the market prices SHEL at a forward multiple of 6.16. As a discount to projected earnings, the company ranks better than 63.53% of the competition.
Finally, Shell features a dividend yield of 3.61% along with a payout ratio of only 19.11%. If you’re seeking yield sustainability, SHEL warrants further investigation.
A pharmaceutical behemoth, Pfizer (NYSE:PFE) gained both popularity and notoriety among some circles for its role in developing a Covid-19 vaccine. However, with both the pandemic itself and fears associated with the crisis fading away, PFE seems risky. Indeed, since the beginning of this year, PFE gave up 29% of equity value. At the same time, it may be one of the safe dividend stocks for patient investors.
Almost invariably, Pfizer will leverage its acumen earned through messenger-RNA research to forward other viable therapeutics and vaccines. So, while the sharp revenue loss in the first quarter of this year is admittedly distracting, astute investors should look to what the pharma giant can do in the future.
In the meantime, PFE trades at a compelling discount. Currently, the market prices shares at a forward multiple of 10.93. As a discount to projected earnings, Pfizer ranks better than 75.78% of its peers. In closing, Pfizer carries a forward yield of 4.5% and a payout ratio of only 46.66%. Therefore, it’s also arguably one of the high-yielding safe stocks to buy.
On the date of publication, Josh Enomoto 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.