The holiday season is here, and if you haven’t budgeted for your shopping, now is the perfect time to do so. With inflation under control and consumer spending slowly improving, we will have a good holiday season. If you do not want to use your credit card for purchases or haven’t set aside an amount, you might want to consider making your money work for you. Investing in dividend stocks allows you to enjoy passive income to help pay for your holiday shopping.
Savvy investors know that certain stock investments can pay off in the short and long term. Here are the three dividend stocks to buy for holiday cash.
Johnson & Johnson (JNJ)
One of the largest healthcare companies in the world, Johnson & Johnson (NYSE:JNJ) is known for its stellar dividends. It recently spun off the consumer health division into a new Kenvue unit. Many investors are concerned about whether it can keep up with the dividends; I think this spin-off will boost JNJ’s revenue in the coming years. It will ensure that Johnson & Johnson continues to make the most of the revenue and growth from its top-performing pharmaceutical sector and the medical devices segment.
In the third quarter results, it beat revenue expectations and reported a revenue of $21.35 billion and an EPS of $2.66. With a 6% year-over-year rise, the company continues to enjoy a dominant position in the industry. It has revised the full-year guidance and expects sales to come between $83.6 billion and $84 billion, while the EPS comes from $10.07 to $10.13.
Exchanging hands at $150, the stock is down 15% year to date and is trading much lower than the 52-week high of $181. JNJ is a dividend king who has paid dividends for the past 60 years. The company has a dividend yield of 3.15% and announced a quarterly dividend of $1.19. You can pay for your holiday shopping at an annual dividend of $4.76.
With 1000 shares, you could earn $4,760 in dividends while the stock continues to grow over time. That said, the company also keeps growing its dividends with time, which means your passive income will only increase in the coming years. It has enough earnings to keep the dividends strong for the future.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) is one of the renewable energy stocks I’ve been recommending for some time now. The business is a blend of both worlds: renewable energy and utility. Its Florida Power and Light is currently the largest utility and has 5.8 million consumer accounts. This is one segment that continues generating money for the business. The other segment is NextEra Energy Resources, the world’s largest renewable energy generator.
In the third quarter, the EPS hit $0.94, a 10.6% increase from the previous year. The company’s utility business contributed over 60% to the earnings, and the resources segment generated about 40%. A strong dividend stock, NextEra Energy has increased dividends for 29 consecutive years and has a dividend yield of 3.20%. It has recently announced a quarterly dividend of $0.47. The company pays an annual dividend of $1.87 and expects to increase the dividends by 10% annually through 2024.
Besides the high dividend yield, one solid reason to invest in the stock is the strong future of renewable energy. NextEra Energy has strong prospects, with the world moving towards renewables and the growing demand for renewable energy across different sectors.
Down 30% year to date, NEE stock hasn’t been this low since 2020, which means now is an opportunity like no other. Trading at $58 today, this stock is a strong buy and hold. It will pay for your holiday shopping and will generate impressive returns if you choose to hold it for the years to come.
PepsiCo (PEP)
When discussing dividend stocks, one cannot miss out on PepsiCo (NASDAQ:PEP). The company owns its place in the industry and is a dividend king. It is a hot stock today and has shown impressive commitment towards rewarding shareholders year after year.
While PEP stock has seen a 6% dip year to date, it is trading at $167 today. The stock was at $196 at its peak in May and has been moving downwards since then. PepsiCo has diversified portfolio helps bring steady revenue year after year.
The global giant has enjoyed an 8% dividend growth per year since 2010; I believe this will continue for years to come. Pepsi is a relatively stable stock with a dividend yield of 3.03% and a quarterly dividend of $1.27. This makes it one of those dividend stocks to consider.
This attractive stock offers the perfect blend of passive income and growth. Besides the strong dividend growth, its financials speak for themselves. PepsiCo reported impressive third-quarter results and posted an EPS of $2.24 with a revenue of $23.45 billion.
The company hiked its expectations for the third straight quarter and now expects EPS growth of 13% from the previous forecast of 12%. With an impressive 10% revenue growth and a 13% profit jump, PepsiCo is one stock that will never disappoint. Its future looks bright, and it has positioned itself as one of the best players in the industry.
On the date of publication, Vandita Jadeja did not hold (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.
