Dividends remain an important source of income for many investors.
And to be a Dividend Aristocrat is a rare feat and special accomplishment. These are stocks of companies that have raised their dividend payment to stockholders for 25 consecutive years or longer. Currently, only 68 Dividend Aristocrats are among the stocks listed in the S&P 500 index, comprising 14% of all the stocks within the benchmark exchange. For investors, these high yielding, high paying dividend stocks help them to both grow their portfolio and cover their living expenses, often in retirement.
For people seeking income from their investments, these stocks are the cream of the crop. Let’s delve into three dividend aristocrats for a reliable income stream in 2024.
Walmart (WMT)
Walmart (NYSE:WMT) has been a steady dividend stock since it issued its first payment of 5 cents a share to stockholders back in 1974. The company has increased its dividend every year since, taking the payout up to 57 cents today, giving WMT stock a yield of 1.47%.
If the company hikes its dividend in 2024, it will mark 50 years of consecutive price increases and make Walmart a “Dividend King.” The chances of this happening are quite high given Walmart’s strong financials and cash position.
Recently, Walmart reported third-quarter financial results that topped Wall Street forecasts. The world’s largest retailer announced earnings per share (EPS) of $1.53 versus the expected $1.52. Revenue in the quarter totaled $160.80 billion compared to $159.72 billion that was anticipated. And, Walmart continues to get a boost from its grocery business, which has thrived during a period of high inflation. Digital sales channels also remain strong, having increased 24% year over year (YOY) in Q3.
WMT stock is up 8% in 2023, trailing the S&P 500 index that has increased 25% on the year. This presents an opportunity for investors to buy the dividend aristocrat before the share price takes off.
Coca-Cola (KO)
Soft drink maker Coca-Cola (NYSE:KO) is a Dividend King as well as a Dividend Aristocrat. It’s raised its payout to shareholders for more than 50 consecutive years since 1964!
Today, the company’s dividend stands at 46 cents per share each quarter for a yield of 3.13%. That’s nearly double the average yield of 1.60% among stocks listed on the S&P 500 index.
Like Walmart, Coca-Cola’s dividend payment and annual increases are made possible by the company’s strong financial results and cash position. As is almost always the case, Coca-Cola announced Q3 results that beat Wall Street forecasts on both the top and bottom lines. The company reported EPS of 71 cents versus 69 cents that had been anticipated. Revenue for Q3 came in at $11.91 billion compared to $11.44 billion expected among analysts. Coca-Cola’s Q3 sales rose 8% YOY.
KO stock is down 7% in 2023, mostly due to concerns that the new crop of weight loss medications will harm the company’s sales and future growth. However, those worries seem overblown. Buy the dip.
Lowe’s (LOW)
Home improvement retailer Lowe’s (NYSE:LOW) is another Dividend King. The company has reliably paid a cash dividend to its stockholders every quarter since going public in 1961. Further, it has raised the dividend payment for more than 50 straight years.
Currently, Lowe’s pays a quarterly dividend of $1.10 per share, giving LOW stock a yield of 1.95%. With more than 2,000 stores and annual sales approaching $100 billion, Lowe’s can afford to continue lifting its payout to shareholders.
Lowe’s reported Q3 EPS of $3.06, which was better than the $3.03 forecast by analysts. Revenue of $20.47 billion came in lighter than the $20.89 billion that was expected on Wall Street. The company’s guidance also did not meet expectations. Now, Lowe’s says it expects sales will total $86 billion for all of this year, down from $87 billion previously. The company claims it is experiencing a pullback by consumers when it comes to spending on big-ticket items. That should reverse as interest rates come down in 2024. LOW stock has risen 13% in 2023.
On the date of publication, Joel Baglole 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.
