2023 has been a mixed year. While growth stocks enjoyed the upside momentum, several industries suffered due to high inflation and low consumer spending. However, it looks like better days are ahead, and if you are planning to invest in dividend stocks, consider the company fundamentals before making a move. If the company is stable, has a solid balance sheet and has a strong dividend history, it will continue generating steady income for years to come. As we inch closer to 2024, it is time to reevaluate the stocks you own and invest in those that look promising and have the possibility of generating passive income. With that in mind, here are the three strong buy dividend stocks to consider.
Chevron (CVX)
Oil giant Chevron (NYSE:CVX) has rewarded investors for years and it aims to increase capital spending by 11% in 2024. This is a sign that it will be focusing on new projects and will be able to deliver strong returns. When it has more money, it will be able to return more to the shareholders. It aims to invest around $15.5 billion to $16.5 billion into capital projects in the coming year and has a few acquisitions that will work as catalysts for business growth.
Chevron has agreed to purchase Hess Corp. (NYSE:HES) for $53 billion, and while the deal hasn’t closed yet, it is expected to add long-term value to the company. It has also just closed the acquisition of PDC Energy, and this deal is expected to add 1 billion barrels of oil equivalent reserves.
In the third quarter, the company reported an EPS of $3.05 and currently enjoys a dividend yield of 4.25%. It announced a quarterly dividend of $1.51 which isn’t too bad in the current times. With the high capital budget on the projects, Chevron will see significant growth in the coming year. I believe it will be able to sustain the dividends and continue rewarding shareholders for years to come. The stock is down 18% year to date and is much lower than the 52-week high of $187.
The company is focused on investments that pay off in the long term. It has increased the dividend payout for 36 years straight, and it aims to grow the dividend even faster, at 8% in January. Higher capital spending, increased cash flow, and steady dividends make the company worth an addition to your portfolio.
AT&T (T)
Many have written off the telecom giant AT&T (NYSE:T) but it still has a long way to go. I believe the worst is over for it. The company is currently working on revamping the wireless network services and has signed a deal with Ericsson(NASDAQ:ERIC) to invest $14 billion over the next five years.
This deal could be a game-changer for the business, and it has given a boost to the stock. It is expected that this collaboration will help cover about 70% of the company’s wireless traffic across the U.S. T stock is up 5% over the past month and trading at $16.42 today. I believe the stock can make a comeback in 2024.
The company expects to generate $16.5 billion in free cash flow this year and has been steadily growing its wireless subscriber base. In the third quarter, it added 468,000 net phone subscribers. It is already working on revamping the Open RAN technology and this is an investment that will pay off in the coming years.
As free cash flow and subscribers continue to grow, it will be able to reward shareholders significantly.
The company is investing in next-gen technology and this shows its commitment to catering to the needs of the users. As a dividend stock, AT&T is a strong pick. It enjoys a dividend yield of 6.75% and it has enough cash flow to support this dividend. Add T stock to your portfolio before it starts to soar in 2024.
Morgan Stanley (MS)
If you aren’t willing to start trusting traditional banks again, you can consider Morgan Stanley (NYSE:MS) which sets itself apart from the rest. While it is a bank, the big reason to invest in it is the diversified revenue streams.
The majority of its revenue comes from the wealth management division which ensures consistency and stability. Since it doesn’t work like a lending business, it has a steady flow of income and it is predictable income to some extent.
With an improvement in the market conditions, it looks like Morgan Stanley could start soaring with the investment banking business. There is a positive sentiment in the market and as we see new IPO openings, we could see Morgan Stanley report higher underwriting revenue numbers.
For the third quarter results, it reported an EPS of $1.38 and a revenue of $13.3 billion, much higher than analyst expectations. However, its wealth management business disappointed investors by only adding $36 billion in net assets.
The stock is significantly down from the 52-week high of $101 and has dropped by 3% year to date. This is a good chance to grab the dividend stock. It enjoys a dividend yield of 4.10% and recently announced a quarterly dividend of $0.85. The company is stable, has an impressive balance sheet, and several catalysts are working in its favor which shows that it has a high chance of bouncing back in the coming year.
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.
