SPECIAL REPORT The Top 7 Stocks for 2024

7 Dividend Stocks to Secure Your Retirement Income

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  • Diamondback Energy (FANG): With a vast 468,000-acre footprint and a 12-year production horizon, Diamondback’s robust $820 million free cash flow highlights its operational strength and shareholder value.
  • PepsiCo (PEP): PepsiCo’s resilience shines through its 51-year dividend growth streak, promising stability and growth potential in the dynamic consumer market.
  • Restaurant Brands International (QSR): Boasting a diverse fast-food portfolio and capitalizing on consumer trends, Restaurant Brands International offers a solid 3.03% dividend yield with a solid five-year dividend growth rate.
  • Continue reading the list for the best dividend stocks for retirement!

 

dividend stocks for retirement - 7 Dividend Stocks to Secure Your Retirement Income

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For investors gearing up for retirement, pursuing the right balance in one’s portfolio often leads to dividend stocks for retirement. These gems efficiently balance stability with a sprinkle of innovation, offering a robust income stream. The seven dividend stocks discussed in the article effectively have proven to be steady earners over the years, boasting commendable dividend yields.

Remember, crafting a retirement portfolio isn’t a straightforward process. It demands a tailored approach, considering where you stand in your career journey. This diverse list caters to various career stages, united by a common aim: to protect and grow your hard-earned money. Let’s delve into these seven retirement stock picks that offer an excellent balance of upside and stability.

Diamondback Energy (FANG)

diamondback energy logo on its website to represent oil stocks
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Diamondback Energy (NASDAQ:FANG) is an independent energy powerhouse in the Permian Basin, making waves with its robust oil and natural gas production. Spanning roughly 468,000 acres across the Midland and Delaware basins, the enterprise boasts a few of the highest-quality reserves in its niche. After 2022, Diamondback’s proven reserves stood at a robust 2,033 million barrels of oil equivalent. This positions the company comfortably with a 12-year production horizon at current levels.

The company delivered stellar third-quarter results, with oil production volumes soaring by 16% year-over-year, a testament to the company’s robust operational capabilities. This volume growth was effectively paired with a strong free cash flow (FCF) performance, generating a powerful $820 million or $4.58 per share.

Despite recent industry mergers and acquisitions, Diamondback remains a standout, focusing on sustainable long-term growth and operational excellence. Moreover, in the third quarter alone, it returned 81% of its free cash flow to shareholders, translating to a generous $3.37 per share dividend. This approach, combined with a forward dividend yield of 2.18% and a five-year dividend growth rate of 54.30%, underscores Diamondback’s dedication to providing value to its shareholders.

PepsiCo (PEP)

Pepsi (PEP) Factory in Samara, Russia. Pepsi logo on a blue warehouse.
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PepsiCo (NASDAQ:PEP) remains a beacon of stability and growth in the ever-evolving consumer market. Known for its diversified business portfolio, the company has effectively navigated market fluctuations with aplomb, underpinned by superior sales growth and an expanding product line. This adaptability reinforces its position as a growing business and a reliable investment choice.

Despite facing a modest year-to-date dip of 6.4%, PepsiCo’s prospects shine bright, mainly with the upcoming holiday season and improving consumer sentiment. This temporary setback paves the way for potential gains, highlighting the firm’s resilience and long-standing ability to thrive in testing market conditions. The recent financials are marked by a 6.7% year-over-year revenue increase, reaching $23.45 billion and an EPS of $2.25 per share.

For dividend investors, PepsiCo stands out with its commendable track record. The company offers a forward dividend yield of 3% and boasts a forward annual payout of $5.06. Moreover, PepsiCo’s dividend growth history is impressive, with a remarkable 51-year streak of dividend increases. This makes PepsiCo not just a household name in the consumer goods sector.

Restaurant Brands International (QSR)

A photo of a Burger King light-up sign outside a Burger King restaurant representing QSR stock.
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Restaurant Brands International (NYSE:QSR) is a true titan in the fast food industry, with its success anchored in its diverse portfolio, featuring household names such as Burger King, Popeye’s, Tim Horton’s, and others.

The company’s recent financials are telling, with its EPS of 90 cents and revenue of $1.84 billion showing a 6.4% jump in sales year-over-year. Despite the impact of inflation and other macroeconomic headwinds, consumers have preferred affordable, fast food options, which has positioned Restaurant Brands incredibly well to capitalize on this trend.

For dividend-focused investors, Restaurant Brands International presents an appealing proposition. The company offers a forward dividend yield of 3.03% with an annual forward payout of $2.20. Additionally, with a five-year dividend growth rate of 7.02% and a consistent increase over the past seven years, Restaurant Brands International emerges as a solid choice for investors seeking growth and stability in the fast food sphere.

Realty Income Corporation (O)

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Realty Income Corporation (NYSE:O) is a colossal real-estate-investment-trust commanding a market capitalization north of $38 billion, which stands as a testament to stability and growth in its niche. It boasts a portfolio of over 13,000 properties across the U.S., U.K., Spain, Italy, Ireland, and Puerto Rico.

Several factors bolster the appeal of Realty Income. Firstly, the cooling off of inflation is a positive sign for the discretionary spending power of its tenants. Secondly, the trust’s longevity, having thrived for over 50 years, speaks volumes about its ability to navigate various market cycles effectively. Thirdly, its growing property portfolio, with an incredible occupancy rate of 98.8%, underscores robust and sustained demand. 

Investors looking for reliable income streams will find Realty Income’s current yield of 5.63% particularly attractive. As a monthly dividend company, it offers a forward annual payout of $3.07, maintaining a payout ratio of 74.17% while offering a consistent dividend growth track record spanning 25 years.

Devon Energy (DVN)

An image of a hand holding a smartphone displaying the Devon Energy Corporation logo in front of a computer screen
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Devon Energy (NYSE:DVN) has witnessed a 25% drop in its stock price in the past year, which presents a compelling case for income-focused investors. This dip has resulted in an attractive dividend yield of 1.8%, backed by a solid history of 18 consecutive payouts. With a five-year dividend growth rate of 22.74%, Devon Energy demonstrates both resilience and potential for solid long-term growth.

The company’s third quarter earnings report has placed it in the spotlight as one of the top energy stocks for income investment. Despite falling short on its top line results by $190 million against analyst expectations, Devon’s bottom line tells a different story, reporting adjusted earnings of $1.65 per share, surpassing consensus estimates by nine cents. This performance indicates a robust operational efficiency that goes beyond surface numbers.

Moreover, production at Devon is on an upswing, driving its free cash flow to new heights. The company is on track to generate a significant $3.2 billion in free cash flow in 2024. Coupled with its A-graded profitability rates and industry-leading metrics, Devon Energy emerges as a resilient player in the energy sector

Visa (V)

several Visa branded credit cards
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Visa (NYSE:V), a fintech titan, continues to dominate the credit and debit card realms, facilitating over 192 billion transactions across more than 160 countries in 2022. This expansive reach has resulted in massive profits that have benefitted both the company and its shareholders. In the fiscal fourth quarter of 2023, Visa reported an impressive revenue of $8.6 billion, marking an 11% increase from the previous year and an income of $4.7 billion, translating into earnings of $2.27 per share.

Furthermore, a testament to its technological innovation is the $3 billion invested in AI over the past decade, which has powered a sophisticated platform featuring hundreds of AI models. These models are pivotal to over 100 products, including Visa’s CyberSource Decision Manager, and have been critical in thwarting approximately $27 billion in fraud in 2022.

For dividend investors, Visa presents an attractive proposition with a forward dividend yield of 0.81%, an annual forward payout of $2.08, and a modest payout ratio of 21.35%. With a five-year dividend growth rate of 16.27% and a consistent dividend growth streak of 15 years, Visa exemplifies innovation in the fintech space and stands out as a reliable investment choice for those seeking steady growth and shareholder returns.

Philip Morris International (PM)

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2023 presented a challenging landscape for Philip Morris International (NYSE:PM), but the company showcased remarkable resilience and foresight. In pivoting from traditional cigarettes to innovative alternatives such as heated tobacco and nicotine pouches, the sin stock is looking to fortify its portfolio effectively.

This strategic move has enriched its smoke-free offerings, including the Zyn brand and the successful IQOS line. These products contribute more than 35% to its revenue, with the company dominating a 75% market share in heat-not-burn products. The goal is to derive over two-thirds of its sales from these products by 2030.

During the third quarter, the company witnessed an 11.3% organic sales growth, mainly fueled by IQOS and Zyn. Moreover, with projections showing an 8% revenue increase and a 10% EPS growth in 2023, Philip Morris is not just adapting; it’s leading the charge in its niche. Investors eyeing dividend stocks will find Philip Morris an attractive option. The company offers a robust forward dividend yield of 5.53%, with consistent dividend growth over the past 14 years and a five-year growth rate of 2.94%.

On the date of publication, Muslim Farooque 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

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.


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