One of the best ways to protect your portfolio, and generate consistent income, is with some of the best dividend stocks. Most notably, those with a strong history of dividend payouts, strong growth, and economic moats.
Look at Coca-Cola (NYSE:KO), for example. Not only has it paid out a consistent dividend for 61 years, but it also has a strong economic moat with exceptional demand. It also just declared a regular quarterly dividend of 46 cents per share, payable Dec. 15 to shareowners of record of the company as of the close of business Dec. 1. That and it doesn’t hurt it’s one of Warren Buffett’s favorite stocks.
Some of the other best dividend stocks to consider as we head into New Year 2024 include:
PepsiCo (PEP)
Much like Coca-Cola, PepsiCo (NASDAQ:PEP) offers products that are in considerable demand. It also has a strong economic moat, and a good amount of growth ahead, and a 3.05% yield to boot.
Most recently, it declared a quarterly dividend of $1.265 per share — a 10% increase year-over-year (YOY). That’s payable on Jan. 5, 2024 to shareholders of record at the close of business on Dec. 1, 2023, and is also one of the best dividend stocks to own now.
Earnings have been solid, with PEP posting third-quarter earnings of $2.24 a share from $1.97 YOY. Revenue jumped to $23.45 billion from $21.97 billion. Core earnings were $2.25 a share. Analysts were looking for $2.15 a share on revenue of $23.41 billion. PEP also expects its annual core earnings to grow about 13% to $7.54 from prior expectations of 12%.
Lowe’s (LOW)
For the last 51 years, Lowe’s (NYSE:LOW) has been consistently paying out dividends. At the moment, it carries a yield of 2.12%, and just recently declared a quarterly cash dividend of $1.10 per share, payable Feb. 7, 2024, to shareholders of record as of Jan. 24, 2024.
Earnings have been okay. Most recently, LOW posted GAAP EPS of $3.06, which beat expectations by four cents. However, revenue of $20.47 billion was missed by $390 million. LOW also trimmed its forecast. For full-year 2023, it expects same-store sales to fall about 5%, as compared to earlier expectations for a decline of 2% to 4%. Overall sales are expected to fall to $86 billion, as compared to previous expectations for $87 billion to $89 billion.
That’s to be expected with a weaker housing market in 2023. However, with signs of improvement ahead, LOW should also see improvements with higher dividends.
AGNC Investment Corp. (AGNC)
There’s also monthly dividend stocks like AGNC Investment Corp. (NASDAQ:AGNC), a REIT that invests in residential mortgage-backed securities, where principal and interest payments are guaranteed by the U.S. government or a U.S. government agency.
Even better, the REIT carries a yield of about 16.4% and just declared a cash dividend of 12 cents per share. Helping, Bank of America analysts just raised their price target on AGNC to $8.75 from $7.50.
And, according to President and CEO Peter Federico, “As challenging as this period has been for all bond market participants, the current opportunity for both levered and unlevered investments in Agency MBS remains historically attractive on both an absolute and relative basis,” as quoted by Seeking Alpha.
Exxon Mobil (XOM)
With oil prices pulling back, another one of the best dividend stocks to buy is Exxon Mobil (NYSE:XOM). It slipped to a recent low of $99.55 — which puts it at strong support dating back to late 2022. Helping, the company just said it would boost its share buyback program to $20 billion once it closes its acquisition of Pioneer Natural Resources (NYSE:PXD). And, while we wait for the XOM stock to recover, we can collect its 3.82% yield.
When it comes to XOM, buy it and forget about it. The company will continue to be exceptionally profitable moving forward and is currently trading at less than 10x earnings. Better, analysts at TD Cowen recently raised their price target on XOM to $118 from $110, with a market perform rating.
Energy Transfer (ET)
With a yield of 9.4%, Energy Transfer (NYSE:ET) is a buy on the latest pullback to $13.30. The company, which owns and operates about 125,000 miles of pipeline and other energy assets across 41 states, also trades at just 8x forward earnings and about half of sales. ET is also benefiting from a tight natural gas market and the decline in Russian exports to Europe.
Earnings haven’t been too shabby either. While revenues declined by about 9.6% YOY to $20.74 billion, it still beat expectations by $350 million. Adjusted EBITDA was also up to $3.54 billion from $3.09 billion, YOY as well. Better, JP Morgan recently raised its price target on ET to $18 from $17, with an overweight rating.
Invesco S&P Small Cap Dividend Low Volatility ETF (XSHD)
Or, for even more safety and diversification at a low cost, there are exchange-traded funds like the Invesco S&P Small Cap Dividend Low Volatility ETF (CBOE:XSHD). With an expense ratio of 0.30%, the ETF tracks the S&P Small Cap 600 Low Volatility High Dividend Index and will invest about 90% of its total assets in the 60 securities on that index — all of which provide high dividend yields with low volatility. Better, the XSHD has a current annual yield of about 8% at the moment.
Some of its top holdings include Cal-Maine Foods (NASDAQ:CALM), Universal Corp (NYSE:UVV), Ready Capital (NYSE:RC), and New York Mortgage Trust (NASDAQ:NYMT) to name a few.
Global X Super Dividend ETF (SDIV)
Another one of my favorite dividend-paying ETF, which I last mentioned on Nov. 27 is the Global X Super Dividend ETF (NYSEARCA:SDIV). With a 12.42% yield and an expense ratio of 0.58%, the ETF pays out a monthly dividend. It holds 103 stocks spread across mortgage REITs, financials, energy, materials, utilities, industrials, and consumer discretionary.
Holdings include Omega Healthcare (NYSE:OHI), Starwood Properties (NYSE:STWD), Arbor Realty Trust (NYSE:ABR), Annaly Capital (NYSE:NLY), and Medical Properties (NYSE:MPW) to name just a few.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
