3 High-Yield Dividend Darlings to Secure Your Income


  • Dividend stocks can offer passive income if the corporations continue to grow. These three top picks can deliver on that objective.
  • Automatic Data Processing (ADP): This stock gets overlooked among growth stocks but has a high yield and respectable long-term returns.
  • Broadcom (AVGO): The company’s dividend yield remains solid even after significant appreciation due to AI tailwinds.
  • Exxon Mobil (XOM): The firm offers a high dividend and oil prices are likely to increase.
dividend stocks - 3 High-Yield Dividend Darlings to Secure Your Income

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Dividend investing is a slow and steady path to financial wealth. Investors can accumulate dividend stocks and receive higher payouts every quarter. Dividend reinvestments and hikes aid dividend income goals, but you have to pick the right stocks to maximize your gains.

Some investors pursue stocks with higher yields that don’t grow as rapidly as their lower-yielding counterparts. For instance, Nvidia (NASDAQ:NVDA) offers a dividend, but at 0.03% it is far too low for dividend investors. Sure, the stock has incredible one-year and five-year gains, but it’s not the right fit for investors who want high dividend yields.

Luckily, there are plenty of high-yield dividend stocks available. Investors may want to consider these high-yield dividend stocks when making their next portfolio picks.

Automatic Data Processing (ADP)

In this photo illustration the stock market information of Automatic Data Processing, Inc. displays on a smartphone with the logo of Automatic Data Processing, Inc. ADP stock.
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Automatic Data Processing (NASDAQ:ADP) is the type of boring stock that gets overlooked as growth stocks march higher. But over one million clients use ADP for assistance with human resources, payroll and compliance. That vast customer base helps the company regularly generate revenue and grow earnings. 

The firm reported 7% year-over-year (YOY) revenue growth in the first quarter of fiscal 2024. Net earnings increased by 10% YOY and reached $859 million. The company’s guidance suggests revenue growth will come in at 6%-7% for the entire fiscal year. 

Revenue growth isn’t booming, but the company is still expanding and has a decent forward price-to-earnings (P/E) ratio of 26. Shares are flat over the past year but have gained 76% over the past five years. The company recently hiked its quarterly dividend from $1.25 per share to $1.40 per share. That represents a 12% YOY increase in the dividend payout, making it one of the good high-yield dividend stocks for investors to consider.

Broadcom (AVGO)

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Broadcom (NASDAQ:AVGO), might not have the highest dividend yields out there, but the stock still has a respectable 1.75% yield. Shares have more than doubled over the past year and are up 367% over the past five years.

The semiconductor firm is hitting its stride as more businesses jump into artificial intelligence (AI). Broadcom offers an advanced AI chip that can handle the higher bandwidth required for artificial intelligence tools. 

Broadcom also boasts exceptional dividend growth. The company hiked its quarterly dividend from $4.60 to $5.25 at the end of 2023. That represents a 14.1% YOY increase, a normal occurrence for the company. Broadcom’s quarterly dividend payout has roughly doubled from 2019 to 2023. During that stretch, the quarterly payout went from $2.65 per share to $5.25 per share.

Broadcom is starting the year on a good note with a 15% year-to-date (YTD) gain. The firm is gaining momentum as other key players in artificial intelligence have expressed optimism about its earnings and the industry. Given the company’s potential, investors looking for high-yield dividend stocks should take a look at AVGO.

Exxon Mobil (XOM)

Exxon Retail Gas Location
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Exxon Mobil (NYSE:XOM) has the highest dividend yield on this list at nearly 4%. Although the company has a P/E ratio under 10, low valuations are normal for oil companies. Exxon Mobil had a rough 2023 that featured declining revenue and earnings. However, an upswing is likely in 2024.

Oil prices dictate Exxon Mobil’s earnings, and higher oil prices can lead to higher profits. Inflation ticked higher in December. One slightly higher inflation reading isn’t enough to spook investors, but conflicts in the Red Sea region can result in meaningful inflation.

The conflict in the Red Sea is currently disrupting the Suez Canal shipping route. This development has increased the amount of time it takes for vessels to arrive at their destinations. That also means more fuel is being used which subsequently raises shipping prices. All of those extra expenses will translate into higher costs for various goods.

The conflict has been taking place since October 2023. Oil has always been a good hedge for inflation since it is a commodity. Exxon Mobil performed well in 2022 when many stocks tumbled and can be a good pick among high-yield dividend stocks if inflation and higher oil prices return.

On this date of publication, Marc Guberti held long positions in ADP and AVGO. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

Article printed from InvestorPlace Media, https://investorplace.com/2024/01/3-high-yield-dividend-darlings-to-secure-your-income/.

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