Dividend stocks can be a beacon of stability for income-oriented investors. These companies distribute a portion of their profits to shareholders through quarterly or annual payouts. This can provide investors with an additional source of passive income during volatile periods.
Additionally, dividend stocks tend to be more mature, established companies with strong track records. Investors can have peace of mind knowing the company is less likely to go bust. With the AI exuberance in the market continuing to persist, dividend stocks can provide some level of comfort to your portfolio.
Now, let’s discover the 3 most striking dividend stocks to buy now in February 2024.
PepsiCo (PEP)
PepsiCo (NASDAQ:PEP) is without a doubt one of the top dividend stocks to buy now. They’re a leading multinational food and beverage company with an extraordinary track record returning cash to shareholders. Furthermore, PepsiCo just announced a 7% increase in their dividend, marking their 52nd annual increase.
PepsiCo covers both manufacturing and distribution of its food and beverage product line. They offer a diverse portfolio of popular brands including Pepsi, Mountain Dew, Lay’s, Gatorade and Quaker. The company was able to close off the 2023 fiscal year on a strong note, despite ongoing supply chain constraints, geopolitical tensions and macroeconomic instability.
In fiscal year 2023, PepsiCo’s revenue increased 6% YOY to $91.5 billion. While EPS saw a modest 2% growth, Wall Street is more excited about the 2024 outlook. PepsiCo continues to see strength in the Latin America, with operating profit up 67% from the year prior. Management issued 2024 guidance with approximately 4% organic revenue growth and 8% EPS growth. With the company’s annual dividend reaching $5.42 per share, now is a great time to scoop up shares for the long term.
Automatic Data Processing (ADP)
Automatic Data Processing (NASDAQ:ADP) is an enterprise software company that provides HR, payroll and benefits administration services to over 1 million companies across the globe. After closing off a strong 2023 fiscal year, ADP momentum has continued well into 2024.
ADP’s superior operational performance and dedicated commitment to shareholders rewards is unmatched. More recently, the company announced their 49th consecutive year of dividend increases bringing their annual yield to $5.60 per share. This places them in the prestigious dividend aristocrat club, averaging over 10% growth in the last 5 years.
In their latest Q2 FY24 results, ADP revenue increased 6% YOY to $4.6 billion. EPS increased 9% YOY to $2.13 per share, with adjusted EBITDA margin up 20 basis points to 24.6%. Momentum has carried over from the first quarter, driven by record bookings and strong customer retention. If you’re looking for a top dividend stock to buy for 2024, ADP is definitely one of the first places to look.
UnitedHealth Group (UNH)
UnitedHealth Group (NYSE:UNH) is a titan in the healthcare industry and owns two transformative businesses; UnitedHealthcare and Optum. They continue to see strong diversified growth across both segments, and the company’s 2024 outlook is extremely bullish.
UnitedHealth Group closed off another record year in 2023. Revenue increased 15% YOY to $371.6 billion. However, the metric that stood out the most was operating income up 13.8% YOY to $32.4 billion. Diversified growth has been driving profitability as UNH’s EPS hit a record of $25.12 per share.
Optum has been a key growth driver for the company, and management is forecasting revenues of $400 to $403 billion in FY24. Additionally they project adjusted EPS in the $27.50 to $28.00 per share range. UnitedHealth Group has showcased its resilience in 2023, delivering strong operating results in a tougher macroeconomic environment. Now might be an optimal time for investors to jump the gun on this compelling dividend stock in February 2024.
On the date of publication, Terel Miles 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.
