Dividend Delights: 3 Stocks That Will Sweeten Your Investment Returns


  • Favoring dividend stocks? As inflation slows and rate cuts loom, Prologis, AT&T, and Medtronic offer strong yields and growth.
  • Prologis (PLD): Prologis offers a 3.6% dividend yield, bolstered by e-commerce growth projected at 9.49% through 2029.
  • AT&T (T): AT&T’s 6% forward yield is well above the sector average, driven by strong fiber and 5G growth.
  • Medtronic (MDT): Medtronic nears Dividend King status with 47 years of dividend increases and a 2025 EPS forecast of $5.40 to $5.50.
dividend stocks - Dividend Delights: 3 Stocks That Will Sweeten Your Investment Returns

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Dividend stocks are the best way to play a market potentially on the cusp of a massive rebound, thanks to the Federal Reserve potentially cutting rates three times if inflation stays low, which has made the market more optimistic.

The latest Bureau of Economic Analysis report shows that inflation cooled slightly in April.

However, JPMorgan analysts foresee a tough year, targeting 4,200 for the S&P 500. Not hopeful, Morgan Stanley expects 2024 to be ordinary.

As markets may go either way, it’s smart to hedge your bets and invest in solid buy-rated dividend stocks. The first one we’ll look at is an adaptable REIT, profiting from the secular growth in online shopping, leading to an upside of over 17%.

Investors wanting consistent income and industry leadership will like strong quarterly outcomes and sophisticated North American communication links. The second option, which comes with over 16% upside, is also attractive.

Finally, a medical tech powerhouse nearing Dividend King status may appeal to investors seeking reliable income from dividend stocks and new AI-focused surgical innovations; the upside is around 17%.

Prologis (PLD)

The Prologis (PLD) logo displayed on a smartphone screen.
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Prologis (NYSE:PLD) is notable for raising its dividend for 11 years in a row, and its dividend yield of 3.6% puts it in the top 50% of the real estate category and quality dividend stocks. With growth in the future due to rising demand for transportation and industrial buildings, important parts of the e-commerce supply chain, PLD’s upside of 18% makes plenty of sense.

What’s more, PLD shares are available at a historical discount after PLD slashed its core funds from operations forecast for 2024 to a range of $5.37 to $5.47 per share, down from the $5.42 to $5.56 range; at the middle point, this change shows a drop of about 1.3%; PLD’s EPS prediction is now expected to be between $3.15 and $3.35, 2.3% less than before.

However, PLD earned 10% more than forecast in a challenging market in which Hamid Moghadam, Prologis’ co-founder, chairman, and chief executive officer, said clients are cutting expenses.

Despite these issues, PLD is a smart investment since the e-commerce industry is predicted to increase 9.49%, sending the market from $4.12 trillion in 2024 to $6.48 trillion in 2029. As a real estate investment trust, PLD will benefit from the three probable rate decreases, which will cut borrowing costs and boost property values.

AT&T (T)

AT&T Retail cell phone and mobility store. T stock
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AT&T (NYSE:T) has a forward yield of around 6%, better than the communications sector average of 2.6%; no wonder analysts predict a 21% upside.

The telecom company’s first-quarter 2024 results were outstanding due to a huge increase in fiber and 5G clients, which led to 19.5% fiber sales growth and 252,000 net AT&T Fiber additions. The Latin America segment grew revenues by 20.4% due to stronger foreign exchange rates and equipment sales.

AT&T also reported adding Michigan and Mississippi networks. To narrow the digital divide and enhance internet access, the business is substantially investing in 5G and fiber networks throughout Michigan.

By late 2026, AT&T intends to shift 70% of its wireless network traffic to systems with open capabilities. This project intends to improve the scalability and administration of various hardware suppliers at each cell site, and it begins in partnership with Ericsson and Fujitsu.

In addition, AT&T may sell the remaining 30% of its feared DirecTV shares to contend with cord-cutting issues.

On the other hand, BellSouth owners agreed to join AT&T in February to make a full-service communications company by combining BellSouth’s strengths in the area with AT&T’s powers in the national and foreign markets.

Medtronic (MDT)

Medtronic (MDT) sign outside office building representing healthcare stocks
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Medtronic’s (NYSE:MDT) 3.44% forward dividend yield puts it in the top 50% of its sector, which averages a yield of 1.58%. With 47 years of consecutive dividend increases, it’s very close to attaining a coveted spot among 53 Dividend Kings.

Also intriguing are Medtronic’s payout growth rates: 1.45% for one year, 4.14% in three, 5.65% in five, 8.85% in 10, and roughly 13% in twenty.

The medical device maker had a great fourth quarter in 2024; sales were higher than expected at $8.59 billion, and the dividend was raised thanks to growth across many areas, such as diabetes, heart pumping, and spinal technologies. MDT expects EPS between $5.40 and $5.50 for the fiscal year 2025, reflecting long-term growth and new developments in medical technology.

Expanding its line of pain management products, the Food and Drug Administration in the United States authorized Medtronic’s Inceptiv closed-loop rechargeable spinal cord stimulator for the treatment of chronic pain.

On the product side, Medtronic showcased new advances in artificial intelligence for surgical care at the Genius Summit 2024, discussing how AI is changing endoscopy techniques and making gastrointestinal treatments more effective.

Finally, in a major shakeup, Linnea Burman is now the President and Senior Vice President of Medtronic’s Neurovascular Business to promote expansion in important therapeutic areas of MDT’s business.

On the date of publication, Faizan 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.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.

Article printed from InvestorPlace Media, https://investorplace.com/2024/06/dividend-delights-3-stocks-that-will-sweeten-your-investment-returns/.

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