Dividend Dynamos: 3 Stocks Delivering Consistent Payouts in Turbulent Times


  • Explore the resilience of dividend stocks, proven by the Dividend Aristocrats Index, showing solid returns and stability during economic shifts.
  • Chevron (CVX): Chevron’s strong return on capital and expansion through the Hess acquisition support its continuous dividend growth, backed by a 37-year history of increases.
  • Genuine Parts (GPC): GPC’s sustained dividend growth and strategic acquisitions strengthen its position in the auto parts sector while benefiting from an aging vehicle fleet.
  • Realty Income (O): Realty Income offers a high 5.91% yield, consistent monthly dividends, and strategic property investments, enhanced by a triple net lease model.
dividend stocks - Dividend Dynamos: 3 Stocks Delivering Consistent Payouts in Turbulent Times

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Dividend stocks are the way to go if you want to take advantage of the mini-rally so far this year, with the S&P 500 gaining 5% in May thanks largely to Nvidia (NASDAQ:NVDA) beating earnings, announcing a 10-for-1 stock split, and the rise of generative AI plus potentially three rate cuts this year is also helping shore up sentiment.

In addition, within the next few weeks, we can expect several positive inflation data points, such as falling prices for used cars and lower owner’s equivalent rent, according to Fundstrat’s Tom Lee, leading to a possible 4% rise in the S&P 500 in June.

On top of that, a record $6 trillion in cash is sitting around because of the high interest rates. However, investors are putting their money back into the stock market because companies are making a lot of money, and tech giants like Nvidia are doing well, so let’s explore three stocks with double-digit upsides and industry-beating yields.

What’s more, regardless of the dovish Fed, elections in November, and geopolitical tensions, dividend stocks outperform non-dividend payers, as shown by the 2008 financial crisis, COVID-19, and the dot-com bubble burst. From 1990 to 2020, the Dividend Aristocrats Index returned 12.4% and the S&P 500, 10.7%, according to S&P Dow Jones Indices.​

Chevron (CVX)

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Chevron (NYSE:CVX), a Dividend Aristocrat up just 5% this year, is in the process of acquiring energy company Hess Corp (NYSE:HES) in a $53 billion all-stock deal, following the approval of Hess shareholders, expanding Chevron’s presence and capabilities in the oil and gas sector.

However, even without the Hess Corp deal, CVX continues to do well. With a 12.4% return on capital utilized, the company produced 3.35 million barrels of net oil equivalent daily in Q1 2024. The quarter’s cash flow from operations was $6.8 billion, while stockholders received $6 billion.

In 2024, Chevron plans to spend $15.5 to $16.5 billion on its consolidated businesses and $3 billion on affiliates helping finance upstream oil and gas activities and low-carbon technology developments.

In addition to oil and gas, Chevron created the $500 million Future Energy Fund III to promote low-carbon goods. Chevron is also planning a Louisiana factory to process oilseeds to generate green fuels and use a carbon capture and storage facility to reduce carbon emissions in the San Joaquin Valley.

With a payout ratio of 45%, CVX has plenty of room to build on its 37 consecutive dividend increases; analysts rate the oil and gas giant a strong buy with a potential 19% upside.

Genuine Parts (GPC)

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With 69 consecutive dividend raises, Genuine Parts (NYSE:GPC) is a secure and trustworthy company among dividend stocks with a traditional business model; after an 8% drop in the past month, it trades at an appealing price.

GPC has sold auto and industrial parts globally since 1928, having outlets in North America, Australia, New Zealand, and Europe. Its dividend yield of 2.7% is higher than the consumer cyclical industry average of 1%.

First-quarter 2024 earnings missed estimates at $5.8 billion, but adjusted earnings of $2.22 per share, up 3.74% year over year, beat estimates despite a $83 million restructuring expense to streamline global operations. As a result, this project should save $40 million in 2024 and $45–$90 million annually on average.

GPC maintained its 3%-5% sales growth forecast for 2024 and boosted its diluted earnings-per-share expectation to $9.80–$9.95 from $9.70–$9.90, citing good circumstances, notably in the automobile aftermarket, where an aging fleet of cars drives the need for replacement components.

The company’s acquisition of Alliance Automotive Group and Kaman Distribution Group acquisitions also helped increase market share. GPC just bought MPEC as well, which runs most U.S. NAPA Auto Parts locations, to strengthen its car parts services.

Realty Income (O)

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Realty Income (NYSE:O) is known as “The Monthly Dividend Company” because it focuses on giving investors a steady monthly income, and even though its stock price has dropped 9% this year, it’s still a great pick among dividend stocks thanks to 32 consecutive years of dividend increases and a potential upside of 10%.

In purchasing O, the commercial property-focused real estate investment trust, investors will gain access to its recently raised monthly payout of 25 cents per share, translating into a yield of 5.91% return, far above the industry average of 4.46%.

Realty Income is also busy buying homes, recently investing $598 million in three different types of homes, each with a starting weighted average cash yield of 7.8%; in total it has over 15,450 properties worldwide.

Finally, when you look at O, you should remember that it has a triple net lease arrangement under which the renter pays most of the property’s costs, freeing up Realty Income from paying the day-to-day expenses.

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-dynamos-3-stocks-delivering-consistent-payouts-in-turbulent-times/.

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