As passive income investors, we are always searching for stocks that can generate steady quarterly income for us. The earnings season is an excellent time to rebalance your portfolio and load up on the stocks that can generate promising returns in terms of steady dividends and capital growth. With the ongoing earnings season, investors are eagerly waiting for dividend announcements and I’ve identified three dividend stocks to buy before earnings.

These companies have been rewarding shareholders for several years now and they believe in sharing their profits with them. Since they are due to report results soon, make the move before it is too late. Let’s dive into the three dividend stocks to buy before the earnings announcement.

Home Depot (HD)

A home improvement retailer, Home Depot (NYSE:HD) caters to a massive addressable market across the U.S. and has a network of stores across the county in addition to Mexico and Canada. The company sells tools and products to both professional and DIY customers. If the government announces a rate cut, Home Depot will be in a strong position to benefit. Any improvement in residential spending helps Home Depot and this shows its growth potential. 

The company faced tough times last year and saw a dip in revenue due to the changing macroeconomic environment. People were not ready to make big-ticket purchases, and this led to a drop in sales. However, I think Home Depot will be able to get back to reporting growth as the economy sees an improvement in consumer spending.

It did beat expectations in the past 12 months. If you look at the bigger picture, the demand for its products will never fade because stuff will go wrong at some point in time and this is when we will have to head to Home Depot. 

In the first quarter, the company reported sales of $36.4 billion and net earnings of $3.63 per share. While it saw a drop in comparable sales, it managed to add 12 new stores during the period. This quarter could see soft earnings due to low consumer spending but the dividends will remain intact.

A dividend stock, HD has a yield of 2.44% and a payout ratio of 57.1%. Trading at $345, the stock has remained flat over the past 4 months. It hit $395 in March but has dropped since then. 

Nvidia (NVDA)

Not many investors are aware that Nvidia (NASDAQ:NVDA) is a dividend stock. While it has a modest dividend yield of 0.037%, it could become a rewarding investment. The recent tech sell-off has led to a drop in the stock which makes it a good chance to pounce. Whether you believe in artificial intelligence or not, the future is AI and companies are pouring billions into the industry. 

Already a leader, Nvidia is the biggest beneficiary of the AI boom and the market is expecting it to beat expectations yet again. Nvidia has reported impressive numbers in the past and the upcoming results could be the same. 

Wedbush analyst Dan Ives believes that the results will not only be exciting but will also be a ‘drop the mic moment’ for the company. It is set to report on Aug. 28. If the company exceeds expectations, the stock will immediately recover from the current dip. It beat EPS expectations in the past four quarters and is on a solid rally.

The management is aiming for a revenue of $28 billion and the company will also disclose how its clients make profits using the AI chips. This could be a game-changer for Nvidia and investors holding on to the stock could see a rally. While dividends are not the only reason to buy stock, they can generate significant returns in the long term.

Walmart (WMT)

Set to report results on Aug. 15, Walmart (NYSE:WMT) is the world’s largest retailer and is a dividend stock with a yield of 1.21%. The company has a solid presence across the U.S. and has built a strong online presence.

It had an incredible start to the year and the stock is up 29% YTD. Exchanging hands for $68, it is nearing the 52-week high of $71. A strong quarterly report could push the stock higher. It has already performed better than the S&P 500 and could hit a new high very soon. WMT is one of the top dividend stocks to buy before earnings.

It has a booming e-commerce and advertising business which drives growth. Walmart has seen growth in the domestic as well as international market and its investments in the e-commerce segment are already paying off. The company saw a 21% jump in online sales in the first quarter to $161 billion and a 24% jump in ad sales in the quarter. 

Walmart has enough liquidity to keep rewarding investors and it is one of the best e-commerce stocks to own. The company has been around for many years and has seen the ups and downs of the market. It is not only growing revenue but has also seen an improvement in profit.

Walmart has a competitive pricing strategy that continues to attract consumers, and its fulfillment centers spread across the country make it easier for consumers to step into a Walmart. The total revenue for the first quarter jumped 6% to $161 billion and analysts are forecasting a revenue of $168.43 billion for the second quarter.

On the date of publication, Vandita Jadeja did not hold (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.

On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.