7 Stable Dividend Stocks to Ease Lingering Market Jitters
Easily one of the top talking points of last year is that with the economy avoiding a recession, mitigation protocols – such as targeting stable dividend stocks – seem rather unnecessary. Nevertheless, it doesn’t hurt to hope for the best but to be prepared for the worst.
For starters, there’s really no market cycle that warrant extreme pessimism for stable dividend stocks. No, these industry stalwarts probably won’t make you rich – they’re just too boring and predictable for that endeavor. However, this very profile makes such ideas so effective against any market jitters or ambiguities. Over time, you have the confidence that these blue chips will make their way back top.
Second, it’s not guaranteed that the economy will continue producing gangbuster metrics. At some point, the market has to ebb and flow, which means it’s never a bad idea to be diversified. On that note, the below stable dividend stocks should help ease any lingering concerns.
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
McDonald’s (MCD)
Source: Vytautas Kielaitis / Shutterstock
Representing the biggest fast-food enterprise in the world, McDonald’s (NYSE:MCD) also doubles as a symbol of American capitalism. However, the Golden Arches failed to feel the love when it released its latest earnings report. As Barron’s pointed out, the fast-food giant’s latest financial disclosure took a little shine off MCD stock. Nevertheless, the op-ed argues that the red ink created an opportunity for discount-seeking investors.
I couldn’t agree more. Fundamentally, I appreciate the company experimenting with a new business model with the CosMc’s chain. As I wrote for TipRanks, CosMc’s focuses on the drive-thru model that emphasizes convenience. More importantly, the initiative targets Generation Z, specifically this age cohort’s penchant for personalization.
Given that this is the emerging generation, MCD represents a winner among stable dividend stocks.
As for the passive income, it’s not a blistering forward yield at 2.31%. However, the main point here is that McDonald’s commands 48 years of consecutive dividend increases. Therefore, it’s so close to becoming a dividend king.
Procter & Gamble (PG)
Source: rblfmr/ShutterStock.com
A multinational consumer goods company, Procter & Gamble (NYSE:PG) specializes in a wide range of personal health, hygiene, and care products. To be sure, P&G doesn’t particularly resonate as a powerfully compelling enterprise – unless we have another toilet-paper-draining pandemic again. However, the main driver for the enterprise as a candidate for stable dividend stocks is the underlying everyday necessity.
Just because a recession suddenly materializes doesn’t mean that we’ll stop using personal care products. Additionally, P&G carries the clear advantage of selling primarily low-cost products. If family budgets are going to be slashed, the focus will turn to the discretionary items: vacation plans, beverages from pricey coffee shops and streaming subscriptions that have gone dormant (except to ping your account every month).
Regarding passive income, P&G isn’t astonishingly generous with a forward yield of 2.39%. That said, this dividend isn’t going anywhere, with the company printing 68 years of payout increases. Given the tremendous trust factor, PG easily qualifies for stable dividend stocks.
Target (TGT)
Source: Sundry Photography / Shutterstock.com
One of the most popular big-box retailers in the country, Target (NYSE:TGT) incurred some rough moments. As I mentioned in May of last year, Target sounded a warning regarding the impact of retail crime. Back then, the company Chair and CEO Brian Cornell disclosed that the business could see profitability shrink by more than $500 million compared to the prior year.
Not surprisingly, investors quickly rushed to the exits. And that panic later subsided into a gradual erosion of market value. However, after Target posted stronger-than-expected third-quarter results, TGT stock came alive. With more people having more jobs – thanks to a blistering labor market – Target’s business should steadily recover.
Further, while crime imposes a dark cloud over retail, it’s also possible that political leaders will get the hint. They can either crack down on crime or suffer tax revenue losses as companies pull out. With circumstances finally improving, investors should be able to trust Target’s forward yield of 3%.
And let’s not forget its 53 years of payout increases. Therefore, it’s one of the stable dividend stocks to buy.
Johnson & Johnson (JNJ)
Source: Alexander Tolstykh / Shutterstock.com
A multinational pharmaceutical and medical technologies company, Johnson & Johnson (NYSE:JNJ) has long played a significant role among stable dividend stocks. Last year, J&J spun off its consumer health products unit, which became Kenvue (NYSE:KVUE). Personally, I can go with either one. However, with the former enterprise focused on groundbreaking medical innovations, it offers much value for investors.
First, the global pharmaceutical manufacturing market reached a valuation of $516.48 billion in 2022, per Grand View Research. Experts project that the sector could expand at a compound annual growth rate (CAGR) of 7.63% to 2030. At the end of the forecast period, the industry could print revenue of $929.9 billion.
As for the medical technologies space, Statista notes that the arena could expand at a CAGR of 5.23% from 2024 to 2028. At the culmination point, the market volume could rise to $748.2 billion.
Regarding the dividend, J&J offers a forward yield of 3.04%. Notably, the payout ratio sits at only 43.28%. Best of all, the company commands 62 years of payout increases.
Coca-Cola (KO)
Source: monticello / Shutterstock
A soft-drink manufacturing icon and another symbol of American capitalism, Coca-Cola (NYSE:KO) intrigues as one of the stable dividend stocks. It’s a bit risky to say that ahead of its fiscal Q1 2024 earnings report. However, if history is any guide, stakeholders shouldn’t fret that much. Since at least Q1 2022, the company has been on a roll, beating its earnings targets.
Admittedly, where Coca-Cola sometimes gets a bit shaky is in the revenue department. For example, in fiscal Q2 2022, its sales reached $5.72 billion, shy of the $5.8 billion consensus. Also, the soft-drink manufacturer fell short in Q4 2023. Still, the overall picture represents one of reliability. Consumers still love the underlying products: they’re cheap, accessible and provide a pick-me-up.
Investors can also receive a sugar high from the passive income. Presently, the Coca-Cola offers a forward yield of 3.09%. Even better, it commands a history of 62 years of consecutive payout increases. Therefore, KO easily ranks among the stable dividend stocks to buy.
Sempra Energy (SRE)
Source: Michael Vi / Shutterstock.com
While utility giant Sempra Energy (NYSE:SRE) may not have as illustrious a history as many of the stable dividend stocks on this list, SRE still deserves careful consideration. Providing power resources to large swathes of the lucrative Southern California market, Sempra isn’t going anywhere. No matter how many political criticisms fly at the Golden State, they don’t land.
You want to know why? For one thing, California is a coastal state, reaching out to the vast expanses of the Pacific. Second, it borders Mexico, which again despite the political criticisms represents a key economic partner to the U.S. Third, the temperate climate – for the most part – makes it an attractive destination spot for Americans and immigrants abroad.
To me, it’s no surprise that Sempra offers a forward yield of 3.42% along with a track record of 20 years of consecutive payouts. As well, the payout ratio sits at 46.21%, a reasonable metric. Finally, SRE brings capital gains potential to the table with a strong buy rating forecast shares to $81.39.
Exxon Mobil (XOM)
Source: Jonathan Weiss / Shutterstock.com
As a hydrocarbon energy giant – and a controversial one historically – Exxon Mobil (NYSE:XOM) might not seem compelling as one of the stable dividend stocks. After all, the political and ideological forces that govern the world seem to speak with one accord: electric vehicles are the future, deal with it. Okay, I added the last part but that snideness seems to capture the mood.
Well, folks in Chicago might beg to differ. With extreme winter conditions leaving many EV owners stranded, the idea that the future is here might not resonate well. Plus, the world continues to run on oil and may do so for some time. Yes, EVs are gaining significant ground but they’re still expensive compared to their combustion-powered counterparts.
Frankly, the likelihood we’ll see of at least some EV drivers returning back to combustion won’t help matters regarding electrification. But this dynamic should be a boon for XOM stock and its ilk.
Turning to passive income, Exxon prints a forward yield of 3.73%. It also sports a low payout ratio of 39.61%. And if doubts exist about the company’s viability, a 41-year history of consecutive payout increases should put them to rest.
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
More From InvestorPlace
The #1 AI Investment Might Be This Company You’ve Never Heard Of
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The post 7 Stable Dividend Stocks to Ease Lingering Market Jitters appeared first on InvestorPlace.
