Income and Upside: 7 Dividend Stocks to Buy Now
One of the best ways to generate reliable income is by investing in dividend aristocrats because they’re among the most reliable dividend payers.
Not only have these stocks paid out dividends for more than 25 years, they’re also some of the most reliable companies on the planet even in the worst of times.
In fact, we’ll take a quick look at seven of the most reliable dividend payers below. At the moment, there are 67 dividend aristocrats, each of which is listed on the S&P 500, meaning their market cap must be at or greater than $14.5 billion.
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In short, you have reliable dividend payers industry giants that’ll pay you to hold their stock.
In fact, here are seven reliable dividend payers all investors may want to consider today.
McDonald’s (MCD)
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With a 46-year history of paying dividends, McDonald’s (NYSE:MCD) currently yields 2.16%. it also just declared a quarterly dividend of $1.52 a share, which is payable Sept. 18 to shareholders of record as of Sept. 1.
Given the strength of the McDonald’s brand, demand, and global real estate, we’ll see even more. Helping, earnings show no clear signs of slowing. In its most recent quarter, it posted EPS of $3.17, which beat expectations by 38 cents.
Revenue came in at $6.5 billion, which was up 13.6% year over year, and beat estimates by $210 million. Global comparable sales were also up 11.7, with U.S. sales up 10.3%. Growth is not a problem here.
In late July, analysts at Guggenheim raised their price target on MCD to $330 from $325. RBC Capital also raised its target to $340 from $325.
Automatic Data Processing (ADP)
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Automatic Data Processing (NASDAQ:ADP) one of the more reliable dividend payers, it’s also recession proof.
After all, companies still need to run payroll and use human resources services that a company, such as ADP offers even in a bad economy. For example, since June, the ADP stock ran about 70% higher, as the DJIA gained about 4%.
ADP isn’t the most exciting stock, but we want reliability in any environment, with yield.
Right now, ADP carries a safe yield of just under 2%. It also just declared a quarterly dividend of $1.25 a share, payable Oct. 1 to shareholders of record as of Sept. 8.
Even better, it just beat earnings, with EPS of $1.89, which beat expectations by six cents. Revenue of $4.5 billion beat by $110 million.
Analysts seem to the like the stock, too. In fact, since the end of July, about six firms raised their price targets on the stock. Mizuho, for example, raised from $255 to $285. JP Morgan raised its price target to $280 from $260.
Lowe’s (LOW)
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Lowe’s (NYSE:LOW) yields about 1.91%, and just declared a quarterly dividend of $1.10 a share, payable Nov. 8, to shareholders of record as of Oct. 25. The company has been buying back shares, too. In Q2, for example, it bought back 10.1 million shares for $2.2 billion.
In Q2, the company posted EPS of $4.56, which beat expectations by eight cents.
Revenue of $25 billion was in-line with estimates. DA Davidson analyst Michael Baker has a buy rating on the stock, with a $237 price target making this one of the reliable dividend payers with room to grow.
Walmart (WMT)
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Walmart (NYSE:WMT ) has been paying out dividends now for 51 years, which also makes it a dividend king.
At the moment, the company is paying an annual dividend of $2.54 a share, which is being paid out in four quarterly installments of 57 cents a share. The latest one is payable Sept. 5 to shareholders of record as of Aug. 11.
Following that, if you hold WMT shares as of Dec. 8, you’ll get the next payout on Jan. 2, 2024.
And despite economic issues, and a stretched consumer, WMT earnings have been solid. It’s second quarter EPS of $1.84 beat expectations by 13 cents.
Revenues of $161.63 billion – up about 6% year over year – beat by $2.35 billion. U.S. comparable sales jumped 6.4%, which was well above expectations for 4%. Global sales were up 13.3% to $27.6 billion.
Analysts at Citi recently raised their price target on WMT to $180 from $174 a share making it one of the more interesting among the reliable dividend payers.
Clorox Co. (CLX)
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Or look at Clorox Co. (NYSE:CLX). For about 37 years, the company has paid out a dividend, and currently yields just over 3%. It also just declared a $1.20 quarterly dividend, which was payable Aug. 25.
Fourth quarter EPS, for example, came in at $1.67, which beat expectations by 49 cents. Revenue – up 12.2% year over year to $2.02 billion – bat by $140 million.
While we aren’t seeing pandemic-like demand for cleaning products at the moment demand is still predictable. While companies like CLX have been forced to pass rising costs on to consumers, the company doesn’t get a lot of flak for that.
DA Davidson also just raised its price target on CLX to $176 from $155.
Realty Income (O)
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There’s also Realty Income (NYSE:O), a real estate investment trust. Its tenants are in long-term, triple net leases, where they cover taxes and insurance, for example. Again, boring stuff. But its dividends are impressive. For more than 638 consecutive months, it has paid out.
In fact, it just declared its 638th consecutive monthly dividend payment of $0.255 a share. Annualized, that comes out to $3.066 a share, and is payable Sept. 15 to shareholders of record as of Aug. 31. If you missed this one, no big deal. The next one is coming out shortly.
It’s also technically oversold on relative strength (RSI), MACD, and Williams’ %R. I’d like to see the stock challenge prior resistance around $62 a share shortly.
Federal Realty Investment Trust (FRT)
Source: Vitalii Vodolazskyi / Shutterstock
OFederal Realty Investment Trust (NYSE:FRT), which invests in shopping centers, yields about 4.5%. It also just raised its quarterly dividend to $1.09 a share. According to a recent press release, “This increase represents the 56th consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector.”
Not to sound like a broken record, but earnings have been solid here, too. In its second quarter, funds from operations (FFO) came in a $1.67, which beat by five cents. Revenue of $270.68 million was up 6.3% year over year, and beat by $4.36 million.
Wells Fargo analysts just raised their price target on FRT to $125 from $124 a share.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
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