The stock market has resumed its climb, with the major indexes reaching new all-time highs. The Dow Jones Industrial Average recently topped 40,000, putting a definitive exclamation point on the bullish run.
However, there are still reasons for caution. Inflation readings continue to run fairly hot. This has caused some Federal Reserve members to dial back prior expectations for imminent interest rate cuts. Geopolitical tensions are mounting overseas, which could lead to another jump in gas prices. The upcoming presidential election adds another question mark to the mix.
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This makes it a great time for investors to think about adding some dividend stocks to their portfolios. While capital gains can come and go, a solid dividend stream makes it easier to ride out market volatility. Though market valuations are currently stretched in quite a few sectors, there are still some great bargains out there, including these 15 dividend stocks to buy today:
| Stock | Dividend yield |
| Verizon Communications Inc. (ticker: VZ) | 6.7% |
| Stellantis NV (STLA) | 7.5% |
| Kenvue Inc. (KVUE) | 4.0% |
| OneMain Holdings Inc. (OMF) | 8.6% |
| Gilead Sciences Inc. (GILD) | 4.6% |
| Realty Income Corp. (O) | 5.7% |
| National Storage Affiliates Trust (NSA) | 6.1% |
| Prologis Inc. (PLD) | 3.5% |
| British American Tobacco PLC (BTI) | 9.5% |
| United Micro Electronics (UMC) | 6.7% |
| Ecopetrol SA (EC) | 13.6% |
| Molson Coors Beverage Co. (TAP) | 3.2% |
| Pfizer Inc. (PFE) | 5.7% |
| Banco de Chile (BCH) | 6.7% |
| APA Corp. (APA) | 3.3% |
Verizon Communications Inc. (VZ)
Investors have long prized the telecom sector for its stability and high dividends. That reputation came into question over the past few years as profits slipped and some companies reduced their dividends. However, Verizon held the line and is now turning into a solid comeback story.
Verizon spent heavily to deploy its market-leading 5G network. With that network now in place, Verizon is reaping the rewards as its subscriber numbers are picking up and customer satisfaction improves. In addition, analysts are becoming more upbeat as competition from the cable sector ended up being less disruptive than previously feared. Verizon stock has bounced back this year, but even so, shares still trade for less than nine times forward earnings.
Stellantis NV (STLA)
Stellantis is a large multinational car manufacturing company that offers brands such as Chrysler, Dodge, Jeep, Maserati, Ram and Peugeot. Stellantis is a massive company, generating about $200 billion in annualized revenues. This has given Stellantis sticking power to ride out recent changes in the automotive industry, such as the rise of electric vehicles. While investors initially feared that disruptors such as Tesla Inc. (TSLA) and Rivian Automotive Inc. (RIVN) could outfox the legacy automakers, over the past year the traditional powerhouses have started to regain the initiative.
At its core, Stellantis is highly attractive due to its massive profitability, with shares going for less than four times earnings. To be sure, there is risk as the auto market is highly cyclical and profits could be crushed in a recession. At this price though, investors are getting a highly favorable risk/reward ratio, and the 7.5% dividend yield is compelling as well.
Kenvue Inc. (KVUE)
Kenvue is a new publicly traded health care company. It came about when Johnson & Johnson (JNJ) spun off its consumer wellness division as a separate firm last year. Kenvue has gotten off to an underwhelming start, with the stock dropping from its initial $26 price to around $20 today. Kenvue offers well-known products such as Tylenol, Motrin, Benadryl and Nicorette. These tend to have steady sales but don’t offer strong growth prospects. Given the booming stock market, Kenvue’s collection of steady but slow-moving brands has failed to inspire much investor excitement so far. But Kenvue’s exceptionally reliable cash flows could come into greater demand during an economic downturn. A decline in interest rates would also make Kenvue’s 4% dividend yield look more appealing compared to fixed-income alternatives.
While Kenvue is off to a slow start, it will have its time to shine in coming months.
OneMain Holdings Inc. (OMF)
OneMain is a specialty consumer finance company that makes personal loans to consumers. These are either unsecured or backed by collateral such as automobiles. While people may label companies like OneMain as subprime lenders, the company’s risk pool gravitates more toward people with at least reasonably decent credit ratings.
Historically, OneMain was part of Citigroup Inc. (C) before becoming a publicly traded company in 2013. This gave OneMain access to huge amounts of historical credit data and its experience navigating downturns such as 2008 give it experience that newer lending rivals lack. Investors are understandably concerned about credit performance, given that the economy may slow down at some point following its recent strong performance. However, OneMain earns a 15% net interest margin on its loan book, which is a simply massive figure and gives it plenty of margin of safety for some increased loan write-offs when a recession does hit. Simply put, at about nine times earnings and an 8.6% dividend yield, investors are taking a far too pessimistic view toward this proven lending business.
Gilead Sciences Inc. (GILD)
With a market capitalization of more than $80 billion, Gilead is one of the largest companies in the biotech space. The company enjoyed initial success with its lineup of HIV treatments. In the mid-2010s, Gilead shares skyrocketed thanks to the launch of a therapy that cures the hepatitis C virus (HCV). However, due to it being a cure rather than an ongoing treatment, revenue from the HCV portfolio dropped off quickly after the initial blockbuster sales.
Gilead shares went into a tailspin and have yet to snap out of it. After years of revenue declines, though, Gilead has returned to growth. Analysts are forecasting $27.6 billion in revenue this year, which will be Gilead’s highest figure since 2016. Earnings are expected to surge in fiscal year 2025, with the stock trading at less than 10 times that year’s projected earnings. Gilead is regaining momentum, and dividend investors can cash in with this biotech’s 4.6% dividend yield.
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Realty Income Corp. (O)
Realty Income is a triple-net real estate investment trust, or REIT. The phrase “triple net” refers to a type of real estate contract where the tenant, rather than the landlord, is responsible for several major costs including maintenance and taxes. This gives Realty Income greater flexibility than most landlords during periods of higher inflation, such as the past few years.
In addition, Realty Income has shown incredible discipline in its capital allocation decisions. It shrewdly spun off its office properties several years ago before the bottom fell out of that market. Meanwhile, Realty Income has diversified into other categories such as entertainment-related properties that are performing much better in the current economic environment. Realty Income markets itself as “The Monthly Dividend Company.” Not only does it pay that monthly dividend, it has increased the dividend for 26 years in a row, making it one of the rare Dividend Aristocrat REITs.
National Storage Affiliates Trust (NSA)
National Storage Affiliates is a fast-growing REIT focused on the self-storage market. The company has come about through a series of mergers and acquisitions and has enjoyed tremendous growth. Since 2018, it has grown annual revenue from $329 million to $866 million in 2023. The company has grown its dividend significantly as well as its cash flows have grown.
NSA stock plunged in 2022 as inflation took off and the Federal Reserve dramatically increased interest rates. REITs tend to struggle during periods of higher interest rates, as they have to pay more interest to service their debts. Furthermore, a REIT’s dividend yield looks less attractive in comparison to fixed income as rates on bonds rise. That said, interest rates won’t keep going up forever, and the Fed is now talking about rate cuts. Self-storage is also a stable sector within the real estate universe, making it a great choice for a potentially slowing economy over the next year.
Prologis Inc. (PLD)
REITs offer plenty of compelling dividend stock opportunities, with industrial leader Prologis being another great option for 2024. It has become one of the world’s largest REITs thanks to its rapid growth in North American industrial properties. The rise of e-commerce, industrial warehouses and logistics has sparked a full-on building boom for these sorts of properties. Prologis’ huge size and strong balance sheet give it significant competitive advantages in finding and financing these growth opportunities.
In addition, Prologis operates a strategic capital business, which manages tens of billions of dollars in assets under management, making for a more diversified business model than most REITs. Prologis shares plummeted in April following a weaker-than-expected earnings report. Investors can take advantage of that decline, as the long-term trend toward e-commerce and logistics isn’t going anywhere. Meanwhile, once interest rate cuts start, Prologis’ outlook should improve considerably.
British American Tobacco PLC (BTI)
British American Tobacco is one of the world’s largest tobacco companies. For most people, tobacco is synonymous with cigarettes. For completely understandable reasons, many investors are uncomfortable with the idea of investing in this industry. However, British American Tobacco has evolved in recent years. The company is letting its cigarette business slowly shrink while promoting newer nicotine delivery platforms including vaping and “heated not burned” options.
BTI stock plunged in late 2023 when the company announced that it was taking a massive write-down on its cigarette brands. While the headline number might seem scary, it shouldn’t be too surprising as the cigarette business continues to fade away. The future is in the company’s nicotine alternatives, and these are growing at a prodigious clip. British American Tobacco is set for roughly flat top- and bottom-line results this year, which is quite acceptable when the stock starts out at seven times forward earnings and offers a 9.5% dividend yield.
United Micro Electronics (UMC)
United Micro Electronics is a Taiwan-based semiconductor foundry. In most quarters, it typically ranks as the No. 4 player in the market, trailing Taiwan Semiconductor Manufacturing Co. Ltd. (TSM), Samsung Electronics Co. Ltd. (KRW.005930) and GlobalFoundries Inc. (GFS). In this market, there’s plenty of business to go around. Cutting-edge technologies such as artificial intelligence and augmented and virtual reality are gaining steam, and these applications demand huge chunks of computing power.
Other fields such as smart cars and internet-connected devices should fuel additional growth throughout the decade. UMC stock has been under pressure due to weakness in some parts of the chips industry, such as automotive, along with political concerns around Taiwan. These factors have pushed UMC stock down to 15 times forward earnings while offering a 6.7% dividend yield.
Ecopetrol SA (EC)
Ecopetrol is Colombia’s state-run oil company. The Colombian government holds 88% ownership of the firm, with the other 12% held by private investors. This alignment has served investors well; the government, as the majority shareholder, has an incentive for Ecopetrol to pay as high of a dividend as possible to fund the government’s fiscal needs. And Ecopetrol has a great collection of assets; not only is it Colombia’s dominant oil producer, it also controls 100% of the nation’s refining capacity and a collection of toll roads and power distribution assets. The company has also deployed renewable energy both for generating electricity and powering assets such as its own refineries.
Ecopetrol was trading around three times earnings and paid a jaw-dropping 26% dividend yield in 2023. As the price of oil has slipped a bit, Ecopetrol is projecting a slide in earnings this year. Regardless, the company is still selling for less than six times this year’s projected earnings. The company also proposed an annual dividend of $1.62 per share for this year, which amounts to a 13.6% dividend yield as of this writing.
Molson Coors Beverage Co. (TAP)
Molson Coors is one North America’s largest brewing companies. It owns Molson and Coors along with Carling, Blue Moon and various other well-known brands. It’s no secret that macro brewers have come under pressure in recent years as consumers have cut back beer consumption due to both pandemic-related disruptions and changing health trends. However, Molson Coors’ collection of more upscale brands like Blue Moon somewhat insulates it from the broader negative environment. Molson Coors also enjoyed a significant upturn in demand over the past year as consumers boycotted rival products from Anheuser-Busch InBev SA/NV (BUD). TAP stock fell sharply in May following a weak earnings report. This pushed shares down to less than 10 times forward earnings, and makes this a bargain dividend stock today.
Pfizer Inc. (PFE)
It’s been a tale of two markets within the pharmaceutical stock space. Pharmaceutical companies with exposure to GLP-1 drugs for managing diabetes and weight loss have seen their share prices skyrocket. Much of the rest of this sector has been left totally behind.
Pfizer is the quintessential example of this. Despite producing a blockbuster COVID-19 vaccine that produced tens of billions of dollars in revenues, Pfizer stock has tanked. Shares now trade for around 30% less than they did prior to the onset of the pandemic. While the vaccine revenues have largely gone away, Pfizer still has far higher revenues now than it did back in 2019. With the collapse in the share price, however, Pfizer now trades for less than 13 times forward earnings while offering a 5.7% dividend yield.
Banco de Chile (BCH)
Banco de Chile is one of Chile’s large publicly traded banks. It operates the usual retail banking businesses that would be associated with an emerging market bank, and it also has investment banking and brokerage operations. The case for Banco de Chile is based around commodities and inflation. Given the persistent jump in inflation and resource prices since the pandemic and Russia’s invasion of Ukraine, commodity exporters like Chile are set to cash in.
Specifically, Chile is a leading producer of gold, copper and silver. The prices of all of these have jumped dramatically as of late as investors prepare for sustained inflation and a potential weakening in the U.S. dollar. Chile’s massive lithium industry offers upside exposure to electric vehicles and the renewable energy movement. As if that weren’t enough, Chile’s central bank is cutting interest rates, which should provide a jump for the consumer economy and offer support to Banco de Chile’s operations. BCH shares go for less than nine times forward earnings and yield 6.7%.
APA Corp. (APA)
APA Corp., formerly known as Apache, is an oil and gas operator with operations in the U.S., Egypt, the North Sea and offshore Suriname. APA has long relied on U.S. production as a key portion of its results, and its domestic assets have produced underwhelming results over the past decade. However, change is in the air. In May, the company announced that it is selling two non-core assets in the Midland Basin and Eagle Ford plays in Texas.
APA will receive at least $700 million for these assets. It also allows the company to refocus its attention more prominently on its project in offshore Suriname. Exxon Mobil Corp. (XOM) has enjoyed tremendous success in neighboring Guyana recently and analysts have high hopes for Suriname as well. APA stock is now trading for just seven times forward earnings and shares are near 52-week lows, marking a great entry point for this energy firm.
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15 Best Dividend Stocks to Buy for 2024 originally appeared on usnews.com
Update 05/23/24: This story was previously published at an earlier date and has been updated with new information.
