Dividend Stocks

3 Dividend Stocks That Look Even Better After Q1 Earnings

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Dividend payments offer many benefits to investors. In fact, 75% of the returns in the S&P 500 between 1980 and 2019 came from dividends, according to market data. Dividend payments are currently at an all-time high. The Janus Henderson Global Dividend Index just released data showing that dividend payments from publicly traded U.S. companies hit a record $164.3 billion in this year’s first quarter, up 7% from a year earlier.

Blue-chip companies such as Apple (NASDAQ:AAPL), JPMorgan Chase (NYSE:JPM), and Costco Wholesale (NASDAQ:COST) each raised their dividend payments this year. At the same time, other company’s such as Meta Platforms (NASDAQ:META) announced their first-ever dividend payouts. Janus Henderson said that it expects global dividend payments to rise 5% by year’s end and reach a record of $1.72 trillion for all of 2024.

Clearly companies are recognizing the importance of returning a portion of their profits to shareholders in the form of dividend payments. Here are three dividend stocks to buy that look even better after Q1 earnings.

3M (MMM)

3M logo on top of a corporate building. MMM stock

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3M (NYSE:MMM), the company behind Post-it notes, saw its stock rise 7% after it reported better-than-expected first-quarter financial results. For Q1, 3M announced EPS of $2.39 and revenues of $7.7 billion. Analysts had been looking for a profit of $2.10 a share and revenue of $7.6 billion. The latest results included numbers for the recently spun off healthcare business, Solventum (NYSE:SOLV), which became its own publicly traded company on April 1 of this year.

In addition to the Solventum spinoff, 3M finalized two major legal settlements, agreeing to pay $10.3 billion to address chemical spills in drinking water and $6 billion to resolve lawsuits related to its military earplugs. The company also replaced longtime CEO Mike Roman on May 1 with Bill Brown as the new head of 3M. This brings us to the dividend. 3M recently cut it by 54%. However, that was less than feared and it still leaves the company with a quarterly payout that yields nearly 3%, which is better than most stocks.

Over the past 12 months, MMM stock has risen 23%.

Macy’s (M)

Macy's (M) logo on storefront in city with white sky behind

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Macy’s (NYSE:M) recently reported a Q1 profit that topped Wall Street forecasts as the retailer’s turnaround strategy gathers momentum. The department store chain reported EPS of 27 cents versus 15 cents that was expected among analysts. Revenue totaled $4.85 billion, narrowly missing the $4.86 billion that was the consensus forecast on Wall Street. The company is undertaking an aggressive turnaround strategy as it tries to grow sales.

Earlier this year, Macy’s announced plans to close 150 of its outlets, more than 25% of its namesake locations. However, the company plans to open more Bloomingdale’s and Bluemercury stores, as well as smaller Macy’s stores located in suburban strip malls. In its earnings release, Macy’s said that it “views 2024 as a transition and investment year.”

As for its dividend, Macy’s pays a quarterly distribution to stockholders of 17 cents per share, giving M stock a strong yield of 3.38%. Macy’s share price has increased 46% in the last 12 months.

Coca-Cola (KO)

Coca-Cola ko stock

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As is almost always the case, beverage giant Coca-Cola (NYSE:KO) reported Q1 financial results that beat Wall Street forecasts on the top and bottom lines. The company said it continues to benefit from price increases in the current inflationary environment. Coke announced EPS of 72 cents versus 70 cents that was expected on Wall Street. Revenue amounted to $11.30 billion compared to forecasts of $11.01 billion. Sales were up 11% from a year ago.

Earlier this year, Coca-Cola raised its quarterly dividend payment to shareholders by 5.4%. The company now pays stockholders a quarterly dividend of 48.5 cents per share, up from 46 cents previously. The dividend yield on KO stock is at 3.15% based on the current share price. Another reason for Coke to be one of the dividend stocks to buy is this marks 62 consecutive years that Coke has increased its dividend payment. Among a select group of companies known as “dividend kings,” Coke has boosted their payouts for 50 years or more.

KO stock has gained 3% over the last 12 months.

On the date of publication, Joel Baglole 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.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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