Dividend Stocks

Dividend Royalty: 3 No-Brainer Income Stocks With Strong Buy Ratings

Investing in the best dividend stocks to buy is a prudent strategy for those seeking a reliable source of passive income and potential long term growth. No-brainer dividend stocks, characterized by their robust dividend payments, are appealing for stability and predictability. 

These stocks often belong to well-established companies with strong track records of financial performance. Investors often prioritize these stocks for their ability to provide steady income streams, which can be especially valuable during periods of high inflation. Additionally, many no-brainer dividend stocks offer the potential for capital appreciation, making them a dual threat for wealth accumulation.  

Now, let’s delve into the best no-brainer dividend stocks to buy in May!

UnitedHealth Group (UNH)

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UnitedHealth Group (NYSE:UNH) stands as a paragon in the healthcare sector providing investors with both growth, income and stability. As a leading provider of health insurance and healthcare services in the United States, UNH stock benefits from a diversified business model.

UnitedHealth Group is truly one of the most transformative businesses on the stock market. The company’s strong revenue and earnings growth has been steadfast, regardless of the cycle that the economy is in. Furthermore, what truly makes it standout is its monstrous free cash flow (FCF) generation. In FY23, the company delivered record FCF from operations of $25.7 billion. They also delivered record revenue and earnings in 2023. The stock suffered a major slump in the first quarter due to impairment charges from cyber attacks costing the company $1.6 billion. However, despite this setback management has maintained its net earnings guidance of between $27.50 to $28.00 per share. With a nearly 20% CAGR in its dividend over the last decade, UNH stock remains one of the best dividend stocks to buy now.

Coca-Cola (KO)

An image of an old red and rusted fridge door with a metal

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Coca-Cola (NYSE:KO), one of the world’s most iconic brands, needs no introduction. With a vast portfolio of food and beverages, the company enjoys a dominant market position and loyal customer base across the globe. 

Coca-Cola is undoubtedly one of the best dividend stocks to buy in May. The company is a Dividend Aristocrat, with a dividend growth history spanning 63 years. This has made it an ideal company for investors looking for both income and stability in the good and bad times. Their stable cash flows, global distribution network and ability to adapt to changing consumer preferences make it a resilient player in the beverage industry. Additionally, the company is known for being one of Berkshire Hathaway’s (NYSE:BRK-A, BRK-B) largest holdings, owning approximately 400 million shares or 7.38%. In FY23, revenue increased 6% year-over-year (YOY) to $45.75 billion. Earnings per share (EPS) grew 13% from the year prior, driven by strong execution and exceptional growth in emerging markets. Management is forecasting double-digit EPS growth in FY24, making KO stock an ideal company for income-seeking investors.

Automatic Data Processing (ADP)

In this photo illustration the stock market information of Automatic Data Processing, Inc. displays on a smartphone with the logo of Automatic Data Processing, Inc. ADP stock.

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Automatic Data Processing (NASDAQ:ADP), a leading provider of human capital management (HCM) solutions, operates in a sector that is essential for businesses of all sizes. ADP’s impressive dividend track record coupled with their strong revenue and earnings growth make them a force to be reckoned with. 

Automatic Data Processing truly does not get enough love on Wall Street. Their recurring revenue model, driven by long-term contracts and a sticky customer base, provides stability and predictability to its cash flows. In the 2023 fiscal year, ADP’s revenue increased 9% YOY to $18 billion. Net earnings increased 16% YOY to a record $3.4 billion, or $8.21 per share. Free cash flow also swelled to a record $3.63 billion. They have started out the 2024 year strong, after delivering strong results in the first quarter. Revenue increased 7% YOY, with EPS up 15% to $2.88 per share. Moreover, adjusted EBITDA margin expanded by 140 basis points to 29.3%. With a healthy dividend yield of 2.2%, ADP stock remains one of the top dividend stocks to buy on any dips in 2024.

On the date of publication, Terel Miles 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.

Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.

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