Dividend Stocks

The 3 Best Dividend Stocks to Secure Steady Income This Year

Ensuring a steady stream of income remains a core goal for many investors. While market fluctuations can cause anxiety, focusing on some of the best dividend stocks for income may offer a dependable solution. These companies regularly distribute a portion of their profits to shareholders, providing a predictable cash flow.

The Vanguard High Dividend Yield ETF (NYSEARCA:VYM) tracks the performance of companies that typically pay higher-than-average dividends. VYM’s year-to-date (YTD) return of 6.5% showcases the demand for high-yielding exchange-traded funds (ETFs). VYM also offers a dividend yield of over 3.0%.

This article discusses three of the best dividend stocks for income. By incorporating these companies into your portfolio, you can create a dependable income stream that fuels your financial goals.

AT&T (T)

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Telecommunications and media giant AT&T (NYSE:T) is today’s first pick among the best dividend stocks for income. Despite losing its Dividend Aristocrat status in 2021, AT&T had previously increased its dividend for 36 consecutive years. Nonetheless, AT&T’s dividend remains highly attractive and sustainable. The company’s mostly recession-proof business model offers stability and predictability to its earnings.

AT&T’s first quarter of 2024 earnings showcased a mixed performance. Revenues declined slightly year-over-year (YOY) to $30 billion. However, subscriber growth was strong, with 349,000 new postpaid phones and 252,000 fiber internet subscribers added. Adjusted EPS fell 8.3% YOY to $0.55 due to reduced DIRECTV equity income.

On the other hand, AT&T’s free cash flow grew by over $2 billion YOY to $3.1 billion, ensuring the dividend is well-covered. Meanwhile, in May, AT&T and AST SpaceMobile (NASDAQ:ASTS) entered a commercial agreement to create the first space-based broadband network accessible by everyday cell phones, enhancing mobile coverage across the U.S.

T stock has appreciated more than 11% YTD, complemented by a robust dividend yield of nearly 5.9%. Shares are trading at 8.4 times forward earnings and 1.1 times sales, suggesting a favorable valuation. Wall Street remains optimistic, setting a 12-month median price forecast for T stock at $20, signaling a 7% upside potential.

Energy Transfer (ET)

A magnifying glass zooms in on the website for Energy Transfer (ET).

Source: Casimiro PT / Shutterstock.com

Next on our list of the best dividend stocks for income is the energy company Energy Transfer (NYSE:ET). The company’s operations include natural gas gathering, natural gas liquid pipelines, processing plants,and crude oil transportation, offering diversified revenue streams. Energy Transfer is renowned for its consistent dividend payments, making it a dependable choice for income-focused investors.

In the first quarter of 2024, Energy Transfer reported impressive financial performance. Revenue jumped 14% YOY to $21.6 billion, and net income grew 11.5% to $1.24 billion. Distributable cash flow came in at $2.36 billion, supporting a net income per common unit of $0.32.

From a diverse asset portfolio and recent growth initiatives, Energy Transfer could be poised for significant expansion amid strong oil and gas demand. The company’s acquisition of WTG Midstream for $3.25 billion in late May bolstered its presence in the Permian Basin’s gas gathering and processing sector.

So far in 2024, ET stock has gained around 16%, with a forward price-to-earnings (P/E) ratio of 10.6x and a price-to-book (P/B) ratio of 1.5x. Meanwhile, it offers an attractive dividend yield of 7.9%. Analysts have a 12-month median price forecast of $19 for ET stock, indicating a 19% potential upside from the current levels.

Simon Property Group (SPG)

Screenshot through a magnifying glass of the official website of the company S&P Global (SPGI)

Source: AntonSAN / Shutterstock.com

We round up today’s list of the best dividend stocks for income with Simon Property Group (NYSE:SPG). Simon Property Group is a leading real estate investment trust (REIT) specializing in premier shopping malls and retail properties. Despite retail sector challenges, SPG has shown resilience by repurposing and revitalizing its properties, adapting well to the evolving retail landscape. This adaptability underpins the company’s ability to continue delivering dividends to its shareholders.

Simon Property Group reported robust results for the first quarter of 2024. The funds from operations (FFO) jumped 30% YOY to $1.334 billion or $3.56 per diluted share. This growth was driven by higher rental income and gains from investment activities. The real estate business saw a 3.2% YOY increase in FFO, and domestic property net operating income rose by 3.7%.

Simon Property Group announced a transformative mixed-use development at Fashion Valley, San Diego’s premier shopping destination. The new development will integrate 850 luxury multi-family residences developed by AMLI Residential, a leader in the luxury apartment sector.

SPG stock has returned 5% in 2024, supported by a 5.3% dividend yield. The company’s forward P/E ratio stands at 26.7x, while the P/B ratio is 15.7x. Analysts project a 4% potential upside, setting a 12-month median price target at $155 for SPG stock.

On the date of publication, Tezcan Gecgil 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.

Tezcan Gecgil, PhD, began contributing to InvestorPlace in 2018. She brings over 20 years of experience in the U.S. and U.K. and has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Publicly, she has contributed to investing.com and the U.K. website of The Motley Fool.

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