Dividend Stocks

The Dividend Dominators: 3 Stocks That Will Make Your Portfolio Reign Supreme

In the face of market volatility, key Dividend Aristocrats players raise dividend payouts

The timing is perfect for loading up on dividend stocks as market experts expect the S&P 500 to increase 4% in June following a 5% rise in May as three potential rate cuts loom, possibly boosting already solid corporate profitability. Meanwhile, 97% of S&P 500 companies reported first-quarter results that were 3% better than consensus.

While the S&P 500 fell 20% during the COVID-19 pandemic, the S&P 500 Dividend Aristocrats Index fell roughly 15%; after the dot-com bubble collapsed, the S&P 500 fell 44% while dividend payers fell just 10%. This means that investing in dividend stocks is a good idea in even the toughest situations.

In light of these changes, one wholesaler is a great choice for buyers seeking “strong buy” dividend stocks, as rising sales and operating income lead to a possible 17% gain.

Another drug company that pays dividends is doing well because treatments are getting better. Even though this business is having trouble with regulations and health issues, investors remain interested in its oncology, immunology, and neuroscience products; its small wonder upside is 15%.

Lastly, a well-known retail company is giving investors a good return on their money by buying back shares and hiking dividends for 51 years and counting; the stock offers an 8% upside.

Sysco (SYY)

Source: JHVEPhoto/Shutterstock.com

Sysco (NYSE:SYY) is one of only a few stocks on the list of “Dividend Kings,” companies that have grown their dividends for 50 years or more in a row thanks to the wholesaler’s resilient business model during a market recession.

For the first time in a while, SYY is trading at an attractive discount, with analysts forecasting an 18% upside from the current price of $73, thanks to inline fiscal third-quarter numbers and long-time board chairman Edward Shirley’s health issues.

The current Chief Executive Officer, Kevin Hourican, took over the chairman’s responsibilities right away, but the timing of the development was close to its fiscal third-quarter revenue figures failing to live up to Wall Street expectations.

However, Hourican noted the company’s ability to turn negative restaurant traffic into revenues and market share as sales rose 2.7% to $19.4 billion, led by 2.9% U.S. food service volume and 0.4% local volume. EBITDA climbed 5.4% to $933 million, adjusted 8.5% to $976.6 million, and adjusted earnings-per-share climbed 6.7% to 96 cents.

Sysco also increased its fiscal year 2024 cost-out targets from $100 million to $120 million. From a shareholder perspective, investors got $753 million via $500 million in share repurchases and $253 million in dividends. It expects to return $2.25 billion to stockholders by fiscal year’s end.

AbbVie (ABBV)

Closeup of AbbVie (ABBV) building corporate office, an American biopharmaceutical company with its headquarters in Lake Bluff, Illinois, USA

Source: Valeriya Zankovych / Shutterstock.com

AbbVie (NYSE:ABBV) reported $12.3 billion in pharmaceutical sales for the first quarter of its fiscal year 2024 due to progress in immunity and neurology, with Rinvoq and Skyrizi showing the most growth.

By buying ImmunoGen, Landos Biopharma, and Cerevel Therapeutics, AbbVie wisely added to and improved its pipeline in cancer, immunology, and neuroscience; ABBV has now set itself up for growth, as shown by raising its profit forecast from $10.97 to $11.17 to $11.13 to $11.33.

At the 2024 annual meeting of the American Society of Clinical Oncology, AbbVie presented fresh results. ABBV-706 has shown encouraging outcomes in solid tumors, especially small-cell lung cancer. With unconfirmed answers included, ABBV-706’s confirmed objective response rate rose to 73% from 40%. Concerns exist, nonetheless, about cytopenia-related dose-limiting toxicities.

Another beauty product from AbbVie, Juvéderm Voluma XC, has been cleared by the FDA for use in the chin area. In addition, top-line results from the Phase 3 SELECT-GCA study showed that Rinvoq met its main goal of achieving continuous clearance in people with giant cell arteritis.

Walmart (WMT)

Image of Walmart (WMT) logo on Walmart store with clear blue sky in the background

Source: Jonathan Weiss / Shutterstock.com

Walmart (NYSE:WMT) is a “Dividend King” thanks to hiking dividends over 50 years in a row, with the most recent increase boosting its payout 9% to $0.83 per share. At 1.41%, the forward dividend yield isn’t very high versus the average yield for consumer staples, but the payout ratio of 31.13% indicates there is plenty of room for it to grow.

Financially, Walmart’s Q4 and FY24 were strong, with sales increasing 6% to $648.1 billion, largely due to its eCommerce successes with $100 billion in sales, leading to an earnings beat of 14%.

At the same time, the retailer is restructuring, closing 51 health locations in five states and its virtual care services while also adjusting store managers’ annual pay and bonuses. Base compensation for managers will rise to $128,000, with incentives linked to store earnings. If targets are reached, managers may receive 200% of their basic income.

In addition, Walmart is enhancing the shopping experience; examples include a better internet search engine, an AI system that reorders items, and AR “Shop With Friends” software. At the same time, Walmart and Affirm (NASDAQ:AFRM) have grown their relationship by offering “Buy Now, Pay Later” choices at self-checkout lines in more than 4,500 shops across the country, and in the Dallas-Fort Worth area, Walmart now has a drone delivery service.

On the date of publication, Faizan Farooque 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.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.

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