Dividend-paying stocks remain all-time investors’ favorites because they provide a dual benefit of growth and steady income. With the average yield of the S&P 500 Index at a modest 1.6%, the allure of high-dividend stocks is undeniable for those seeking a reliable income stream.
Dividend stocks are reliable during economic turbulence, providing both the safety of regular income and the potential for capital gain.
There are over 5,000 dividend stocks in the market, and diving into the details of each might seem like a Herculean task. However, the good news is that such exhaustive research is unnecessary. We have got you covered.
In spring 2024, let’s delve into three dividend stocks in the United States that promise to increase the income of your investment portfolio.
Affiliate
The Sure Dividend Newsletter for high-quality dividend growth stocks.
- The monthly newsletter includes stock analyses, portfolio ideas, dividend risk scores, real money portfolio, etc.
- Risk free 7-day free trial and $41 off only through Dividend Power for $158 per year.
- Sure Dividend Coupon Code – DP41S
Click here to try the Sure Dividend Newsletter (7-day free trial).
3 Dividend Stocks for Spring 2024
Regions Financial Corp (RF)
Regions Financial Corporation (RF) is a significant player in the American banking scene. It is headquartered in Alabama and offers a wide range of financial services to individual customers and businesses.
With a strategic division of its services into Corporate, Consumer, and Wealth Management segments, Regions has firmly established its position, boasting around 1,300 branches across the Southern and Midwestern United States and Texas.
The company made headlines with its fourth-quarter financial results for 2023, disclosed on January 19. Despite facing a downward trend, with revenues declining 10% to reach $1.8 billion, Regions surpassed analysts’ expectations.
An essential aspect of the report was the bank’s net interest margin, which saw a modest decline of 13 basis points, settling at 3.60%. On the brighter side, Regions reported a 3% growth in its loan portfolio over the preceding year, albeit a deceleration from the previous quarter’s 4% growth rate.
Impressively, the bank reported earnings per share (EPS) of $0.52, outpacing analysts’ consensus estimates.
While the banking sector is not renowned for explosive growth, Regions has navigated its path through steady loan and deposit expansions, ensuring revenue growth in stable economic conditions.
A vital element of the bank’s strategy to boost its EPS between 2013 and 2019 was its aggressive share buyback program, which reduced its share count by over 30% in six years.
Regions have also been generous with their dividends, significantly increasing payouts between 2012 and 2019, positioning the dividend payout ratio at a robust 39%. The bank’s concentrated market presence in the U.S. enables it to customize its offerings to meet the specific needs of its customers effectively.
This focus, combined with its higher-than-average net interest margins and an impressive return on equity of approximately 13%, underscores Regions’ competitive edge in the industry.
Regions Financial Corp stock currently offers a dividend yield of 5.1%, making it an attractive option for investors seeking steady income streams.
Gilead Sciences (GILD)
Gilead Sciences (NASDAQ: GILD) is a compelling choice for those seeking stability and attractive returns. This company offers a generous dividend yield of 4.3% and promises investors a robust and secure portfolio component. It is our second dividend stock for spring 2024.
Gilead’s financial backbone is its array of HIV treatments, which have consistently driven its core earnings. Impressively, the firm’s revenue from HIV products reached $18.2 billion last year, marking a 6% increase from the previous year. However, Gilead’s strategic vision extends beyond just HIV.
The company is expanding its footprint in the oncology and liver disease sectors. The oncology division alone saw a remarkable 37% surge in revenue, amounting to $2.9 billion. In comparison, liver disease treatments added $2.8 billion to the company’s revenue streams.
A notable development in Gilead’s growth strategy is its acquisition of CymaBay Therapeutics for $4.3 billion. This move significantly strengthened its liver disease treatment portfolio. This acquisition, alongside Gilead’s impressive $7.4 billion free cash flow for 2023, underscores the company’s solid financial health and capacity for strategic investments and dividend payments.
Last year, Gilead returned $3.8 billion to its shareholders in dividends, with ample cash reserves left for reinvestment and operational growth.
The company’s proactive approach to diversification and expansion ensures its position as a safe investment. It highlights its potential for long-term value creation. Gilead’s recent announcement of a 2.7% increase in its dividend, continuing a trend of dividend growth since 2016, further boosts its appeal to investors.
With the stock trading at a mere ten times projected future earnings, Gilead is an undeniably attractive opportunity for those looking to invest in a high-yield, low-risk healthcare stock for the long term.
Coca-Cola Co (NYSE: KO)
Dividends play a pivotal role in investing, especially when examining companies like Coca-Cola Co (NYSE: KO), which has proven to be a stalwart in the dividend space. The dynamics of dividend yields are influenced primarily by the fluctuation in a company’s stock price and its track record of dividend increments.
Consider a scenario where a company’s stock appreciates by an average of 5% annually and similarly increases its dividends by 5% yearly. In such a case, the dividend yield is expected to remain consistent. However, if the stock price surges significantly, say it doubles, the yield might drop if the dividend sees a modest increase of 25%. Still, overall investor satisfaction remains high due to the appreciable gain in stock value.
Despite not leading the market in performance, Coca-Cola has distinguished itself as a remarkable dividend payer. On February 15, it announced its 62nd year of consecutive annual dividend increase, setting the quarterly dividend at $0.485 per share, which translates to $1.94 annually.
Earning the title of a Dividend King, Coca-Cola is among the top companies that have not only paid but also increased their dividends for at least 50 years straight. Coca-Cola takes a different approach, unlike some companies that opt for minimal increases to maintain their status. It can afford significant dividend hikes, supported by solid earnings growth and a robust balance sheet. The latest increase of 5.4% is notable for such a gigantic company. With nearly $8 billion disbursed as dividends over the past year, each percentage point rise in dividend costs the company an additional $80 million.
Coke does not necessarily follow a rising bull market but still does not depend on the economy and is recession-proof. Still, its business model can withstand economic uncertainties, making it a reliable investment. This stability particularly appeals to risk-tolerant investors nearing retirement and anyone looking for a dependable dividend-paying stock. Coca-Cola represents an ideal investment choice for those seeking financial security in their portfolio.
Related Articles About Coca-Cola (KO) on Dividend Power
Related Articles on Dividend Power
Here are my recommendations:
Affiliates
- Simply Investing Report & Analysis Platform or the Course can teach you how to invest in stocks. Try it free for 14 days.
- Sure Dividend Newsletter is an excellent resource for DIY dividend growth investors and retirees. Try it free for 7 days.
- Stock Rover is the leading investment research platform with all the fundamental metrics, screens, and analysis tools you need. Try it free for 14 days.
- Portfolio Insight is the newest and most complete portfolio management tool with built-in stock screeners. Try it free for 14 days.
Receive a free e-book, “Become a Better Investor: 5 Fundamental Metrics to Know!” Join thousands of other readers !
*This post contains affiliate links meaning that I earn a commission for any purchases that you make at the Affiliates website through these links. This will not incur additional costs for you. Please read my disclosure for more information.
Alexandru Artenie
I am a long-term investor and book author who truly believes financial freedom is accessible to everybody! I have built on my own several reliable income streams through various portfolios, utilizing strategies such as Smart Beta, Dividend Growth, and Crowdfunding of Real Estate. With years of experience in investing and personal finance, I have identified vital metrics and methods for selecting stocks and setting up an investment portfolio that I now want to share with beginners and experienced investors through my books and blog articles. I take a practical and straightforward approach to investing. My content does not contain dry theories or fluff; every sentence is easy to understand and packed with valuable insights.