10 Best Dividend Stocks to Buy in 2024
A Look at the Past, Present, and Future
Investing in dividend stocks can be like setting yourself up with a steady income stream, whether for reinvestment or just a bit of financial comfort. As we look toward 2024, a handful of standout companies come to mind—each with its unique charm and history of strong dividends. Here’s a rundown of the 10 best dividend stocks you might consider for the coming year, with pros and cons, why they’re solid choices, and a look back at their dividends over the past decade.
1. Johnson & Johnson (JNJ)
Johnson & Johnson, a household name in healthcare, has held up strong in the dividend world. Over the past ten years, it’s averaged a steady 2-3% dividend yield and bumped its payout yearly, recently around $4.52 per share annually. Known for its consistent growth and resilience through economic ups and downs, it’s the kind of stock that keeps giving.
Pros:
- Resilient in economic downturns
- Consistent dividend growth, almost like clockwork
Cons:
- Recent lawsuits have brought some volatility
- Growth rate is slower than some tech peers
2. Procter & Gamble (PG)
P&G, another familiar name, has been a staple in dividend portfolios for years. With over six decades of increasing dividends, it has averaged around a 2.5% yield in recent years. Last year, the annual dividend was about $3.65 per share.
Pros:
- Reliable in almost any economy—people still buy essentials
- Strong dividend growth history (63 years and counting!)
Cons:
- Limited growth in emerging markets
- High competition in consumer goods
3. Coca-Cola (KO)
Coca-Cola is more than just sugary beverages—it’s a stable, dividend-paying machine with a global footprint. Over the last ten years, KO’s dividend yield has hovered around 3%, with 2023 seeing a payout of roughly $1.76 per share.
Pros:
- Extremely reliable, with over 60 years of growing dividends
- Great for income-focused portfolios
Cons:
- Declining soda sales in certain markets
- Limited growth potential in a health-conscious world
4. PepsiCo (PEP)
Pepsi isn’t just Coca-Cola’s rival; it’s a dividend star in its own right. With an annual dividend increase for the last 51 years, it’s currently yielding around 2.8%. PepsiCo’s stronghold in snacks and beverages keeps it as a reliable cash-flow generator.
Pros:
- Balanced portfolio between beverages and snacks
- Consistent dividend growth for over five decades
Cons:
- Sluggish growth in certain markets
- Vulnerable to supply chain pressures
5. Realty Income Corporation (O)
Nicknamed “The Monthly Dividend Company,” Realty Income is a unique real estate investment trust (REIT) that has been rewarding its shareholders with a monthly dividend for years. In 2023, it offered a yield of about 4.5%, paying around $2.98 per share yearly.
Pros:
- Monthly dividend payments—a rare treat!
- Diverse portfolio in retail, industrial, and office properties
Cons:
- Sensitive to interest rate hikes
- Real estate markets can be unpredictable
6. Apple (AAPL)
Apple isn’t the first company that comes to mind when thinking dividends, but it’s been a reliable dividend stock since 2012, gradually increasing payouts each year. In 2023, the annual dividend came to around $0.92 per share, with a yield of just under 1%.
Pros:
- Strong growth potential with dividends as a bonus
- Wide economic moat with high customer loyalty
Cons:
- Low yield compared to traditional dividend stocks
- Highly dependent on product innovation cycles
7. Microsoft (MSFT)
Microsoft has been building its dividend payout consistently, and though its yield is only around 1.1%, it’s a giant in both tech and dividends. The last ten years have seen substantial growth, with the 2023 payout at around $2.72 per share.
Pros:
- Strong growth potential, especially in cloud computing
- Dividend growth is healthy and reliable
Cons:
- Lower yield than income-focused investors might prefer
- Heavy competition in tech, especially cloud services
8. McDonald’s (MCD)
McDonald’s is a giant not just in fast food but in dividends, too. It has increased its dividend annually for 47 years, with a current yield of around 2.2%. The 2023 dividend came in at about $5.68 per share.
Pros:
- Strong brand with a global presence
- Dependable dividend growth track record
Cons:
- High dependence on consumer spending habits
- Faces growing competition from healthier alternatives
9. Exxon Mobil (XOM)
As one of the biggest players in the oil sector, Exxon Mobil has seen its share of highs and lows, but it’s held steady on dividends. In 2023, it offered a yield of around 3.8%, with an annual payout of $3.64 per share. Though energy prices are unpredictable, Exxon has historically delivered on dividends.
Pros:
- High dividend yield in the energy sector
- Strong earnings potential during high oil price periods
Cons:
- Sensitive to oil price volatility and regulatory changes
- Environmentally focused investors may shy away
10. AT&T (T)
AT&T has a rocky reputation with investors, but for income-focused folks, it’s still a go-to for high dividends. It offered around 5.5% in 2023, with a yearly dividend of roughly $1.11 per share. Despite the recent dividend cut, AT&T remains one of the most high-yield options out there.
Pros:
- High yield, ideal for income-seeking investors
- Well-established in telecommunications
Cons:
- Dividend cut in recent years casts doubt on stability
- Facing tough competition and high debt load
Conclusion on 10 Best Dividend Stocks to Buy in 2024
These ten stocks represent a diverse array of industries and payout histories, making them well-suited for different types of dividend investors. Johnson & Johnson and Procter & Gamble are ideal for steady income seekers, while Apple and Microsoft offer a blend of growth and dividends, perfect for those with a bit more risk tolerance.
When choosing dividend stocks, keep in mind that higher yields don’t always mean better investments. Companies like AT&T offer higher yields, but they may come with more volatility and potential risks. Meanwhile, stocks like Apple or Microsoft may not pay as much upfront, but they offer considerable growth potential and dividend increases over time.
In short, it’s a mixed bag. A well-rounded dividend portfolio often includes a blend of high-yield options, stable dividend-growers, and a few growth stocks that offer modest dividends. Do your research, stay diversified, and remember—patience pays off. After all, dividends are the gift that keeps on giving!
