7 Must-Have Dividend Stocks for Consistent Income in 2024

Stocks to buy

Welcome to the intriguing intersection of dividends and growth, where 2024 unveils a captivating ensemble of seven must-have dividend stocks. Among investment choices, striking the right chord between consistent income and potential growth is a delicate art. The first one on the list takes the lead, showcasing a solid forward dividend yield and a staggering 21 years of consistent dividend growth. The technological giant promises advancements, making it a compelling choice for investors seeking stability and innovation.

Follow the rhythm to the second one, where a forward yield of over 6% is coupled with strategic priorities focusing on operational edge and portfolio optimization. Meanwhile, the third steals the spotlight with its streaming prowess, attracting over 112 million subscribers. But, of course, dividends aren’t just about entertainment; they’re about stability and prospects. Similarly, the fourth enters the stage with a forward dividend yield of 4.5% and robust growth in the healthcare sector. This is setting the scene for potential long-term financial flexibility.

Overall, this is not merely a list of stocks. It’s a symphony of strategic insights, financial performances, and future outlooks. With that, here are seven of the top must-have dividend stocks you may want to consider today.

Lockheed Martin (LMT)

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Lockheed Martin (NYSE:LMT) offers a forward dividend yield of 2.93%, an annual payout of $12.60, and a sustainable payout ratio of 43.66%. The company boasts an 8.18% five-year growth rate and a remarkable 21 years of consistent dividend growth.

For 2024, Lockheed Martin anticipates a top-line between $68.5 billion and $70 billion; this represents 2.5% growth. The midpoint of this range factors in growth in three out of four segments, with Missiles and Fire Control (MFC) leading at 7% growth from a strong munitions backlog.

Regarding F-35 deliveries, a handful of deliveries is expected in the first half of 2024, with the majority, around 90%, anticipated in the second half. Finally, the TR-3 software configuration is significant as it promises advanced capabilities, including air-to-air and air-to-ground munitions, sensing, jamming, and cybersecurity. However, the maturation process is taking slightly longer than initially anticipated, leading to a target for customer acceptance in the second or third quarter.

3M (MMM)

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3M (NYSE:MMM) carries a forward dividend yield of 6.25%, an annual payout of $6.00, and a payout ratio of 64.94%. Despite a modest 1.98% five-year growth rate, 3M stands out with 65 years of uninterrupted dividend growth. It’s another one of the top must-have dividend stocks.

As 3M enters 2024, it has strong momentum from its strategic priorities in 2023. 3M focuses on key areas, including improving operational performance through ongoing restructuring efforts, accelerating efforts to optimize its portfolio, and addressing risk and uncertainty. Additionally, the guidance for 2024 reflects the company’s focus on strengthening its competitive position, achieving underlying margin improvement, and maintaining strong cash flows.

Overall, 3M expects adjusted organic growth of flat to plus 2% with continued substantial margin expansion. The completion of the healthcare spin will be a significant milestone. The company anticipates another year of robust cash flows with an adjusted conversion rate of 95% to 105%. The strong cash flow may support solid dividend payments.

Disney (DIS)

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Disney (NYSE:DIS) has a trailing twelve-month (TTM) dividend yield of 0.31%, a $0.30 annual payout, and is also another one of the top must-have dividend stocks.

At its core, Disney’s lead in the streaming business is epitomized by the extraordinary growth in its core Disney+ subscribers. Launched just four years ago, Disney+ has evolved into a powerhouse in the streaming industry. The platform’s initial success, with approximately 10 million sign-ups in the first 24 hours alone, set the stage for its remarkable journey. As of the end of fiscal 2023, Disney+ core subscribers had skyrocketed to over 112 million, reflecting an exponential increase in the user base.

Furthermore, adding an ad-supported tier to Disney+ represents a strategic move to enhance revenue streams and cater to different consumer segments. In Q4, the ad-supported Disney+ product experienced notable growth, adding approximately two million subscriptions and reaching 5.2 million. Finally, over 50% of new US subscribers in Q4 opted for the ad-supported Disney+ product.

Walgreens Boots Alliance (WBA)

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Walgreens Boots Alliance (NASDAQ:WBA) offers a forward dividend yield of 4.38%, an annual payout of $1.00, and a sustainable payout ratio of 55.01%. Walgreens Boots Alliance has a 2.71% five-year growth rate and 47 years of dividend growth.

Here, healthcare segment growth is a vital fundamental supporting the overall growth of Walgreens Boots Alliance. In Q1 2024, the US Healthcare segment reported significant year-on-year profit improvement. This suggests successful strategic initiatives within the healthcare sector.

VillageMD, a key segment component, achieved an impressive 23% year over year growth in full-risk lives. Also, there is a 9% growth in fee-for-service volumes. Shields, another entity in the healthcare portfolio, reported outstanding sales growth of 27% in the first quarter, surpassing planned expectations.

Lastly, the scheduled buyout of the Boots pension plan in 2025 aligns with efforts to eliminate plan obligations and commitments. This may contribute to long-term financial flexibility.

Procter & Gamble (PG)

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Procter & Gamble (NYSE:PG) provides a forward dividend yield of 2.41%, an annual payout of $3.76, and a payout ratio of 58.27%. Procter & Gamble delivered a 5.58% five-year growth rate and 67 years of continuous dividend growth.

Additionally, Procter & Gamble’s decision to raise the outlook for core earnings per share for fiscal 2024 signifies confidence in its adaptability. The focus on maintaining guidance ranges for organic sales growth of 4% to 5% for the fiscal year reflects a realistic yet optimistic outlook. Procter & Gamble focuses on maintaining core EPS growth toward the upper end of the renewed guidance ranges.

In Q2 fiscal 2024, the core EPS and operating margin improvement are critical aspects of Procter & Gamble’s financial edge. The reported $1.84 core EPS reflects a 16% increase over Q2 fiscal 2023. This indicates the company’s ability to generate value for shareholders. Finally, a core operating margin increase of 4%, driven by gross margin expansion and productivity improvements. This further solidifies Procter & Gamble’s dividend sustainability.

Chevron (CVX)

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Chevron (NYSE:CVX) boasts a forward dividend yield of 4.05%, an annual payout of $6.04, and a 43.21% payout ratio. With a 6.16% 5-year growth rate, Chevron has a track record of 36 years of dividend growth. In addition, it’s another one of the top must-have dividend stocks.

On the operational side, TCO production on a 100% basis in 2024 is forecast to yield free cash flow in 2025 of more than $4 billion. Also, Chevron invested in traditional energy by closing the PDC Energy (NASDAQ:PDCE) acquisition. The company invested in new energies by acquiring a majority stake in Utah’s green hydrogen production and storage hub.

Furthermore, Chevron’s sustained return on capital employed above 12% for nine consecutive quarters (Q3 2023) is a vital fundamental factor. This suggests efficient capital utilization, highlighting Chevron’s prolonged capability to generate higher returns on the capital employed in its operations.

Finally, Chevron maintained a strong balance sheet. It ended the quarter with a net debt ratio in the single digits. A low net debt ratio indicates financial stability and the ability to cover short-term obligations. Thus, this supports the company’s growth in the Fed’s longer-term scenario, reducing financial risks.

JPMorgan Chase (JPM)

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JPMorgan Chase (NYSE:JPM) offers a forward dividend yield of 2.44%, an annual payout of $4.20, and a conservative payout ratio of 25.28%. JPMorgan Chase has an 8.55% 5-year growth rate and a growing dividend for the past nine years. It’s another one of the top must-have dividend stocks.

Moving to the firmwide Q4 2023 results, excluding First Republic, JPMorgan delivered a 7% year-on-year increase in revenue. Also, Net Interest Income (NII) ex-markets have an 11% increase, primarily driven by higher rates. Non-Interest Revenue (NIR) ex-markets increased by 1%, and market revenue saw a 2% uptick.

Fundamentally, JPMorgan’s solid capital position is a fundamental strength contributing to its stability. Ending the quarter with a Common Equity Tier 1 (CET1) ratio of 15%, up 0.7% versus Q3 2023, indicates a strong capital buffer. This increase is primarily driven by net income, other comprehensive income gains accumulated, and lower risk-weighted assets.

Overall, the CET1 ratio is well above regulatory requirements. As a result, this gives JPMorgan the flexibility to strategically deploy capital for growth opportunities, share buybacks, or counter any potential economic downturns. Hence, a disciplined approach to capital management supports consistent dividend payouts.

As of this writing, Yiannis Zourmpanos held long positions in MMM and DIS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

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