3 Dividend Aristocrats That Pay You More and More Money

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Smart investors are aware that growing your money without working for it can happen through the right investment strategy. If you are like me, you will always be on the lookout for ways to generate passive income and the easiest way to do this is through dividend stocks. Well-established companies pay steady dividends to shareholders and you can reinvest this income into other stocks. With hundreds of dividend stocks out there, the trick is to pick those that have a steady dividend hike history and haven’t paused their dividends for years.

Key Points in this Article

• You can generate passive income by investing in the right dividend stocks.
• The three stocks identified here have a long dividend paying history, an impressive yield and a solid payout ratio. Besides the dividend income, these stocks also promise capital growth.
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These are companies committed to rewarding shareholders, no matter what. The companies are profitable, have a strong position in the industry, and enjoy enough liquidity to keep the dividends stable. Here are three dividend stocks that will pay you more and more money.

Pfizer (PFE)

Pharmaceutical company Pfizer ( NYSE: PFE ) became a household name during the pandemic. The company cracked the code to success with the COVID-19 vaccine and saw massive sales growth. However, the end was inevitable and Pfizer started to see a drop in vaccine demand, thus, seeing a drop in revenue. The management made the most of the cash flow it generated from vaccine sales to make acquisitions that will boost its portfolio including the $43 billion acquisition of Seagen . Today, Pfizer might be down from the highs it once reached but the business is set to bounce back.

Exchanging hands for $28, PFE stock is up 8% in the past 6 months and looks undervalued to me. It enjoys an impressive dividend yield of 5.92% and has increased dividends for 15 consecutive years. After reporting a year-over-year revenue drop in the past five quarters, Pfizer has finally rebounded and reported an improved second quarter . Its revenue came in at $13.3 billion, up 2% YOY, and the EPS stood at 60 cents.

The management is now looking at $1 billion for the full-year earnings outlook and is aiming for a 9% to 11% growth rate. It is also working on a multi-year plan to cut costs and is aiming to deliver $1.5 billion in savings by 2027.

The worst is over for Pfizer and looking at its drug portfolio in addition to Seagen’s approved cancer products, the company is in a very strong position to see steady revenue growth. If you are here for a dividend yield over 5%, Pfizer is the stock to buy and hold.

PepsiCo (PEP)

Beverage giant PepsiCo ( NASDAQ: PEP ) is a global household name. The company is highly diversified with several brands and enjoys consumer loyalty. Close to its 52-week high, PEP stock is trading at $178 and is up 3% YTD. While the company has seen a slowdown in sales due to inflationary pressures and low consumer spending, this is one business that will continue to remain relevant for years to come.

A temporary slowdown speaks nothing about the potential of PepsiCo. The stock has a dividend yield of 3.04% and has raised dividends for 52 consecutive quarters. An excellent investment, the company has a payout ratio of 73%. The company is fundamentally strong and has the ability to navigate through market volatility.

In the second quarter , it generated a revenue of $22.5 billion and an EPS of $2.28. While it reported only a 1% increase in net sales, the company struggled in the home market. The management mentioned that the slowdown is due to cost-conscious customers. It has a cautious outlook for the year but has reiterated the guidance for earnings growth of at least 8%. A rate cut could lead to an improvement in Pepsi’s numbers.

While it is known for the soda brand, it owns more than 500 product brands sold globally. The economy will eventually improve and people will continue to eat and drink. Its legendary dividend history is just one reason to buy the stock. PepsiCo is a rock-solid business to hold for many years.

Exxon Mobil (XOM)

Exxon Mobil ( NYSE:XOM ) is one of the best oil and gas stocks to add to your portfolio. The oil giant has recently closed the acquisition of Pioneer Natural Resources ( NYSE: PXD ). Trading at $114, XOM stock remains undervalued despite having soared 11% YTD. The stock is moving closer to the 52-week high of $123 and could be an ideal long-term play.

A dividend aristocrat, Exxon Mobil has a dividend yield of 3.33% and has raised dividends for over 25 consecutive years. The company is entering the massive hydrogen industry and has partnered with Air Liquide for the low-carbon hydrogen and ammonium production facility. This opens up a new market and a massive opportunity for the oil and gas giant.

As one of the oldest names in the industry, Exxon Mobil continues to remain at the top of the industry and its planned hydrogen production unit will be the largest in the world. The company also plans to grab a share of the lithium industry and is planning to produce lithium from its land in southern Arkansas. Exxon Mobil aims to produce enough lithium to be able to meet the needs of 1 million electric vehicles annually by 2030.

Its second-quarter earnings stood at $7.1 billion and the net production was 4.4 million oil-equivalent barrels each day, a 15% jump quarter-over-quarter. As crude oil prices continue to rise, Exxon Mobil will strengthen its position. It is working to remain the world’s biggest company and the diversification into the hydrogen sector could give it a solid push. XOM is a low-risk, steady-income stock.

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