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24/7 Insights
- Dividend Aristocrat shareholders could see some big upside in August.
- Looking at quality stocks that pay dependable quarterly dividends makes sense now.
- Also: 2 Dividend Legends to Hold Forever
Since 1926, dividends have accounted for almost a third of the total return of the S&P 500, so regardless of whether the market is up, down, or flat, regular dividend payments from high-quality blue chip stocks provide investors with a much better chance for success.
With inflation staying frustratingly strong and the potential for stock market turbulence in the third quarter, looking at quality stocks that pay dependable quarterly dividends makes sense.
When income investors look for defensive companies paying big dividends, they are often drawn to the Dividend Aristocrats, and with good reason.
The 67 companies that made the cut for the 2024 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. But the requirements go even further, with the following attributes also mandatory for membership on the list:
- Companies must be worth at least $3 billion during each quarterly rebalancing
- Average daily volume of at least $5 million in transactions for every trailing three-month period at every quarterly rebalancing date
- Be a member of the S&P 500
We screened the 2024 Dividend Aristocrats and found five companies that could be primed for a huge August. All are rated Strong Buy on Wall Street.
AbbVie
AbbVie is ranked sixth on the list of largest biomedical companies by revenue.
This stock is one of the top pharmaceutical stock picks across Wall Street and pays a dependable 3.88% dividend. AbbVie Inc. ( NYSE: ABBV ) discovers, develops, manufactures, and sells pharmaceuticals worldwide.
The company offers:
- Humira, an injection for autoimmune and intestinal Behçet's diseases and pyoderma gangrenosum
- Skyrizi to treat moderate to severe plaque psoriasis, psoriatic disease, and Crohn's disease
- Rinvoq to treat rheumatoid and psoriatic arthritis, ankylosing spondylitis, atopic dermatitis, axial spondyloarthropathy, ulcerative colitis, and Crohn's disease
- Imbruvica for the treatment of adult patients with blood cancers; Epkinly to treat lymphoma
Elahere to treat cancer - Venclexta/Venclyxto to treat blood cancers
It also provides:
- Facial injectables, plastics and regenerative medicine, body contouring, and skin care products
- Botox therapeutic
- Vraylar for depressive disorder
- Duopa and Duodopa to treat advanced Parkinson's disease
- Ubrelvy for the acute treatment of migraine in adults
- Qulipta for episodic and chronic migraine
In addition , the company offers Ozurdex for eye diseases, Lumigan/Ganfort and Alphagan/Combigan for reducing elevated intraocular pressure in patients with open-angle glaucoma or ocular hypertension, Restasis to increase tear production, and other eye care products.
Further, it provides:
- Mavyret/Maviret to treat chronic hepatitis C virus genotype 1-6 infection
- Creon, a pancreatic enzyme therapy
- Lupron to treat advanced prostate cancer, endometriosis, and central precocious puberty, and patients with anemia caused by uterine fibroids
- Linzess/Constella to treat irritable bowel syndrome with constipation and chronic idiopathic constipation
- Synthroid for hypothyroidism
Atmos Energy
Atmos Energy is one of the largest U.S. natural-gas-only distributors.
This utility stock is perfect for conservative accounts looking for income and pays a 2.81% dividend. Atmos Energy Corp. ( NYSE: ATO ), together with its subsidiaries, engages in the regulated natural gas distribution and pipeline and storage businesses in the United States.
It operates in two segments:
- Distribution
- Pipeline and Storage
The Distribution segment is involved in the regulated natural gas distribution and related sales operations in eight states. This segment distributes natural gas to approximately 3.3 million residential, commercial, public authority, and industrial customers. As of September 30, 2022, it owned 73,243 miles of underground distribution and transmission mains.
The Pipeline and Storage segment engages in pipeline and storage operations. This segment transports natural gas for third parties and manages five underground storage reservoirs in Texas.
It also provides ancillary services customary to the pipeline industry, including parking arrangements, lending, and inventory sales, and it owned 5,645 miles of gas transmission lines.
Essex Property Trust
Essex Property Trust is a real estate investment trust that invests in apartments in California and the Seattle metropolitan area.
This stock is an outstanding way for investors looking to add an inflation-busting real estate position that pays a big 3.60% dividend. Essex Property Trust Inc. ( NYSE: ESS ) an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets.
Essex currently holds ownership stakes in 246 apartment communities, which include approximately 60,000 apartment homes. Additionally, the company has six properties in various stages of active development.
These properties represent significant growth potential for Essex, making it an appealing option for investors interested in capitalizing on growth opportunities.
Realty Income
Realty Income invests in free-standing, single-tenant commercial properties in the United States, Spain, and the United Kingdom.
This is another ideal stock for growth and income investors looking for a safer contrarian idea for August that pays a whopping 5.33% dividend. Realty Income Corp. ( NYSE: O ) is an S&P 500 company dedicated to providing stockholders with dependable monthly income.
The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 6,500 real estate properties owned under long-term lease agreements with commercial tenants.
Realty Income's track record is a testament to its stability and reliability. With 644 consecutive common stock monthly dividends declared throughout its 55-year operating history, and 123 dividend increases since its public listing in 1994, it has earned its place as a top real estate member of the S&P 500 Dividend Aristocrats index.
Target
Target operates a chain of discount department stores and hypermarkets. It is headquartered in Minneapolis and is the seventh-largest retailer in the United States.
Despite some challenging public relations issues last year, Target Corp. ( NYSE: TGT ) has demonstrated its resilience and remains a solid and safe retail total return play. The company also offers a solid 3.17% dividend. Target operates as a general merchandise retailer in the United States, offering a wide range of products including apparel, beauty and personal care, baby gear, and pet supplies.
Target also provides:
- Dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, and food service
- Electronics, which includes video game hardware and software, toys, entertainment, sporting goods, and
- Luggage; and furniture
- Lighting, storage, kitchenware, small appliances
- Home décor, bed and bath, home improvement
- School/office supplies
- Greeting cards, party supplies, and other seasonal merchandise
In addition, the company sells merchandise through periodic design and creative partnerships, shop-in-shop experience, and in-store amenities. Further, it sells its products through its stores and digital channels, including Target.com.
The company suffered a “Bud Light” moment last year after disastrous merchandising of LGBTQ products that struck a nerve with many shoppers. While not as bad as the beer giant's conundrum, it still proved to be a huge negative that has seemingly subsided some.
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