As a new year approaches, many people decide to improve themselves in one way or another. For many, this means improving their family’s financial situation. Some of them may be considering high-risk options, but there are also safe ways to do it.
If you’re looking for a low-risk way to generate more income on your investments in 2024, read on. Here are three stocks that have what it takes to safely deliver growing dividend streams to their shareholders in the years to come – and all three stocks are solid buys today.
1. Apple
When it comes to limiting risk for investors, the financial strength of a company is of the utmost importance. This is where Apple (NASDAQ:AAPL) excels. The iPhone maker’s profits and cash flow generation are simply incomparable, even among its mega-cap tech peers.
Apple’s well-designed hardware and software integrate seamlessly to create consistently excellent customer experiences. It’s a simple but hard-to-replicate formula for success – one that has helped Apple build a global customer base that includes more than 2 billion installed devices and 1 billion paid subscriptions.
Better yet, once someone buys one Apple device, they tend to buy another one. These loyal customers are behind the company’s incredible financial results.
The tech giant generated a staggering $383 billion in revenue and $97 billion in net profit over the past 12 months. This breathtaking profitability, combined with a fortress-like balance sheet – Apple’s cash reserves and investments stood at $162 billion as of September 30 – has allowed it to reward its shareholders with $15 billion in dividends and $78 billion in stock buybacks during his tenure. the last financial year only.
In total, Apple has increased its cash payouts to investors by 120% over the past decade. With artificial intelligence (AI) likely to drive a powerful technology upgrade cycle, you can expect this proven wealth creator to continue growing its profits and dividends in the years to come.
2. Lockheed Martin
Although we may wish it were not true, the reality of today’s world is that no nation is secure without a strong national security strategy. As a leading defense contractor, Lockheed Martin (NYSE:LMT) helps countries protect their citizens from those who would harm them.
Lockheed’s F-35 stealth jet plays a central role in the global security strategies of the U.S. military and 17 allied nations. Lockheed also participates in the production of many defensive systems that helped Ukraine resist the Russian invasion, such as the Javelin anti-tank system and the High Mobility Artillery Rocket System (HIMARS). In addition to strong demand for these proven platforms, Lockheed’s broad product portfolio, which includes drones, helicopters, cargo planes and spacecraft, helps further reduce risks for investors.
The long life of many of its products gives Lockheed a level of visibility and predictability over future revenues that few other companies possess. The F-35, for example, is expected to remain in service until 2070.
The reliable cash flow from these product lines allows the defense titan to pay an ever-increasing amount. dividend to its shareholders (current yield of 2.7%). Lockheed has increased its cash payouts for 21 consecutive years.
3. Coca-Cola
Consumers may be reducing their consumption of sugary drinks, but Coca-Cola (NYSE:KO) I’m very good. The beverage colossus is more than just a soda seller – and sales of its wide range of drinks continue to grow.
Coca-Cola offers a wide range of healthier drinks, such as tea, coffee, milk and nutrient-fortified water. Gold Peak, Costa Coffee, Fairlife and Vitaminwater are among the company’s collection of popular brands.
Coca-Cola’s powerful global marketing and distribution system allows it to adapt to changing consumer tastes. About 25% of its gross profit growth in 2023 was attributed to its innovation efforts.
Additionally, management’s margin-enhancing initiatives are bearing fruit. Coca-Cola has divested most of its bottling operations in recent years. These and other efforts to increase efficiency helped increase the company’s adjusted operating margin to nearly 30%, up from 26.5% in 2017.
In total, Coca-Cola’s revenue and free cash flow have grown 7% and 14% annualized, respectively, over the past five years. This steady growth has allowed Coca-Cola to extend its impressive streak of consecutive annual dividend increases to 61 years.
Even bigger cash payouts likely await investors. Coca-Cola’s core markets are expected to grow 4-10% annually in the coming years. Management, in turn, expects the company’s sales and earnings per share to grow 6% and 9% annually, respectively. And more profits should mean bigger dividends for Coca-Cola shareholders.
Should you invest $1,000 in Coca-Cola right now?
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool holds positions at Apple and recommends it. The Motley Fool recommends Lockheed Martin and recommends the following options: Long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.
3 safe dividend stocks to buy in 2024 was originally published by The Motley Fool
