Dividend stocks can be incredible investments. They have historically outperformed the market over the long term. The best returns have come from companies that regularly increase their dividends.
Dividend-producing companies also tend to generate better returns in stable or slightly higher markets. This could be what awaits us in 2024 after the massive market rally in 2023. Four outstanding dividend stocks are AbbVie (NYSE:ABBV), Brookfield Renewable Energy (NYSE:BEPC)(NYSE:BEP), Real estate income (NYSE:O)And Price T. Rowe (NASDAQ:TROW). They all offer dividends yielding 4% or more (more than double the S&P500(yield of 1.5%) which is expected to continue to increase in 2024.
1. A healthy dividend
AbbVie’s dividend yield is around 4%. THE healthcare company has an excellent track record of increasing this payment. It has increased its dividend every year since its inception in 2023, and has already revealed plans to increase it by another 4.7% for 2024. With this increase, AbbVie has increased its dividend by 285% since its inception.
The therapeutics and aesthetics company should be able to continue increasing its dividend in the future. While sales of its blockbuster Humira are declining due to generic competition, the rest of its portfolio is experiencing accelerated growth. AbbVie is also investing heavily in research and development to continue to find new treatments that can drive future growth. At the same time, it is using its financial strength to make acquisitions to strengthen its growth prospects. He recently agreed to buy ImmunoGen for $10.1 billion and Cerevel Therapeutic for $8.7 billion. These acquisitions will significantly improve its drug pipeline, paving the way for future dividend growth.
2. A powerful dividend
Brookfield Renewable currently offers a dividend of 4.7%. The renewable energy company has increased its payouts by at least 5% per year over the past dozen years. This is expected to continue, with Brookfield targeting annual dividend growth of 5% to 9% over the long term.
The company has enough power to generate growth towards the upper end of this range. It currently sees a trio of organic factors (inflation-related rate increases, margin expansion and development projects) fueling 7-12% annual growth in its funds from operations (FFO) per share until 2028.
Meanwhile, the company estimates that M&A activity could add more than 9% to its FFO per share each year. Brookfield recently closed three deals and has a few more in the works. These acquisitions will add significant additional FFO, allowing the company to generate FFO per share growth of over 10% in 2023 and 2024. This sets the stage for another healthy increase for its investors in 2024.
3. Lock in Growth
Realty Income’s dividend currently yields 5.3%. The real estate investment trust (REIT) has a phenomenal record of increasing its payouts. It has given raises to investors 123 times since going public in 1994, including five times in the past year.
This growth is expected to continue. Realty Income has already agreed to acquire another REIT Real Estate Spirit in a $9.3 billion deal. This acquisition is expected to increase its adjusted FFO by more than 2.5% per share in 2024. This represents more than half of its growth target of 4% to 5% per year. Meanwhile, after partnering with Spirit, Realty Income will generate enough cash retained after paying dividends (around $800 million per year) to fund acquisitions and push it into that range without raising equity. It should have no shortage of investment opportunities, especially as it has continued to expand its portfolio into new areas, including adding data centers, credit investments and consumer-focused medical properties over the past year.
4. The steady rise is expected to continue
T. Rowe Price currently offers a 4.5% dividend. The mutual fund manager has an exceptional track record of increasing its payouts. It increased it by another 1.7% in 2023, its 37th consecutive year of dividend growth.
While the company assets under management (AUM) After being hit in 2022 by the fall in the stock market, they resumed their upward trend in 2023. T. Rowe Price ended November at almost $1.4 trillion (compared to less than $1.3 trillion). dollars at the end of 2022). Assets under management are expected to continue to climb as stock and bond prices rise and more investors entrust their money to T. Rowe Price. The company also continues to launch new funds to help investors meet their financial needs, which will also help increase assets under management. Increasing assets under management will help increase the asset manager’s profits and fee cash flow, allowing it to continue to increase its payouts.
These high-yield payments are expected to continue to increase in 2024
AbbVie, Brookfield Renewable, Realty Income and T. Rowe Price all pay dividends yielding more than 4%. Better yet, these high-yield payouts are expected to continue to grow in the coming year. This allows these stocks to produce attractive overall returns, making them great stocks to buy for income and upside in 2024.
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Matthew DiLallo holds positions in Brookfield Renewable, Brookfield Renewable Partners, Realty Income and T. Rowe Price Group. The Motley Fool holds positions and recommends Brookfield Renewable, Cerevel Therapeutics and Realty Income. The Motley Fool recommends Brookfield Renewable Partners and T. Rowe Price Group. The Motley Fool has a disclosure policy.
4 Incredible Dividend Stocks Yielding Over 4% to Buy in 2024 was originally published by The Motley Fool