If you’ve read any of my work on Barchart before, you’ll know that the only thing I love more than income stocks are those that grow their dividend. This year marks my 25th year trading stocks and options, and that means I’ve been through the dot com bubble, financial crisis, and the pandemic. At least these three events stood out as “scary” times — not to mention the 20-25 corrections that occurred during the same period.
However, as scary as these events were, holding dividend-paying stocks helped lower the anxiety level as I was fairly sure the income would continue to roll in, and I wouldn't have to worry so much about the stocks trading price. In fact, during these periods, many companies even increased their dividends. Take the companies on the Dividend Aristocrats and Kings lists for example.
Dividend Aristocrats are S&P 500 listed companies that have increased their dividend for at least the last 25 consecutive years. Dividend Kings, on the other hand, do not need to be listed on the S&P 500, however, they would have had to increase their dividend for at least the last 50 consecutive years.
And in thinking about companies that increase their dividends, I thought, why not come up with a list of dividend stocks that could triple my income in the next 10 years. While I don’t have a crystal ball, I do have Barchart’s Stock Screener to help.
To come up with the stocks for this article, I screened for:
- Number of Analysts: 12+
- Consensus Rating: Moderate to Strong Buy
- Watchlists: Dividend Kings and Aristocrats. These are my saved watchlists.
- Annual Dividend Yield: From 2.75%
You might wonder why I added analysts first. This is my way of " asking the experts” and seeing what they say. It's important that the stocks aren’t a “hold” or less, as it may indicate that the stock is overvalued or that the company has short-term problems.
My watchlists are saved, and you’re able to add/remove whichever stocks you like.
Once I clicked “See Results,” I organized the list based on Div Yield. This tells me the stocks with the highest yield. My top three would be Realty Income, Chevron, and Federal Realty Investment Trust.
However, for diversification, I left out Federal Realty as it’s a REIT, like Realty Income. So I went with the next best, Kenvue Inc.
Now that we have the list, let's get to the top three dividend stocks that could triple your income in the next ten years.
Realty Income Corp (O)
Commercial real estate giant Realty Income Corporation has carved out a niche with its unique property acquisition approach. The company's success stems from long-term net lease agreements as it provides steady rental revenue from commercial clients. This Dividend Aristocrat’s income portfolio spans essential businesses across retail, industrial, and gaming sectors in many countries.
On the financial side, Realty Income Corp's Q2 2024 financial report shows considerable growth across major metrics. The company's revenue slightly increased to $1.3 billion from the previous year's $1 billion. This growth was mirrored in its bottom line, which climbed to $256 million, up from $195 million in the same period last year.
In addition, the REIT also showed resilience in its operational efficiency through its rent recapture rate of 105.7% on re-leased properties. This, combined with a slight uptick in FFO per share to $1.07, shows the company is in a positive trajectory.
The company offers a forward annual dividend of $3.156 which translates to a 5.29% dividend yield. Furthermore, a consensus among 20 analysts for O stock is buy rating with an average score of 3.75 out of 5.
Chevron (CVX)
Energy powers our world, and Chevron Corporation is at the center of industry. The company doesn't just pump oil and gas; it orchestrates a symphony of energy production from the ocean to the gas pump on our street corner. The corporation also explores renewables and pioneers carbon capture technologies. And with its vast network of pipelines, ships, and refineries, Chevron ensures energy flows effortlessly to where it's needed most.
Chevron's Q2 2024 financial results paint a nuanced picture of the energy giant's performance. Revenue increased to $51.2 billion, up from $48.9 billion in the previous year’s quarter. However, net income fell slightly to $4.4 billion, down from $6 billion in the same quarter last year — putting its quarterly EPS at $2.43.
Despite the minor setback in earnings, Chevron maintained a strong focus on shareholder value. The company distributed $6 billion to shareholders during the quarter, split between dividends and share repurchases. Speaking of which, the company’s forward annual dividend currently sits at $6.52, which works out to a yield of 4.44%.
Wall Street is also optimistic about Chevron's future — with a consensus among 20 experts rating CVX stock buy, with an average score of 4.3 out of 5. This outlook is further strengthened by projections of a substantial 40.33% (high target) upside potential in the next 12 months.
Kenvue Inc (KVUE)
Consumer health remains a cornerstone of well-being, and Kenvue Inc. stands at the forefront of this industry. The company offers a range of products across three key segments: Self Care, Skin Health and Beauty, and Essential Health.
Looking at Kenvue's Q2 2024 financials, the picture's a bit of a mixed bag. The company’s revenue was down a touch to $4 billion. The bottom line also took a hit, dropping to $58 million from $430 million last year — due to higher overall operating costs.
Despite the bumps, Kenvue maintains an optimistic outlook for the year ahead — it reaffirmed its projected net sales growth between 1% and 3% and an adjusted diluted EPS range of $1.10 to $1.20.
Kenvue's increased forward annual dividend of $0.82 per share might catch many investors’ eye, as this works out to a yield of 3.80%. Wall Street also seems to be nodding in approval, as well. A consensus among 14 analysts rate KVUE stock a buy, with an average score of 3.45 out of 5.
Final Thoughts
I believe dividend stocks have a place in every investor’s portfolio. A well-diversified portfolio with quality companies operating in various industries, and demonstrating years of growth through economic downfalls is a great place to start. Sure, these stocks will face volatility during uncertainties, but, I’d say they are opportunities to pick them up at a discount. Not only that, their growing dividends offer investors a reason to pause and ask if hitting the sell button is a mistake. As usual, always do your due diligence and never stop learning.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
