In fiscal Q1 of 2024, the U.S. economy hit a speed bump, with growth taking a sharper-than-anticipated dip. Adding to the mix, the Federal Reserve signaled it won't consider interest rate cuts until inflation is cooling down toward its 2% goal. As a result, traders are delaying bets on the first rate cut until at least September.
As volatility rattles the market, dividend stocks are a rock-solid anchor, offering a steady stream of passive income as a comforting cushion for investors navigating the choppy market waters. The best dividend-paying stocks right now are companies that can weather market storms, deliver steady earnings growth, and are committed to sustaining dividends.
Here are five dividend-paying stocks for investors seeking a mix of yield and growth.
Dividend Stock #1: Alphabet
Mountain View, California-based Alphabet Inc. (GOOGL), Google's parent company, is a tech powerhouse with a global footprint. Embracing AI since 2016, it powers flagship products like Gmail, Google Maps, and Photos. With a staggering $2 trillion market cap, Alphabet's stellar growth rides on the success of its diverse product lineup, especially Google Search, which reigns supreme in the global search engine arena.
Shares of GOOGL rose 56.6% over the past 52 weeks, surpassing the broader S&P 500 Index's ($SPX) 22.2% gain over the same time frame.
The tech giant recently announced its first-ever dividend payment of $0.20 per share, payable to its stockholders on June 17. The company “intends to pay quarterly cash dividends in the future.” Alphabet also announced a new $70 billion stock buyback.
Alphabet stock has a consensus "Strong Buy" rating. Out of 44 analysts covering GOOGL, 35 recommend a "Strong Buy," three give a "Moderate Buy," and six advise a "Hold" rating. The mean price target is $189.33, representing an upside potential of 14.5% from current levels.
Dividend Stock #2: Verizon Communications
New York-based Verizon Communications Inc (VZ) is a leading provider of communication, technology, and entertainment services globally. With a market cap of $165 billion, the company is renowned for its top-notch network, offering reliable coverage and fast data connections to consumers, businesses, and governmental entities worldwide.
Shares of Verizon Communications have advanced 3% on a YTD basis, while over the past six months, it rose by 8.3%.
Verizon Communications has a solid track record of 19 years of consecutive dividend increases. On May 1, the telecom giant paid its shareholders a quarterly cash dividend of $0.665 per share. It offers an annualized dividend of $2.65 per share, resulting in a dividend yield of 6.76%.
Analysts have a consensus rating of “Moderate Buy” on VZ stock, with a mean target price of $44.34, which indicates an upside potential of about 14.3% from current levels. Out of 20 analysts covering the stock, six have a “Strong Buy” rating, three have a “Moderate Buy” rating, and 11 have a “Hold” rating.
Dividend Stock #3: Micron Technology
Founded in 1978, Micron Technology, Inc. (MU) is a leading manufacturer of innovative memory and storage solutions, providing essential tech for industries like computing, networking, and mobile communications. The Boise-based company's top-notch offerings include DRAM (Dynamic Random-Access Memory), NAND Flash memory, solid-state drives (SSDs), and other memory and storage products. Its market cap currently stands at about $121.5 billion.
Over the past 52 weeks, MU stock has soared 79%, surpassing the broader SPX.
On April 16, the company paid its shareholders a quarterly dividend of $0.115 per share. It offers an annualized dividend of $0.46 per share, resulting in a yield of 0.42%. Furthermore, Micron Technology maintains a payout ratio of 12.8%, which allows sufficient flexibility for growth initiatives and potential dividend enhancements in the future.
Overall, analysts have deemed MU stock a “Strong Buy,” with a mean target price of $125.53, which indicates an upside potential of about 12.4% from current levels. Out of 28 analysts covering the stock, 24 have a “Strong Buy” rating, two have a “Moderate Buy” rating, one has a “Hold” rating, and the remaining one has a “Moderate Sell.”
Dividend Stock #4: Enbridge
Based in Calgary, Canada, Enbridge Inc (ENB) is a leading energy infrastructure company with operations across North America. It transports liquid hydrocarbons and natural gas (NGM24), operates renewable power assets, and offers energy services to customers in Canada and the U.S.
Valued at $75.7 billion by market cap, shares of ENB have surged by about 8% over the past six months.
Enbridge boasts a record of paying dividends to shareholders for nine consecutive years. Recently, the company increased its quarterly dividend by 3.1% to $0.678 per common share, payable to its shareholders on June 1. It offers an annualized dividend of $2.64 per share, resulting in a dividend yield of 7.43%.
Enbridge stock has a consensus "Moderate Buy" rating. Out of 17 analysts covering ENB, seven recommend a "Strong Buy," two give a "Moderate Buy," six advise a "Hold" rating, and two give a "Strong Sell" Rating. The mean price target is $39.03, representing a potential upside of 7.7% from current levels.
Dividend Stock #5: Brookfield Asset Management
Brookfield Asset Management Ltd (BAM), based in Toronto, Canada, is a top-tier real estate investment firm with a diverse portfolio spanning renewable power, infrastructure, private equity, real estate, credit, and insurance solutions. Its market cap currently stands at about $15.7 billion.
Shares of Brookfield have gained 23.5% over the past six months, surpassing the SPX’s 16.5% gains.
On March 28, the company paid a quarterly dividend of $0.38 per share, a 19% increase. It offers an annualized dividend of $1.34 per share, resulting in a dividend yield of 3.51%. Also, the company maintains a healthy dividend payout ratio of 24.2%
Analysts have a consensus rating of “Moderate Buy” for BAM stock, with a mean target price of $44.10. This indicates an upside potential of roughly 14.5% from current levels. Out of nine analysts covering the stock, five have a “Strong Buy” rating, one has a “Moderate Buy" rating, two have a “Hold” rating, and one has a “Moderate Sell” rating.
