The stock market has been performing well this year, with benchmark indices rising over 9%. Despite this positive trend, high valuations have raised concerns about a potential market correction. The S&P 500’s price-to-earnings (P/E) ratio is currently around 27, indicating that the market may be overvalued and due for a pullback.
In such conditions, some investors prefer to focus on reliable dividend stocks as a more defensive play. These stocks offer a steady source of income and can help weather short-term market fluctuations. Finding reliable dividend stocks involves looking for companies that have a track record of consistently raising dividends.
Over the past five years, more than 50 US companies have raised dividends annually. However, there are some reliable dividend stocks that have been increasing dividends for much longer. These long-established dividend payers have recently raised payouts, making them attractive options for investors seeking steady returns.
One such reliable dividend stock is Johnson & Johnson (JNJ), a leading healthcare company that has increased dividends for 61 consecutive years. Last year, the company raised its dividend by 4.2% and currently offers a solid forward yield of 3.3%. With a payout ratio of 64%, Johnson & Johnson provides investors with a reliable return.
Another reliable dividend stock is PepsiCo (PEP), a consumer staples company that has managed steady growth despite high inflation. The company has a tradition of raising dividends for 51 years and recently increased its dividend by 7%. With a forward dividend yield of 3.04%, PepsiCo remains a strong contender for investors looking for reliable dividend stocks.
Southern Company (SOLN), a utility company, is also a reliable dividend stock that consistently provides stable dividend payments. While not classified as a ‘dividend king,’ Southern Company has raised dividend payments yearly since its establishment in 2001. The company recently increased its dividend by 2.9% to $2.88 per share annually, offering a yield of 3.8%.
Overall, reliable dividend stocks like Johnson & Johnson, PepsiCo, and Southern Company provide investors with a source of steady income and can help navigate market uncertainties. By focusing on companies with a history of increasing dividends, investors can build a resilient portfolio for the long term.