Dividend Dynamos- 7 Stocks Delivering Consistent Cash Flow This Year (2024)

Who doesn't enjoy passive income? Here are my top picks to make money throughout the year without working for it

Investing in the stock market isn’t without the risks, but what if you could generate extra income from your investment? If you are a risk-averse investor like me and want to build a retirement portfolio, dividend stocks with consistent cash flow will appeal to you. You can achieve your goal of generating consistent income while you enjoy capital appreciation.

If you invest in the right stocks, you can also cover expenses throughout the year. With the ongoing earnings season, several companies will hike their dividend payouts, rewarding shareholders for being a part of their journey. But the trick is to identify the dividend stocks that are better than the others. While the dividend yield can help you choose, it is best to look for stability and consistency when investing. Here are the seven dividend stocks that can deliver steady cash flow throughout 2024.

Dividend stocks with consistent cash flow: 3M (MMM)

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3M(NYSE:MMM) is a highly diversified industrial giant that caters to several industries. The company has recently started paying for the earplugs lawsuit settlement, but this hasn’t had an impact on the business. In thefourth quarter results, the company beat analyst expectations and reported GAAP earnings per share of $1.70, and the net sales stood at $8 billion.

Its adjusted free cash flow rose by 18% year-over-year and is at $2 billion. MMM stock enjoys a dividend yield of 6.25% and pays an annual dividend of $6 for a stock trading at $95. The company has paid dividends for more than 100 years, and it has enough liquidity to keep going.

3M is a resilient stock that can thrive in any market situation due to its strong presence in multiple segments. It has a dividend payout of 66% which is one of the best in the industry today.

Johnson & Johnson (JNJ)

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After the spin-off of the consumer products segments, Johnson & Johnson(NYSE:JNJ) is rising high in the med tech and innovative medicine segment. This is one stock to buy and hold forever. The company has paid dividends for the past 61 years and has enough cash to keep growing it.

Johnson & Johnson has a wide range of products under its umbrella and it has recently reported impressivefourth-quarter results. The revenue came in at $21.4, up 7%, and the EPS came in at $1.70, up 39% year over year. It saw a full-year revenue of $85.2 billion and expects sales growth of 5% to 6% in 2024.

With a dividend yield of 2.98% and an annual dividend of $4.76, JNJ stock is one of the best pharmaceutical stocks to own. It is trading for $159 and has a payout ratio of 35% which means there is a lot of space to grow in the coming years.

PepsiCo (PEP)

The global conglomerate PepsiCo(NASDAQ:PEP) is a food and snack giant that has become a household name today. When several businesses were grappling with high inflation and low consumer spending, PepsiCo reported an 8.8% organic growth in the third quarter despite price hikes.

This shows the power it has in the industry. PepsiCo has a diversified range of products that shield it from the market’s ups and downs. Its operating profit in the third quarter was higher than 20%, and it is expecting steady growth in 2024.

The company believes in rewarding shareholders and has a dividend yield of 3.04% with an annual payout of $5.08. It is one of the most stable stocks to own since the demand for Pepsi’s products will not see a drop, and even if it does, the company has a global presence which protects it from extreme volatility. PEP stock is trading for $166 today, down 3% year to date.

McDonald’s (MCD)

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One of the most recognized food chains in the world, McDonald’s(NYSE:MCD) is everywhere. The company has a global presence and it has steadily grown, irrespective of how the market moved. MCD brings stability to your portfolio, and it is enjoying solid growth. In thethird quarter, the company saw an 11% rise in sales to hit $6.69 billion.

The company is aiming for brand expansion and is working on enhancing customer experience. McDonald’s has a very profitable franchise business that works in its favor. It helps keep the operating costs low while generating steady revenue.

The company enjoys a dividend yield of 2.25% and pays an annual dividend of $6.68. MCD stock is trading at $297 and is going to soar past $300 very soon. While the stock is trading at an all-time high today, it has steadily grown over a foundation of strong earnings and market share expansion. This is one stock to buy and hold forever.

Dividend stocks with consistent cash flow: Coca-Cola (KO)

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Pepsi’s biggest rival, Coca-Cola(NYSE:KO) is a stock that keeps rewarding shareholders. The company holds a strong market share and offers a wide range of beverages including sports drinks and healthier drink options. It has a dividend yield of 3.11%, higher than that of Pepsi, and pays an annual dividend of $1.84.

KO stock is trading at $59 and is a strong buy at the current level. It reported an 8% annual revenue growth in the third quarter and has a net margin of 24%, giving it enough liquidity to keep raising dividends.

The company reported a revenue of $11.95 billion and aims to grow organic sales by 10% to 11% this year. It is a dividend aristocrat with a consistent 62-year payout hike. KO stock is trading at a discount right now and is one of the best buys today. Several analysts have recently increased the price target of KO stock.

Starbucks (SBUX)

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Starbucks(NASDAQ:SBUX) is a global business with a strong brand name. It is on an expansion spree and aims to open 55,000 locations by 2030. The company is targeting the most populous country in the world, India to achieve its expansion plans and will open two stores in the country every week.

The company has raised dividends for 14 years consecutively and is a highly reliable stock to own today. It enjoys a dividend yield of 2.46% and pays an annual dividend of $2.28 per share. Its third quarter results saw a 12% revenue growth and it opened over 500 stores in the quarter.

Trading below $100, at $92 today, the stock could rally after the upcoming results. SBUX is a highly undervalued stock that is set to benefit as the economy improves. The cultural icon has become a huge part of America’s economy and it is one of the best retail stocks to own.

Visa (V)

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A global fintech giant, Visa(NYSE:V) might have a lower dividend yield as compared to the other companies mentioned here, but it is a business that can thrive in 2024. The company caters to more than 100 million merchants and it makes money whenever a Visa card is used.

It reported stellarfirst-quarterresults, beating analyst expectations. Its revenue came in at $8.63 billion and the net income stood at $4.9 billion. The company saw an 8% rise in payment volume in the fourth quarter. For the next quarter, it expects the revenue to grow in the upper middle to high single-digit rate.

Visa has a dividend yield of 0.76% and pays an annual dividend of $2.08. V stock is trading at $272 and is at its 52-week high but it has immense potential to keep soaring. As we move towards digitization and adopt cashless payments, Visa will continue to see higher revenue and payment volume. This is one business that will always remain relevant and will keep generating income for you throughout the year.

On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

As an investment enthusiast with a deep understanding of the stock market and a keen eye for dividend stocks, I can attest to the importance of passive income and the value it adds to a well-rounded investment strategy. My expertise lies in identifying dividend stocks that not only provide consistent cash flow but also demonstrate stability and growth potential.

Now, let's delve into the concepts mentioned in the provided article:

  1. Passive Income and Dividend Stocks:

    • Passive income refers to earnings derived from investments with minimal effort or active involvement.
    • Dividend stocks are shares in companies that distribute a portion of their profits to shareholders in the form of dividends, providing a steady stream of income.
  2. Risk-Averse Investing:

    • The article emphasizes catering to risk-averse investors who seek to build a retirement portfolio.
  3. Dividend Yield:

    • Dividend yield is a financial ratio that represents the annual dividend income as a percentage of the stock's current market price.
    • Higher dividend yields can be attractive, but it's crucial to consider stability and consistency.
  4. Earnings Season:

    • Refers to the time when companies release their financial performance reports, often leading to stock price movements.
  5. Stock Picks for 2024:

    • 3M (MMM):

      • Diversified industrial giant with a resilient stock, paying a dividend of 6.25%.
    • Johnson & Johnson (JNJ):

      • Med tech and innovative medicine company with a dividend yield of 2.98%.
    • PepsiCo (PEP):

      • Global conglomerate in the food and snack industry, offering a dividend yield of 3.04%.
    • McDonald’s (MCD):

      • Recognized global fast-food chain with a dividend yield of 2.25%.
    • Coca-Cola (KO):

      • Beverage giant and Pepsi's rival with a dividend yield of 3.11%.
    • Starbucks (SBUX):

      • Global coffeehouse chain aiming for expansion, providing a dividend yield of 2.46%.
    • Visa (V):

      • Global fintech giant with a lower dividend yield of 0.76%, but with immense growth potential.
  6. Financial Metrics:

    • Metrics such as revenue, earnings per share (EPS), net sales, and operating profit are used to assess the financial health and performance of the mentioned companies.
  7. Dividend Payout Ratio:

    • The percentage of earnings a company pays out in dividends, indicating sustainability. Mentioned ratios include 66% for 3M and 35% for Johnson & Johnson.
  8. Market Presence and Global Expansion:

    • Companies like 3M, PepsiCo, and McDonald’s are highlighted for their strong market presence and global expansion plans.
  9. Undervalued Stocks:

    • Coca-Cola is mentioned as a dividend aristocrat and an undervalued stock trading at a discount.
  10. Digital Transformation:

    • Visa is positioned as a global fintech player benefiting from the trend towards digitization and cashless payments.

In conclusion, the article provides a comprehensive overview of dividend stocks, emphasizing stability, consistency, and growth potential, aligning with the preferences of risk-averse investors looking for passive income.

Dividend Dynamos- 7 Stocks Delivering Consistent Cash Flow This Year (2024)

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