Stocks to buy

The 3 Best Dividend Stocks to Invest In for Big Gains in 2024

Dividends continue to be highly prized by investors. Consistent and reliable dividend payments can help grow a portfolio when reinvested, and the passive income stream can be a big help to retirees and people living on fixed incomes. For these reasons, many investors seek out stocks of companies that prioritize paying and growing their dividends. However, growing dividend payments are rarer than one might think. Only 68 companies listed on the benchmark S&P 500 index have grown their dividend payment for 25 consecutive years or longer. And when times get tough, many companies reduce or eliminate their dividend. This was the case in January of this year when struggling pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA) cut its dividend by nearly 50%. Here are the three best dividend stocks for big gains in 2024.

Walmart (WMT)

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Discount retailer Walmart (NYSE:WMT) paid its first dividend to shareholders in 1974 and has increased the payout yearly. Walmart is a member of the exclusive club known as “Dividend Aristocrats,” companies that have increased their payment to shareholders for 25 consecutive years or longer. If Walmart raises its dividend in 2024, it will become a “Dividend King,” having lifted the payout for 50 years in a row. WMT stock pays a quarterly dividend of 57 cents a share for a yield of 1.37%.

Beyond the dividend, now is a great time to buy WMT stock after Walmart announced a three-for-one stock split. In part, Walmart said it is splitting the stock to allow employees to buy into its stock purchase plan. News of the split comes with Walmart’s stock trading near an all-time high. The additional shares will be payable to stockholders of record on Feb. 22. This is Walmart’s first stock split since 1999. WMT stock has gained 16% over the last 12 months.

Dell Technologies (DELL)

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While it’s not yet a Dividend Aristocrat, personal computer (PC) maker Dell Technologies (NYSE:DELL) is prioritizing its dividend payments to shareholders. Last October, the company pledged to increase its dividend payment to stockholders by 10% a year through 2028. DELL stock currently pays a quarterly dividend of 37 cents a share, yielding 1.79%. Since most technology companies pay no dividend, Dell’s distribution stands out.

The company expects to return at least 80% of its free cash flow to shareholders through stock buybacks and dividends over the next five years, up from a previous commitment to return 50% to 60% of free cash flow. To that end, Dell also increased its stock buyback program by $5 billion. The dividend increases should be sustainable as Dell executives foresee upcoming catalysts for the company’s personal computer business from the emergence of artificial intelligence (AI) software.

DELL stock has gained 104% over the last 12 months.

Mastercard (MA)

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In December, credit card giant Mastercard (NYSE:MA) increased its quarterly dividend payment to shareholders by 16% and announced a new stock buyback program. The company said it was immediately raising its quarterly dividend to 66 cents a share from 57 cents previously, giving it a yield of 0.59%. Mastercard has been paying quarterly dividends to its stockholders since November 2006 and has prioritized consistently increasing the payout as its earnings have grown.

Mastercard has grown its dividend payout in the last decade by a compound annual growth rate of 34%, or by more than 1,500% over the past 10 years. While the dividend yield might seem small, that reflects Mastercard’s stock price, which is currently at nearly $450. Last December, the company also announced an $11 billion share repurchase program, which will begin once its current $9 billion plan expires later in 2024. MA stock has risen 20% in the last 12 months.

On the date of publication, Joel Baglole did not have (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.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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