In this article, we discuss some of the best stocks for steady dividends.
Generating income has consistently been a primary goal for investors. To achieve this, they often opt for investments that provide steady and reliable returns over time. Dividend stocks are particularly popular in this regard, as they are well-regarded for offering regular income. Although using cash payouts from a stock portfolio is a popular approach among individuals nearing retirement, building an equity income portfolio is an option available to anyone. Over the years, dividends have significantly enhanced investors’ overall returns, making these stocks a compelling choice for income-focused portfolios. In certain periods, especially when equity returns fell below 10%, dividends have accounted for more than half of the total returns of major market indices, according to LSEG data.
Investors are increasingly emphasizing the quality of a company’s earnings. Examining factors such as dividends per share, dividend growth, and the stability of dividend payments can provide valuable insights into a company’s financial stability. Those who prioritize businesses with lower debt levels and higher profitability often target well-established, financially robust firms with greater flexibility. These high-quality companies typically demonstrate stronger resilience during market downturns and are more likely to sustain earnings growth across different market conditions.
Also read: 8 Best Dividend Leaders to Buy According to Wall Street Analysts
According to a report by BlackRock, historically, stocks that consistently grew or maintained their dividends have delivered better performance compared to those that either did not pay dividends or reduced their payouts. During market downturns, dividend-paying stocks often provide a buffer against the volatility of share prices. Companies that issue dividends typically strive to maintain these payments and are generally reluctant to reduce them unless absolutely unavoidable.
When investing in dividend stocks, investors often evaluate the dividend yield. Experts recommend focusing on yields within the 3% to 6% range, as higher yields may indicate potential yield traps. Brian Bollinger, president of Simply Safe Dividends, has also emphasized this point. Here are some comments from the analyst:
“I generally like to advocate for an approach of targeting great businesses that might pay closer to a 3% to 4% dividend yield.”
He further mentioned that these companies tend to gradually increase their payouts, which can enhance annual income streams and help counter the impact of inflation. Regarding companies with lower yields, he noted that they are often associated with more secure businesses and more reliable dividend payments. For example, the Dividend Aristocrat Index, which monitors companies with at least 25 years of consistent dividend growth, has an indicated yield of 2.28%. According to Bollinger, many of the firms in this index are well-established and financially stable. He suggested that creating a diversified portfolio of these companies can provide reassurance, as it builds a solid foundation for a growing stream of passive income, regardless of market fluctuations. He further said:
“When stock prices fall, it’s so easy to panic, but dividend investing can overcome that because you’re just trying to stay focused on your income stream. You don’t care so much about the markets’ short-term ups and downs anymore.”
As a result, investors often include dividend stocks in their portfolios. In this article, we will take a look at some of the best dividend stocks with steady income.
Photo by Dan Dennis on Unsplash
Our Methodology:
For this list, we first filtered dividend stocks that have shown at least 10 consecutive years of dividend growth. From this group, we selected those with dividend yields above 1.5% as of December 20. Lastly, we chose 10 companies that have achieved a share price return of over 30% over the past five years. The stocks are ranked in ascending order of their dividend yields as of December 20. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
10. Tractor Supply Company (NASDAQ:TSCO)
Dividend Yield as of December 20: 1.67%
5-Year Share Price Return: 189.6%
Tractor Supply Company (NASDAQ:TSCO) is an American farm supplies company that sells home improvement and related equipment and supplies. The company sells a significant amount of animal feed and large farming equipment, products that are unlikely to be overtaken by e-commerce due to their size and weight. With almost 2,300 locations, the company is the leading chain in its market. Although other major retailers might carry similar items, Tractor Supply’s stores are primarily located in rural areas where these products are in high demand. In contrast, larger retailers typically focus on opening stores in more densely populated regions. In the past five years, the stock has surged by nearly 190%.
In the third quarter of 2024, Tractor Supply Company (NASDAQ:TSCO) reported revenue of $3.47 billion, up 1.6% from the same period last year. This growth was driven by new store openings. The company’s business fundamentals remained solid, with continuous gains in market share. Nearly half of its stores have adopted the Project Fusion layout, and with over 550 garden centers, the company continues to invest in its stores, supply chain, and capabilities to enhance customer loyalty and set a higher standard for the industry.
In addition, Tractor Supply Company (NASDAQ:TSCO) reported a strong cash position. In the first nine months of 2024, the company generated an operating cash flow of over $903.6 million. It ended the quarter with over $186 million available in cash and cash equivalents. Moreover, it returned approximately $118 million to shareholders through dividends in Q3, which shows that TSCO is one of the best stocks for steady dividends.
On November 7, Tractor Supply Company (NASDAQ:TSCO) declared a quarterly dividend of $1.10 per share, which was in line with its previous dividend. The company holds a 15-year streak of consistent dividend growth. The stock has a dividend yield of 1.67%, as of December 20.
At the end of Q3 2024, 29 hedge funds tracked by Insider Monkey held stakes in Tractor Supply Company (NASDAQ:TSCO), compared with 35 in the previous quarter. These stakes have a consolidated value of over $786 million. With over 7.5 million shares, Select Equity Group was the company’s leading stakeholder in Q3.
9. Colgate-Palmolive Company (NYSE:CL)
Dividend Yield as of December 20: 2.17%
5-Year Share Price Return: 33.8%
Colgate-Palmolive Company (NYSE:CL) is a New York-based manufacturing company that mainly specializes in a wide range of consumer products. The company is a well-known brand in the consumer goods sector, offering products in Oral Care, Personal Care, Home Care, and Pet Nutrition. Recently, it has placed significant emphasis on sustainability and expanding its product range. Its goal to make all packaging recyclable by 2025 reflects the growing environmental awareness among consumers and regulators. Through initiatives like renewable energy partnerships, Colgate is aligning its operations with future market demands and regulatory requirements. In the past five years, the stock has surged by nearly 34%.
In the third quarter of 2024, Colgate-Palmolive Company (NYSE:CL) posted revenue of $5.03 billion, which showed a 2.4% growth from the same period last year. The revenue also beat analysts’ estimates by $27.2 million. The company has maintained its leadership in the toothpaste market, holding a global market share of 41.6% year to date. It has also remained a leader in the manual toothbrush segment, with a global market share of 32.3% for the same period.
In addition, Colgate-Palmolive Company (NYSE:CL) has achieved its sixth consecutive quarter of gross margin expansion, alongside growth in operating profit, net income, and earnings per share. Advertising spending rose by 16% during the quarter, driven by science-led innovations in both core and premium products across various price ranges. The company’s strong performance this quarter and year to date has bolstered its confidence that the right strategies are being executed to meet the updated 2024 expectations for organic sales growth and Base Business earnings. These efforts are also aimed at driving cash flow and generating consistent, compounded earnings per share growth.
In the first nine months of the year, Colgate-Palmolive Company (NYSE:CL) reported an operating cash flow of nearly $3 billion. The company declared a quarterly dividend of $0.50 per share on December 11, which remained unchanged from the previous dividend. Overall, it has raised its payouts for 62 consecutive years, which makes CL one of the best stocks with steady dividends. The stock’s dividend yield on December 20 came in at 2.17%.
As of the close of Q3 2024, 54 hedge funds tracked by Insider Monkey reported having stakes in Colgate-Palmolive Company (NYSE:CL), up from 52 in the previous quarter. These stakes have a collective value of over $3.4 billion. Among these hedge funds, GQG Partners was the company’s leading stakeholder in Q3.
8. QUALCOMM Incorporated (NASDAQ:QCOM)
Dividend Yield as of December 20: 2.24%
5-Year Share Price Return: 70.9%
QUALCOMM Incorporated (NASDAQ:QCOM) is a California-best semiconductor company that also offers services in wireless technology. The company has established a solid presence in the smartphone chip industry and stands to gain from the rapidly expanding generative AI smartphone market. IDC projects this segment to grow at an annual rate of 78% through 2028, with yearly shipments anticipated to reach 912 million units by the end of the forecast period. In addition, the company ranks as the second-largest player in the smartphone application processor market, holding a 31% market share, according to Counterpoint Research. The stock has surged by nearly 71% in the past five years.
In fiscal Q4 2024, QUALCOMM Incorporated (NASDAQ:QCOM) delivered robust earnings, reporting revenues of $10.24 billion, an 18% increase compared to the same quarter last year. Net income saw a year-over-year rise of 33%, reaching $3.5 billion. Moreover, the company achieved annual earnings per share growth of over 30% for fiscal 2024.
Madison Investments highlighted QCOM in its Q3 2024 investor letter. Here is what the firm has to say:
“Alphabet Inc., Eli Lilly and Company, QUALCOMM Incorporated (NASDAQ:QCOM), Microsoft Corporation, and Apple Inc. were the largest detractors. Qualcomm has given back some of its first half gains after the CFO commented at a conference that its entrance into the AI PC business would take time to ramp. We continue to see Qualcomm as well positioned with growth from AI moving into the mobile phone, from new opportunities in the Internet of Things (IoT), and within the Auto industry but will also look to future growth as they enter the PC market.”
QUALCOMM Incorporated (NASDAQ:QCOM) maintains a strong cash position to sustain its dividend payments. By the end of the quarter, the company held $8 billion in cash and cash equivalents. Its operating cash flow increased to $12.2 billion, up from $11.3 billion in the same period last year. During the quarter, QUALCOMM returned $2.2 billion to shareholders through dividends and share buybacks. It is one of the best stocks for steady income as the company has raised its payouts for 20 consecutive years. The company offers a quarterly dividend of $0.85 per share and has a dividend yield of 2.24%, as recorded on December 20.
QUALCOMM Incorporated (NASDAQ:QCOM) was included in 74 hedge fund portfolios at the end of Q3 2024, as per Insider Monkey’s database. The stakes held by these funds have a consolidated value of more than $3.23 billion. With over 2 million shares, Two Sigma Advisors was the company’s leading stakeholder in Q3.
7. The Home Depot, Inc. (NYSE:HD)
Dividend Yield as of December 20: 2.32%
5-Year Share Price Return: 75.2%
The Home Depot, Inc. (NYSE:HD) ranks seventh on our list of the best stocks with steady dividends. The American multinational home improvement retail company sells appliances, tools, construction equipment, and related products. In the third quarter of 2024, the company reported $40.22 billion in revenue, reflecting a 6.6% increase compared to the same quarter the previous year. The company recorded an operating income of $5.4 billion with an operating margin of 13.5%. Growth was supported by stronger customer interest in seasonal items and outdoor projects, as well as increased sales driven by hurricane-related demand.
This year, The Home Depot, Inc. (NYSE:HD) encountered difficulties stemming from growing macroeconomic uncertainty, which weakened consumer demand and resulted in lower spending on home improvement projects. In the most recent quarter, same-store sales dropped by 1.3% compared to the previous year—an unfavorable result for a retail-driven business. Management expects this declining trend to continue through the rest of the fiscal year. That said, the stock has surged by over 13.5% since the start of 2024.
This was also highlighted by Carillon Tower Advisers in its Q3 2024 investor letter. Here is what the firm has to say:
“While Home Depot, Inc.’s (NYSE:HD) recent reported earnings were somewhat tepid, the market seems to be pricing in an inversion of the company’s sales, driven by lower interest rates. Home Depot reported its seventh consecutive quarter of same-store sales declines, giving back substantial gains that it enjoyed during the pandemic. High mortgage rates have also put a damper on existing home sales. People typically spend the most on home repairs and improvements in years when they buy or sell houses, often conducting both transactions in the same year.”
During the first nine months of the year, The Home Depot, Inc. (NYSE:HD) generated more than $15 billion in operating cash flow. This solid financial position enables the company to maintain its status as a generous dividend payer. The company has been rewarding shareholders with growing payouts for the past 14 consecutive years. It currently offers a quarterly dividend of $2.25 per share and has a dividend yield of 2.32%, as of December 20.
Insider Monkey’s database of Q3 2024 indicated that 82 hedge funds held stakes in The Home Depot, Inc. (NYSE:HD), compared with 86 in the previous quarter. These stakes are collectively valued at nearly $7.6 billion.
6. The Procter & Gamble Company (NYSE:PG)
Dividend Yield as of December 20: 2.40%
5-Year Share Price Return: 34.05%
The Procter & Gamble Company (NYSE:PG) is an Ohio-based multinational consumer goods company that specializes in a wide range of related products and services. The stock has delivered an outstanding performance this year, reaching a record high of over $179 per share in December. This achievement is primarily due to its strong operational execution. It has consistently delivered robust results, even amid inflationary pressures, by successfully implementing substantial price increases. Notably, in fiscal 2023, the company achieved organic sales growth every quarter. The stock is up by over 14% since the start of 2024 and has delivered a 34% return in the past five years.
In the first quarter of fiscal 2025, The Procter & Gamble Company (NYSE:PG) posted $21.7 billion in revenue, reflecting a 1% decline from the previous year. Operating cash flow for the quarter reached $4.3 billion, with adjusted free cash flow productivity at 82%, aligning with expectations. The company continued to deliver value to shareholders, returning $4.4 billion through dividends and share repurchases.
The Procter & Gamble Company (NYSE:PG) has issued an optimistic forecast for fiscal 2025, anticipating sales growth of 2% to 4% and a 10% to 12% increase in diluted net EPS compared to $6.02 in fiscal 2024. If it achieves the midpoint of this range, the company will set a new record with a diluted EPS of $6.68 for fiscal 2025.
The company boasts a strong history of shareholder returns, consistently paying dividends for 134 years. In addition, it has maintained 68 consecutive years of dividend growth, making it one of the best stocks with steady dividends. The company currently pays a quarterly dividend of $1.0065 per share and has a dividend yield of 2.40%, as of December 20.
The number of hedge funds tracked by Insider Monkey holding stakes in The Procter & Gamble Company (NYSE:PG) grew to 68 in Q3 2024, from 64 in the previous quarter. These stakes have a total value of more than $8.8 billion. Ken Fisher’s Fisher Asset Management was the company’s leading stakeholder in Q3.
5. Texas Instruments Incorporated (NASDAQ:TXN)
Dividend Yield as of December 20: 2.93%
5-Year Share Price Return: 43.94%
Texas Instruments Incorporated (NASDAQ:TXN) is an American multinational semiconductor company that produces analog and embedded chips. In the third quarter of 2024, the company reported revenue exceeding $4.1 billion, down from $4.5 billion during the same period the previous year. The company posted an operating profit of over $1.55 billion and a net income of $1.36 billion. Its financial position remained robust, with an operating cash flow of $6.2 billion over the trailing 12 months, showcasing the strength of its business model, high-quality product portfolio, and benefits from 300mm production. During the same period, free cash flow totaled $1.5 billion. Over the past year, Texas Instruments allocated $3.7 billion to R&D and SG&A, spent $4.8 billion on capital investments, and returned $5.2 billion to shareholders.
The London Company mentioned TXN in its Q2 2024 investor letter. Here is what the firm has to say:
“Texas Instruments Incorporated (NASDAQ:TXN) – TXN rallied in 2Q despite declining revenue in its latest update. TXN is beginning to see some encouraging signs of destocking nearing an end and some sub segments of the market are experiencing improving demand. TXN continued to spend on capex and should begin to see positive benefits to cash flow next year from the CHIPS Act.”
Texas Instruments Incorporated (NASDAQ:TXN) is one of the best stocks with steady dividends as the company boasts an impressive track record of dividend growth, increasing its payouts for 21 consecutive years. Over this time, the company has achieved a compound annual growth rate (CAGR) of 24% in its dividend distributions. It currently pays a quarterly dividend of $1.36 per share for a dividend yield of 2.93%, as of December 20.
Texas Instruments Incorporated (NASDAQ:TXN) remained popular among elite funds at the end of Q3 2024, with hedge fund positions growing to 57, from 50 in the previous quarter, according to Insider Monkey’s database. The collective value of stakes owned by these funds is roughly $3 billion.
4. AbbVie Inc. (NYSE:ABBV)
Dividend Yield as of December 20: 3.76%
5-Year Share Price Return: 95.8%
An American pharmaceutical and biotech company, AbbVie Inc. (NYSE:ABBV) ranks fourth on our list of the best stocks with steady dividends. The company has consistently raised its payouts for 52 years. Currently, it offers a quarterly dividend of $1.64 per share and has a dividend yield of 3.76%, as of December 20.
Over the past 12 months, AbbVie Inc. (NYSE:ABBV) has risen by more than 16%, highlighting investor confidence in the company’s management of Humira’s patent expiration. Once a top-selling drug with peak sales of $21 billion in 2022, Humira faced a significant revenue decline following the loss of its patent protection last year. Despite this, AbbVie’s leadership effectively mitigated the impact, compensating for the drop in sales from a drug that previously accounted for roughly one-third of the company’s total revenue.
In the third quarter of 2024, AbbVie Inc. (NYSE:ABBV) posted revenue of $14.46 billion, marking a 4% increase compared to the same period the previous year. Its Immunology Portfolio contributed over $7 billion in revenue, also reflecting 4% year-over-year growth. In August, the company completed an $8.7 billion cash acquisition of Cerevel Therapeutics, a pharmaceutical company focused on neuroscience. This deal added a strong pipeline of drug candidates, including emraclidine, a potential treatment for schizophrenia.
At the end of the third quarter of 2024, AbbVie Inc. (NYSE:ABBV) was a part of 68 hedge fund portfolios, up from 67 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these funds have a consolidated value of over $2.58 billion. Cliff Asness’ AQR Capital Management was the company’s leading stakeholder in Q3.
3. Manulife Financial Corporation (NYSE:MFC)
Dividend Yield as of December 20: 3.79%
5-Year Share Price Return: 50.65%
Manulife Financial Corporation (NYSE:MFC) is a Canadian multinational insurance company that also offers a wide range of other financial services to its consumers. Despite global economic uncertainties, the company delivered a strong financial performance in 2024, driven by robust growth in new business and impressive results from its global wealth management segment, especially in Asia. The company’s solid stock performance this year may be attributed to its strategic emphasis on digital innovation and its expansion into high-growth markets. In Asia, Manulife has been actively broadening its product offerings and enhancing digital services to meet the needs of its expanding customer base. Recent initiatives include the launch of digital tools and mobile apps across major markets such as Vietnam, Indonesia, and the Philippines.
In the third quarter of 2024, Manulife Financial Corporation (NYSE:MFC) reported core earnings of $1.8 billion, which showed a 4% growth from the same period last year. Year-to-date, the company generated 70% of its core earnings from its highest-potential businesses, contributing to a 14% increase in core EPS, excluding the impact of GMT. A core ROE of 16.6% highlighted strong operational performance and disciplined capital allocation. The company maintained a focus on expense management, achieving an expense efficiency ratio of 45.0% year-to-date, aligning with its medium-term goal of remaining below 45%.
In addition to this, Manulife Financial Corporation (NYSE:MFC) remained committed to its shareholder obligation, returning over $2 billion to shareholders since the start of 2024. The company has a strong dividend history. It has raised its payouts for 11 consecutive years, which makes MFC one of the best stocks with steady dividends. The company offers a quarterly dividend of C$0.40 per share and has a dividend yield of 3.79%, as of December 20.
As per Insider Monkey’s database of Q3 2024, 22 hedge funds held stakes in Manulife Financial Corporation (NYSE:MFC), the same as in the previous quarter. These stakes are collectively valued at more than $395 million.
2. CubeSmart (NYSE:CUBE)
Dividend Yield as of December 20: 4.83%
5-Year Share Price Return: 35.88%
CubeSmart (NYSE:CUBE) is an American real estate investment trust company that mainly invests in self-storage facilities in the US. In the third quarter of 2024, the company reported revenues of nearly $271 million in Q3 2024, reflecting a 1.1% increase compared to the same period last year and surpassing analysts’ expectations by $1.40 million. During the quarter, the company added 24 stores to its third-party management platform, raising the total number of managed locations to 893. CubeSmart also has agreements with developers to build self-storage facilities in areas with high entry barriers. As of September 30, 2024, the company was constructing two joint venture development properties, with a total projected investment of $36.9 million, of which $9.1 million had already been spent. Both properties, located in New York, are slated to open in Q3 2025.
In Q3, CubeSmart (NYSE:CUBE) continued to adapt to a competitive market for new customer rental rates, while maintaining strong retention among existing customers. It is under contract to acquire two properties—one in Oregon and another in Pennsylvania—for a combined purchase price of approximately $22.0 million. These acquisitions are anticipated to be finalized in Q4 2024. With a 5-year return of nearly 36%, CUBE is one of the best stocks with steady dividends.
Diamond Hill Capital also highlighted this in its Q3 2024 investor letter. Here is what the firm has to say:
“On an individual holdings basis, top contributors to return in Q3 included Regal Rexnord, NVR and CubeSmart (NYSE:CUBE). Similarly, shares of self-storage real estate investment trust (REIT) CubeSmart benefited from the broad tailwind of lower interest rates. The company continues delivering solid operating results, even in a slower real estate environment.”
On December 16, CubeSmart (NYSE:CUBE) declared a 2% hike in its quarterly dividend to $0.52 per share. Through this increase, the company stretched its dividend growth streak to 16 years. The stock supports a dividend yield of 4.83%, as of December 20.
Insider Monkey’s database of Q3 2024 showed that 26 hedge funds, up from 23 in the previous quarter, held stakes in CubeSmart (NYSE:CUBE). These stakes have a consolidated value of over $217.6 million.
1. Energy Transfer LP (NYSE:ET)
Dividend Yield as of December 20: 6.90%
5-Year Share Price Return: 43.11%
Energy Transfer LP (NYSE:ET) is a Texas-based energy company that is engaged in the pipeline transportation and storage for natural gas, crude oil, and other refined products. The company has delivered impressive operational and financial performance this year, achieving several volume records in Q3, driven by organic growth initiatives and strategic acquisitions. Last November, the company acquired Crestwood Equity Partners in a $7.1 billion transaction, followed by the completion of its $3.1 billion acquisition of WTG Midstream in July. Moreover, it finalized two processing optimization projects: the Red Lake III processing plant and the pipeline connection between Midland and Cushing.
Energy Transfer LP (NYSE:ET) plans to allocate $2.8 billion to $3 billion toward growth capital projects in 2024. Among its new initiatives this year, is the approval of its ninth natural gas liquids fractionator, expected to become operational in 2026. The company has multiple projects set to begin commercial service within the next two years, offering greater clarity on its future growth trajectory.
Energy Transfer LP (NYSE:ET) also reported a strong cash position in its latest quarter. Distributable cash flow (DCF) to partners, which represents the cash the company generates before capital expenditures for growth projects, increased by $4 million to reach $1.99 billion. Volumes across its systems were strong, with several volume records set during the quarter. On October 28, the company declared a 0.8% hike in its quarterly dividend to $0.3225 per share. This was the company’s 12th consecutive quarterly dividend increase. With a dividend yield of 6.9%, ET is one of the best stocks with steady dividends.
With a collective stake value of over $965.5 million, 29 hedge funds tracked by Insider Monkey held positions in Energy Transfer LP (NYSE:ET) at the end of Q3 2024.
Overall, Energy Transfer LP (NYSE:ET) ranks first on our list of the best stocks with steady dividends. While we acknowledge the potential for ET to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ET but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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