You heard it here: 2024 could be an excellent year for stocks. The economy is improving, and specifically the third-quarter results were better than expected. This means we could see a significant upside in stocks in the coming months.
However, if you are looking to make a steady income in 2024, it is advisable to invest in dividend stocks. Look for stocks that show capital appreciation and continue to generate steady income for you in the coming years. You’ll need to identify companies that have a strong balance sheet, solid history, and consistent dividend payouts.
With that in mind, let’s take a look at the three dividend stocks to buy before the end of this year. These companies will never disappoint.
Johnson & Johnson (JNJ)
One of the most attractive dividend-paying companies in the pharmaceutical space is Johnson & Johnson (NYSE:JNJ). The company has been around for a long time now, becoming a household name due to its global presence.
In fact, JNJ has shown consecutive dividend increases for the past 61 years. This shows the company’s commitment to rewarding the shareholders and sharing the profits. The company has a few stalwarts in its portfolio which helps generate income year after year. It has a range of medical devices and pharmaceutical products that help the company grow.
Lately, the company is thriving after the spinoff of the consumer wellness business, Kenvue (NYSE:KVUE). This shift has allowed the company to focus on the medical devices segment which will ensure steady revenue growth.
Additionally, management expects 25 new drugs to drive growth between 2025 to 2030. It has over 10 drugs that can drive at least $5 billion in sales and another 15 products that can drive at least $1 billion.
Fundamentally, the company hasn’t failed to impress investors. It reported a 6.8% growth to hit $21.4 billion, and the EPS increased 4.3% to $1.69. The company saw over a 4% growth in Innovative Medicine and a 6% growth in Medtech sales.
It has several products under different trial phases which means there is a lot more to come. With a dividend yield of 3.11%, and a 6% growth in dividends, it surpasses the industry median.
The stock is exchanging hands for $153 and has lost 13% of its value year to date. JNJ stock is still trading lower than the 52-week high of $180, which means there is ample upside potential from here.
The company is set to announce results on Jan. 23, and we could see the stock pick up pace. This dip is a good chance to add the dividend stock to your portfolio.
PepsiCo (PEP)
Another household name, the dividend stock PepsiCo (NASDAQ:PEP) is a great addition to your portfolio. The company has a diversified range of products, going beyond the beverage market. It has several snacking brands which include Quaker Foods and Frito-Lay which are also gaining market share.
As people transition towards healthier food options, PepsiCo continues to thrive. The company has been in existence for a long time now, proving itself a winner time and time again. In the recent quarter, it reported an organic revenue growth of 8.8%, beating estimates.
Its revenue came in over $23 billion, and the EPS stood at $2.25. Let’s not forget that the company has achieved this growth even with high inflation. Impressively, the company did resort to price hikes but still managed to report growth.
To be fair, it still plans modest price hikes in 2024. I believe it wouldn’t hurt the business. Because of it’s global presence, I think that it will see steady growth in other segments even if there is a moderate decline in sales for one geographical area.
With a yield of 3.05%, PEP remains one of the top dividend stocks to buy with a yield of 3.05%. It has raised the dividend payments for over 25 consecutive years, and with its impressive growth trajectory, it will continue delivering value to shareholders in the future.
To me, PEP stock looks undervalued given its diverse portfolio that ensures consistent growth. The company also has pricing power and can benefit no matter the market situation. Trading at $165 today, the stock is down 7% year to date, and this discount is a chance to load up on this stock.
McDonald’s (MCD)
One of the best dividend stocks to buy before the end of this year is McDonald’s (NYSE:MCD). Besides its delicious burgers, the company has strong fundamentals and it still has a lot to achieve. It reported a 14% rise in comparable sales and reported a revenue of $6.69 billion in the quarter.
The company has a successful franchise business model which helps keep the operating costs low while generating income. Out of the 40,000 store locations, the company only operates 2,000 and the rest are franchises. And the company isn’t done growing. In fact, McDonald’s aims to increase its restaurant count from 40,000 today to 50,000 by 2027.
This means it generates income from the business while its expenses are minimal. With inflation cooling and the holiday season approaching, McDonald’s could report even better fourth-quarter numbers.
Recently, an HSBC analyst initiated coverage for the stock with a buy rating and a price target of $317, about a 9% upside. The analyst expects the earning growth from 2022 to 2025 to be higher than average from 2016 to 2019. Besides the earnings growth, the analyst also expects to see a higher operating margin as well as free cash flow growth in the period.
Trading at $288 today, the stock is nearing the 52-week high of $299, up 9% year to date. I believe it will move over $300 in 2024. It has a dividend yield of 2.31% and has paid a quarterly dividend of $1.67. This is one stock that will continue giving throughout 2024.
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.com Publishing Guidelines.
