While the stock market has been recovering since the pullback last year, market volatility remains high as geopolitical tensions persist. The recent crisis in the Middle East has sparked concerns regarding broader regional instability.
The weakening economy has caused investors to cause the November rally to halt, with the Dow Jones Industrial Average index declining marginally intraday on Tuesday. The National Retail Federation expects retail sales to grow at the slowest pace in the last five years this holiday season. Walmart Inc. CEO Doug McMillon predicts the U.S. economy will enter a deflationary period soon, with grocery and general merchandise prices falling.
As markets are expected to remain volatile, these blue-chip dividend stocks could be ideal investment bets.
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Johnson & Johnson
Johnson & Johnson (NYSE:JNJ), one the most popular healthcare merchandise sellers in the world, has delivered stable market performance over the years and is a reliable dividend-paying stock. Johnson & Johnson is often regarded as a defensive stock as it primarily sells consumer staple products around the globe.
Johnson & Johnson is regarded as a Dividend King because it has raised its dividend payouts for 60 consecutive years. To date, only 48 companies have achieved this milestone. The company pays $4.76 in dividends annually, yielding an impressive 3.18%.
“With a sharpened focus on innovative medicine and medtech solutions, Johnson & Johnson is innovating across the spectrum of healthcare and is poised to deliver the medical breakthroughs of tomorrow,” Johnson & Johnson Chairman and CEO Joaquin Duato said.
Johnson & Johnson’s net sales rose 6.8% year over year in the third quarter of 2023, while adjusted earnings per share (EPS) rose 19.3% over the same period to $2.66. Analysts expect the company’s EPS to rise by 10.2% year over year to $2.26 in the current quarter.
The company’s strong financials and dividend payouts have made it popular among investors, especially during times of market turbulence. Financial services firm Cantor Fitzgerald has an Overweight rating on Johnson & Johnson stock, with a price target of $215, indicating a potential upside of over 45%.
NextEra Energy
NextEra Energy Inc. (NYSE:NEE) is the largest utility company globally, generating the most solar and wind energy compared to any other enterprise in the world. It is also one of the largest capital investors in infrastructure in the U.S. and has nearly $85 billion to $95 billion in investments planned through 2025.
A member of the Fortune 200, NextEra Energy is a dividend aristocrat, as the company has raised its dividend payouts for 25 consecutive years. The utility giant currently pays $1.87 in dividends annually, yielding 3.26% on the current price.
The company plans to reduce its exposure in the oil and gas sector to focus on renewable energy. To this end, NextEra Energy is selling its gas pipelines in South Texas to Kinder Morgan Inc. for $1.82 billion. The company plans to use the proceeds to reduce its outstanding project-related debt.
This should boost NextEra Energy’s profit margins in the near term. The consensus EPS estimate of $3.40 for fiscal 2024 indicates an impressive 8.6% rise year over year.
Morgan Stanley has a bullish outlook on NextEra Energy as well, holding an Overweight rating on the stock. The financial institution has a price target of $79 on the stock, indicating a potential upside of over 37%.
Realty Income
Real estate investment trusts (REITs) are typically a popular choice among dividend investors, as they are required to distribute at least 90% of their total earnings to shareholders annually. Realty Income Corp. (NYSE:O) is one of the largest REITs in the U.S., operating approximately 13,250 real estate properties across the country.
A member of the S&P 500 index, Realty Income has a stellar dividend payout record, as it has raised its dividend payments 122 times since its public listing. The REIT currently pays $3.07 in dividends annually, yielding 5.81% on the current price.
Realty Income has been taking steps to increase its property holdings. Last month, it agreed to acquire Spirit Realty Capital, a REIT specializing in single-tenant properties.
“We expect that this transaction will create immediate and meaningful earnings accretion while enhancing the diversification and depth of our high-quality real estate portfolio,” Realty Income President and CEO Sumit Roy said.
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This article Worried About Market Volatility? Invest In These High-Yield Dividend Stocks For Consistent Passive Income originally appeared on Benzinga.com
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