3 dividend stocks to buy to create the gift that keeps on giving

Holiday gift-giving season may be winding down, but that doesn’t mean investors can’t ring in the new year with gifts that will continue to give themselves all year long. The right dividend stocks will add ever-increasing value to your portfolio, either through growing cash payouts or through larger shares of the stocks that pay them when these payments are reinvested. And given that reliable dividend stocks tend to perform better than those that pay inconsistent or no dividends, even growth-oriented investors may be wise to add some of these names to their holdings.

To that end, let’s take a closer look at three dividend stocks that would be wise additions to almost anyone’s portfolio. In no particular order…

Image source: Getty Images.

pepsico

Some of the most popular income stocks in the Consumer Staples sector of the stock market include: coke. And rightly so. The company’s products are some of the most recognizable in the beverage industry, and the company itself has not only paid dividends like clockwork for decades, but has also raised its dividend every year for the past 63 years.

However, if you’re looking for better return opportunities in consumer packaged goods names, Coca-Cola Rivals pepsico (prototype +0.03%) While it’s a better beverage bet for now, its forward-looking dividend yield is nearly 4%.

Of course, as anyone who has been watching the company recently knows, this return is significantly higher because PepsiCo’s stock price has been underperforming.

today’s change

(0.03%)$0.04

current price

$143.78

Key data points

market capitalization

$197 billion

work range

$143.09 -$143.94

52 week range

$127.60 -$160.15

volume

5M

average volume

7.5 million

gross profit

54.21%

dividend yield

3.91%

Most blame inflation. Some of PepsiCo’s rising costs have been passed on to customers, but many have not, eating into profits.

But these headwinds are finally abating after the company itself reorganized itself into a more relevant and marketable family of brands. For example, last March we acquired Poppi, a prebiotic soda brand, and in July we launched the world’s first prebiotic cola.

Analysts don’t expect an overwhelming response to these and other checks. However, they expect sales growth to accelerate at a 3.6% rate going forward, leading to even faster earnings growth. Once other investors see this growth coming to fruition, they could very quickly jump on board and drive up the stock price, lowering this stock’s current dividend yield. Acting before it happens is better than acting after it happens.

chevron

Contrary to popular assumptions, the advent of renewable energy and electric vehicles does not reduce the consumption of fossil fuels such as crude oil or natural gas. Electricity and transportation needs are absorbing all of this capacity increase; then portion. In fact, the International Energy Agency now believes that the world’s daily oil use will never peak until 2050, putting previous forecasts even further ahead. And even so, their numbers will likely decline slightly over the next few decades.

Translation: There is still money to be made in the oil business, and there will be for a long time to come.

enter chevron (NYSE: CVX) …is one of the largest and most well-known names in the oil industry. Last year, it converted $203 billion in revenue into nearly $18 billion in net income, and is on pace to report similar numbers this year. Of course, this sheer size and scale means the company can fund its best opportunities and operate more cost-effectively. More specifically, a well-funded Chevron can afford to run more complex businesses that include drilling, refining, and transportation, meaning it can safely maintain its dividend and necessary capital expenditures even if oil prices fall to $50 a barrel. The company is actually one of the most cost-effective players in the energy business, with oil prices as low as $30 per barrel covering all of its upstream production costs.

More importantly for interested income investors, Chevron’s record of 38 consecutive years of annual dividend growth should remain uninterrupted into the indefinite future. Newcomers will start plugging in while expected future returns are below 4.6%.

Brookfield Asset Management

Add it last. Brookfield Asset Management (night 0.21%) Add them to the list of dividend stocks that continue to pay good dividends even after you buy them.

If the name is unfamiliar, it may be because several investments with the same name belong to this family. These include: Brookfield Infrastructure Partners, Brookfield Play Partnersand Brookfield Business Partners. Each of these companies brings a unique investment proposition to the table, capitalizing on the best opportunities of the modern economy, from energy infrastructure to real estate, artificial intelligence, and private equity in permanently marketable multi-service businesses. For example, Brookfield Renewable’s hydroelectric plants in Pennsylvania will provide more than $3 billion worth of power to data centers it owns and operates: alphabetIn the next few years, it will be Google of . In many cases, there is no other way to invest in these promising companies.

But Brookfield Asset Management itself is different. As the manager of these entire funds, a company that manages companies worth more than $1 trillion, it collects ongoing fees for its work. More importantly, this recurring fee-based business is ideally suited to dividend support. and Dividend growth. We are targeting revenue growth of between 15% and 20% in the near future. If the dividend payout ratio is around 90%, shareholders’ dividend income will also increase at approximately this rate.

Brookfield Asset Management

today’s change

(-0.21%)$-0.11

current price

$53.37

Key data points

market capitalization

$88 billion

work range

$53.20 -$53.52

52 week range

$41.78 – $64.10

volume

673K

average volume

2.3 million

gross profit

94.86%

dividend yield

3.27%

You will never achieve explosive capital gains in these stocks. That’s the trade-off with a management fee-based business like this. But with plausible low double-digit growth for today’s buyers and a 3.3% future dividend yield, reinvesting ever-growing dividends into more BAM stock could translate into long-term earnings that can easily compete with most growth stocks.