Want $300 in passive income? Invest $15,000 in these two Dow dividend giants.

that much Dow Jones Industrial Average If you’re an investor seeking passive income, this is a great place to shop. This collection of 30 of the world’s largest publicly traded companies includes many with outstanding earnings growth records. The dividend yield provides immediate cash returns, with the potential for consistent annual increases for many years to come.

Building a stream of income doesn’t require a big investment either. Divide the $15,000 investment equally walmart (WMT 0.38%) and home depot (HD 0.62%)For example, you will receive approximately $300 per year, or 2% of the cost. Here’s why this is an attractive option for dividend stock investors today.

Walmart has a good location

Walmart’s dividend yield is relatively small at 1.5%, but don’t let that scare you off this stock. Ultimately, the retailer is checking all the right boxes for investors.

Revenue growth in the most recent quarter was a healthy 5% year-over-year, well ahead of competitors such as: target. Shoppers these days are more focused on saving money and purchasing consumer necessities like groceries, a trend that favors Walmart’s focus on value.

If you look beyond the headline numbers, there’s more good news for the retailer. Walmart’s customer traffic is very positive and shoppers are spending more with each visit. Profit margins are also improving. Of course, Walmart executives were cautious about near-term growth trends. However, low inventory holdings and strong traffic trends mean it is likely to maintain positive momentum well into 2024 and beyond.

Home Depot will rebound

With the housing market slowing due to rising interest rates, it makes sense that Home Depot stock would trail the market this year. But the company has been through many downturns before, including the Great Recession. However, we overcame this slump and set a new sales record. Look for another rebound, potentially starting in 2024.

Home Depot expects comparable store sales to decline 3 to 4 percent this year, roughly in line with the decline expected by its peers. lowes. But profits will still be strong.

Home Depot’s operating profit margin is expected to remain above 14% of sales. Home Depot is also one of the most efficient businesses on the market in terms of return on invested capital. This is a clear sign that management is allocating excess cash well, including further investments in e-commerce infrastructure, share buybacks, and higher dividends.

Home Depot aims to return 55% of its annual profits to shareholders in the form of dividends. This is more generous than Lowe’s 35% target and is one of the reasons the returns are so high.

Of course, dividend stocks could underperform if the economy tips toward a recession in future quarters. But that’s a normal part of the retail world. Income investors can look past these short-term fluctuations and focus on Home Depot’s bright future as it continues to capitalize on its dominant position in the attractive home improvement industry.