3 Must-Have Dividend Stocks According to Wall Street Pros
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The stock market has been highly volatile lately. On Aug. 5, the S & P 500 index plunged by nearly 3%, triggered by a global market rout. The tech-focused Nasdaq composite Index fell by 3.4% intraday, marking the largest decline since May 2022.
While the markets have significantly recovered since then, investors are still concerned about surging volatility. The CBOE Volatility Index has surged by over 43% over the past five days and more than 83% over the past month.
In a volatile market, investors often seek refuge in dividend stocks that offer consistent returns and a buffer against downturns. Dividend-paying companies provide regular income and tend to be well-established entities with stable earnings. According to Wall Street pros, Coca-Cola, JPMorgan Chase, and Walmart are three must-have dividend stocks for any portfolio.
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Coca-Cola
Coca-Cola (NYSE:KO), an iconic brand with a century-long history, is a staple income stock. Known for its robust and diversified product lineup, Coca-Cola has consistently delivered strong financial performance. Business tycoon and investment guru Warren Buffett considers Coca-Cola his “Secret Sauce,” referring to its dividend prowess, as Berkshire Hathaway generates millions annually in payouts.
Coca-Cola currently pays $1.94 in dividends annually, yielding 2.85% on the current price. The company has raised its dividends for 63 years, making it a Dividend King.
Citigroup gave Coca-Cola a Buy rating with a price target of $75 last month, indicating a potential upside of over 10%. Argus Research also gave the company a Buy rating with a price target of $72, indicating a potential upside of nearly 6%.
JPMorgan Chase
JPMorgan Chase & Co. (NYSE:JPM) is the largest bank in the United States, with its total assets amounting to $4.14 trillion as of June 30, 2024. JPMorgan pays $4.60 in dividends annually, yielding 2.3% on the current price.
On June 28, the company raised its quarterly dividends by 10 cents to $1.25 per share for the third quarter and announced a share repurchase program of $30 billion. Notably, JPMorgan has raised its dividends for 14 years in a row.
“The Board’s intended dividend increase, our second this year, would represent a sustainable level of capital distribution to our shareholders, supported by our strong financial performance and continuous investments in our business,” said Jamie Dimon, CEO and Chairman of JPMorgan & Chase. “The new share repurchase program provides additional flexibility to return excess capital to our shareholders over time, as and when appropriate.”
Jefferies Group has a “Buy” rating on JPM stock with a price target of $239, indicating a potential upside of over 17%. Piper Sandler also has a similar rating on JPM with a price target of $230, indicating a potential upside of 13.4%.
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Walmart
Walmart Inc. (NYSE:WMT), the world’s largest retailer, is renowned for its extensive footprint and ability to generate steady cash flows, making it a prime candidate for dividend investors.
“Dividends continue to be a part of our diversified capital returns approach. We’re proud to be increasing our annual dividend for the 51st consecutive year. This year’s nine percent increase is the largest in over a decade, and a sign of our confidence in our growth potential and cash flow,” said Walmart’s CFO and executive vice president, John David Rainey, in a news release.
The company joined the elite ranks of Dividend Kings in 2024, having increased its dividends for the 51st consecutive year in February 2024. Walmart currently pays an annual dividend of $0.83 per share, resulting in a yield of 1.23% on its current stock price. Earlier in February, the company made headlines with a 9% hike in its annual payout – the largest increase over a decade.
Tigress Financial has a “Buy” rating on Walmart with a price target of $86, indicating a potential upside of over 26%. KeyBanc also has a “Buy” rating on the company with a price target of $82, indicating a potential upside of nearly 21%.
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