In the current adverse macro environment, identifying reliable dividend stocks to buy may provide long-term financial stability and constant income. Dividend stocks offer a dual advantage. They provide regular income through dividends and have the potential for capital appreciation.
Here, the focus is on seven top dividend stocks, each distinguished by its solid performance, market presence, and constant payout history. Companies like the first one have solid leads in digital education. The second one holds disciplined underwriting in insurance.
Meanwhile, the third has substantial growth in loan portfolios, and the fourth has strategic expansion in energy infrastructure that further highlights the diverse opportunities available in the financial and energy sectors. The fifth company offers advanced filtration solutions, and the sixth one has sharp cost management and brand recovery efforts that underscore the potential for sustained profitability in the industrial and consumer staples sectors. The seventh one holds stable rental income through high-quality retail properties.Â
John Wiley & Sons (WLY)
John Wiley & Sons (NYSE:WLY) stock offers a 3% forward dividend yield and is a global research and education company. Wiley derived adjusted revenue of $441 million for the quarter, up 4% year-over-year from a year ago. This growth was driven by solid learning performance, particularly from digital content, courseware, and the GenAI content rights project.
The adjusted EBITDA margin for the quarter was 28.3%, exceeding its fiscal 2023 adjusted EBITDA margin of 23.3%, indicating improved operational efficiency and cost-management initiatives. Similarly, Wiley accelerated a $130 million cost-saving program, achieving 70% implementation with in-year savings higher than anticipated.
Moreover, despite a transitional period with restructuring and investments, Wiley delivered $114 million in free cash flow, exceeding projections of $100 million. This resilience indicates strong cash flow management. Wiley increased returns by raising dividends for the 30th consecutive year and increasing stock repurchases. Overall, Wiley is among the top dividend stocks to buy due to its solid performance and constant dividend payouts.
Old Republic International (ORI)
Old Republic International (NYSE:ORI) is a diversified insurance underwriter. The company’s stock yields a 3.3% forward dividend. Old Republic International derived an operating income of $231.5 million for Q1 2024, marking a 3.9% increase from Q1 2023.
This growth is driven by performance in general insurance despite challenges in title insurance. The consolidated combined ratio for Q1 2024 was 94.3%, up from 92.7% the previous year, primarily due to difficulties in title insurance. Despite the increase, maintaining a combined ratio below 100% demonstrates effective underwriting discipline and insurance operations management.
Further, General Insurance showed strong underwriting results, with operating income of $220 million, up 14% from a year ago, and a combined ratio of 90.3%. A significant increase in operating income (from $193 million to $220 million) underscores robust growth in this segment, supported by a healthy combined ratio. Net investment income increased by 19% in Q1 2024. It is driven by higher yields on corporate bonds and a constant high-quality bond portfolio.
To sum up, Old Republic is on the top dividend stocks to buy list due to its high operational performance and high-quality portfolio.
1st Source (SRCE)
1st Source (NASDAQ:SRCE) provides banking, insurance, and wealth advisory services. Its stock is attached to a 2.3% dividend yield. 1st Source experienced significant growth in average loans and leases. The company’s average loans increased by $116.21 million in the first quarter. This is a 1.8% increase from thee fourth quarter of 2023. Annually, average loans grew by $467.87 million, reflecting a robust 7.75% increase.
This growth in loan and lease portfolios indicates 1st Source’s ability to attract and retain borrowers across sectors, including auto and light trucks, renewable energy and commercial real estate.
Additionally, net interest income rose to $72.06 million in the first quarter, up 3.3% from a year ago. Despite competitive deposit rate pressures, the net interest margin improved by 0.03% quarter-over-quarter to 3.54%. This small net interest income and margin increase marks a sharp management of interest rate spreads and loan pricing strategies. This improvement suggests that 1st Source can manage its interest-bearing assets and liabilities, optimizing profitability.
1st Source’s growth in loan portfolios and sharp management of interest rate spreads solidify its presence among the top dividend stocks to buy.
Enterprise Products Partners (EPD)Â
Enterprise Products Partners (NYSE:EPD) is a midstream energy company. Its stock yields a 7.1% forward dividend. The company’s net income increased by 5% from a year ago to $1.5 billion in the first quarter. On the other hand, distributable cash flow stood at $1.9 billion, which is consistent with the previous year’s performance. This cash flow supported a 5.1% increase in cash distributions to partners compared to the previous year.
Earnings growth was primarily based on new assets placed into service in the second half of 2023. It contributes to higher net marine terminal volumes and increased margins in the octane enhancement business.
Moreover, Enterprise Products Partners has expanded its operational capabilities and infrastructure investments. The company expanded its Permian natural gas processing infrastructure with new plants like Leonidas and Mentone 3, each capable of significant processing capacities. There are plans to add three more 300 million cubic feet per day (MMcf/d) plants.
This will enhance production capacity to 675,000 barrels per day. EPD’s extensive infrastructure, strategic expansions in major energy regions, and strong liquidity position it as a top dividend stock to buy.
Donaldson (DCI)Â
Donaldson (NYSE:DCI) leads in filtration solutions. The company’s stocks provide a 1.4% dividend yield (forward). Compared to the previous year, the company’s total sales increased 6% to $928 million in the third quarter of fiscal 2024. This growth indicates robust demand across its operating segments, particularly in mobile solutions, industrial solutions, and life sciences.
Further, sales increased 6% to $585 million, driven by solid aftermarket performance with an 11% growth to $445 million. This growth reflects market share gains and normalized demand levels post-destocking.
Sales grew 3% to $269 million, driven by volume growth in dust collection and power generation products, with aerospace and defense contributing significantly with a 6% sales increase. This is primarily due to solid performance in the bioprocessing and disk drive businesses, supported by strategic acquisitions.
Overall, Donaldson’s strong operational performance makes it a solid choice for the top dividend stocks to buy.
Clorox (CLX)Â
Clorox (NYSE:CLX) has a household cleaning and lifestyle product portfolio. Its stock offers a 3.5% forward dividend yield. One of Clorox’s key strengths is its ability to expand its gross margin. For the third quarter, the gross margin increased to 42.2% from 41.8% in the previous year, reflecting a 0.4% improvement.
Strategic pricing actions and cost savings primarily drove this gain. This trend demonstrates Clorox’s effective margin transformation program. This showcases its operational efficiency and ability to maintain profitability despite rising costs.
Another considerable aspect of Clorox’s recovery is its sharp handling of the aftermath of its 2023 cyberattack. Despite a 5% decrease in net sales, the company attained a 2% increase in organic sales. This recovery is underscored by the regaining of nearly 90% of the market share lost due to the cyberattack by the end of Q3.
Clorox’s strategic efforts to rebuild inventories, restore service levels, and reinvest in its brands have been crucial in regaining consumer trust and market presence. In short, Clorox’s inclusion on the top dividend stocks to buy list is based on an expanded gross margin and a sharp recovery from the aftermath of the cyberattack.
NNNÂ REIT (NNN)Â
NNN REIT (NYSE:NNN) owns and manages a diversified portfolio of retail properties across the US. Its stock yields a 5% forward dividend. NNN REIT maintains a consistently high occupancy rate of 99.4% as of Q1 2024. This figure exceeds its long-term average of 98%, indicating solid tenant retention and effective lease management strategies.
The company’s ability to lease seven assets during the quarter with a 91% rent recapture rate from prior rents demonstrates its skill in maximizing revenue from existing properties without excessive tenant improvement costs. Historically, achieving rent recapture levels above 70% further points to sharp lease management practices.
Moreover, during the first quarter, NNN REIT strategically sold six income-producing properties, generating nearly $19 million in proceeds. This proactive approach to portfolio management allows it to reallocate capital efficiently, reinvesting proceeds into new acquisitions. Notably, the REIT targets a disposition cap rate of 1% lower than its capital deployment rate. This indicates a disciplined approach to optimizing portfolio returns.
To sum up, NNN’s focus on high-quality tenants and sharp lease management strategies make it a top-notch dividend stock to buy.
On the date of publication, Yiannis Zourmpanos 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
