Research indicates dividends have historically contributed significantly to total returns, accounting for about 85% of the cumulative total return of the S&P 500 index since 1960. This trend underscores the value of the best dividend stocks. They are attractive for income-focused investors and those looking to enhance their portfolio performance.
Here are the three best dividend stocks to secure steady income in H2 2024.
Dow (DOW)
Dow (NYSE:DOW) leads our list of the best dividend stocks. As a global leader in materials science, Dow innovates materials for diverse high-growth markets, including packaging, infrastructure, mobility, and consumer applications worldwide.
In the second quarter of 2024, Dow demonstrated resilience amid a sluggish global recovery. Net sales of $10.9 billion meant a slight sequential growth despite a 4% year-over-year (YOY) decline. Demand increased in key sectors such as packaging, electronics, and home and personal care, although lower pricing impacted overall revenue. EPS was 68 cents, a 21.5% increase from the previous quarter but a 10% decline from last year.
Despite these challenges, Dow’s strong cash generation enabled it to return $691 million to shareholders while continuing to invest in growth. The company has also been investing strategically, highlighted by its recent acquisition of Circulus, a plastic waste recycler. This move enhances Dow’s sustainability efforts and positions it to capture the growing demand for eco-friendly materials.
Although Dow stock has declined 4% in 2024, it offers a 5.4% dividend yield, appealing to income-focused investors. The shares are trading at a reasonable 18.8 times forward earnings and 0.9 times sales. Analysts’ 12-month median price forecast at $58 suggests an 11% upside potential for DOW stock.
Exxon Mobil (XOM)
Next on our list of best dividend stocks is Exxon Mobil (NYSE:XOM), a global leader in the oil and gas industry. Exxon is involved in every aspect of the petroleum industry, from exploration to refining, and operates a vast network of gas stations. Exxon has raised its dividend for 42 consecutive years as a dividend aristocrat.
In the second quarter, Exxon delivered impressive earnings results. Total revenues rose 12% YOY to over $93 billion and adjusted diluted EPS surged 20% to $2.14 thanks to Exxon’s diversified portfolio. Meanwhile, Exxon maintains a solid financial position. For example, it has repaid $3.9 billion in debt YTD and holds $26.5 billion in cash.
Exxon has also advanced its sustainability efforts by signing its fourth carbon capture and storage (CCS) agreement. Management targets the removal of up to 500,000 metric tons of CO2 annually from CF Industries’ site in Mississippi.
So far in 2024, XOM stock has soared around 19%, supported by a current dividend yield of 3.2%. The shares are trading at 13.2 times forward earnings and 1.4 times sales. Wall Street remains optimistic, projecting a more than 9% upside potential for XOM stock. Exxon enjoys a 12-month median price target of $130.
Global X SuperDividend U.S. ETF (DIV)
We conclude today’s exploration of the best dividend stocks with the Global X SuperDividend U.S. ETF (NYSEARCA:DIV). This exchange-traded fund (ETF) provides exposure to 50 of the highest dividend-paying equities in the United States, focusing on low-volatility stocks.
Launched in March 2013, DIV has made monthly distributions for 11 consecutive years. The top 10 holdings comprise approximately 25% of its $620 million in net assets.
The fund’s industry allocation includes utilities (19%), energy (17%), real estate (16%), tobacco (11%) and telecommunication (7%). Leading names in the portfolio are Virtu Financial (NASDAQ:VIRT), Telephone & Data Systems (NYSE:TDS), National Health Investors (NYSE:NHI), Philip Morris (NYSE:PM) and Altria Group (NYSE:MO).
Despite the challenging market conditions, DIV has gained almost 3% YTD and currently offers a 6.4% dividend yield. Its trailing price-to-earnings (P/E) and price-to-book (P/B) ratios stand at 13.5x and 1.6x, respectively. With an expense ratio of 0.45%, or $45 annually per $10,000 invested, the fund provides the possibility of accessing high-yielding U.S. equities. For investors seeking a balance of steady income and the potential for capital appreciation, DIV is a compelling option to consider in the current market environment.
On the date of publication, Tezcan Gecgil did not have (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.
Tezcan Gecgil, PhD, began contributing to InvestorPlace in 2018. She brings over 20 years of experience in the U.S. and U.K. and has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Publicly, she has contributed to investing.com and the U.K. website of The Motley Fool.