If you’re sitting on $5,000 and eager to deploy that capital into a reliable dividend payer as the market rotates, I’ve got three blue-chip stocks that look worthy of your consideration right now.
-
Despite price investments in key categories, Kimberly-Clark yielded 4.6% and organic sales grew 2%.
-
General Mills reported revenue of $4.86B and EPS growth of 7.1%, but organic sales declined year over year.
-
Benefiting from the increase in interest income, Paychex’s revenue soared by 18%, and operating income increased by more than 20%.
Read: NVIDIA Analyst Calls in 2010 Just named his top 10 artificial intelligence stocks
-
The analyst who called NVIDIA in 2010 had just listed his top ten AI stocks. Get them for free.
These Dividend Aristocrats combine generous yields, growth, and rock-bottom valuations. In my opinion, this makes these stocks the perfect vehicle for compounding wealth.
Kimberly Clark (NASDAQ: KMB ) is a leader in consumer staples and personal care giants known for its defensive positioning (can’t stop buying those baby wipes, it’s impossible). With a dividend yield of 4.6% and strong revenue and net profit growth driven by key asset divestitures and operational streamlining efforts, Kimberly-Clark is one of my top defensive picks in this market for those looking to generate income.
With dividend growth rates in the mid-single digits over the long term, and years of dividend growth supporting its current distributions, I think Kimberly-Clark is well positioned to deliver more earnings and dividend growth over time. This is primarily due to the company’s defensive cash flow structure, as well as its balance sheet strength.
Last quarter, the company’s net profit significantly exceeded expectations and revenue was in line with expectations. Notably, organic sales grew more than 2% and volume/mix increased 3% despite price investments in some key product categories. This stock has proven to be relatively resistant to inflation so far, which is a good thing for those looking for long-term dividends in their portfolios.
general mills (NYSE: GIS ) is another consumer staples giant with a portfolio of cereal brands and other staples that we can’t go without continuing to drive solid results.
Last quarter, the company beat estimates with adjusted earnings of $1.10 per share, beating estimates of $1.03 (7.1% surprise). Looking at revenue, $4.86 billion easily beat estimates of $4.77 billion, although that did represent a decrease from the same period last year. While organic sales are declining, last quarter’s decline was less than expected, raising concerns among some investors about how inflation might affect the company’s core portfolio.
That’s not to say operating profit and volume challenges won’t persist. I think this is possible. However, the Cheerios cereal maker has taken some significant cost-control measures to improve its balance sheet, which should provide stability to General Mills’ 5.4% dividend yield.
Paycheck (NASDAQ: PAYX ) is as sensitive to the U.S. workforce as any stock on the market. Paychex, a company that generates revenue and earnings from processing payrolls for millions of Americans (hence the name), has seen its revenue remain relatively strong despite concerns about a worsening job market. I think that’s a solid background given the pace of hiring in the private sector versus the public sector.
In fact, last quarter was a very solid one for Paychex and its investors. Revenue soared 18% year over year, exceeding expectations by more than 10%. Net profit achieved similar results, with adjusted operating income up more than 20% year over year.
So if the job market slows down, don’t tell Paychex’s management team. The company’s ability to benefit from growing interest income (as the yield curve steepens) and offers investors a 4.6% dividend means this is a beaten-down software stock that I think is worth considering if there’s further declines ahead.
Wall Street is pouring billions into artificial intelligence, but most investors are buying the wrong stocks. The analyst who first identified NVIDIA as a buyback in 2010 (before the stock surged 28,000%) has just identified 10 new AI companies that he believes can deliver outsized returns from here. One dominates a $100 billion equipment market. The other is to solve the biggest bottleneck hindering the development of artificial intelligence data centers. The third is pure competition in the optical network market, which will quadruple in size. Most investors haven’t heard of half of these names. Get a free list of all 10 stocks here.