The stock market is notorious for its volatility. And after a torrid 2021, the bad days have returned with force this year. However, while prices can go up and down, the dividends are constant. So it’s no surprise that investors are looking for the best dividend-paying stocks for passive income.
In fact, these seven dividend-paying stocks have increased their dividend payouts for at least 25 consecutive years. This makes them part of the small group of Dividend Aristocrats who have accomplished this feat. On top of that, the seven best dividend stocks for passive income pay a dividend yield of at least 3.5% today. Thus, these names offer both a strong starting yield and an annual increase in payout. Let’s dive into these seven best dividend-paying stocks for passive income!
|WBA||Walgreens Boot Alliance||$38.88|
|TRF||Federal Real Estate||$105.36|
|O||Real estate income||$72.29|
Dividend Stocks for Passive Income: Walgreens Boots Alliance (WBA)
Retail is generally perceived as a difficult industry. Consumer preferences and fashions change rapidly. Some niches, however, are more resilient, with the pharmaceutical sector leading the way. As the pandemic has shown, a company like Walgreens Boot Alliance (NYSE:WBA) is an essential service at all times.
The healthcare industry continues to evolve, and some investors are concerned about Walgreens’ role in that future. However, for various logistical and regulatory reasons, pharmacy is not an area particularly suited to e-commerce. And people like to see a pharmacist when making many important health decisions.
Long story short, Walgreens will likely continue to increase its dividend for investors in the years to come, as it has for the past 47 years. Meanwhile, WBA stock offers an invigorating 4.8% dividend yield.
Exxon Mobil (XOM)
Exxon Mobil (NYSE:XOM) is the largest oil and gas company in North America. It has outperformed its rivals over the decades due to management discipline and judicious capital allocation. While other management teams chased trends and fads, Exxon Mobil stayed true to its core strategy.
In the late 2010s, this meant Exxon Mobil pouring more capital into oil and gas as the industry slumped. Analysts decried the move. Fast forward five years and Exxon Mobil’s new offshore oil field in Guyana is an absolute source of cash flow. The company’s refining and chemicals holdings are also offering record earnings in the current inflationary environment.
Don’t think about it too much. Exxon Mobil has been paying a growing dividend for decades despite various energy crises. The company is unmatched in its industry and oil is now in a major new bull market.
Dividend Stocks for Passive Income: VF Corp (VFC)
V.F. Corp. (NYSE:VFC) is one of the largest apparel companies in the country, specializing in outdoor and leisure wear. The unique property of the company is that it operates as a conglomerate. He owns more than a dozen different brands, including Vans, The North Face, Timberland, Dickies and JanSport.
VF has a history of buying brands when they are at a low point and developing and/or rehabilitating them. He then sells or sometimes disposes of them at much higher valuations once they gain momentum. Moreover, the collection of different brands and demographics ensures that something always sells well in the business ecosystem.
VFC stock has fallen nearly half of its 2021 highs. The usual concerns about inflation, supply chains and a slowdown in consumer spending apply. However, VF is a dividend aristocrat with a long history of navigating the economic cycle. Meanwhile, stocks are now yielding 4.3%.
Federal Real Estate Investment Trust (FRT)
Federal Real Estate (NYSE:TRF) is the oldest dividend aristocrat in the real estate investment trust (or REIT) category. Incredibly, it’s increased its dividend every year since 1968. That’s right, this upscale shopping center and mixed-use property owner kept increasing its dividend during the 1970s inflation, the Great Depression savings and loans of the late 1980s, the September 11 attacks, the housing crisis of 2008 and the Covid-19 pandemic.
Critics will say Federal Realty’s 54-year streak will end thanks to e-commerce. But what they miss is that Federal Realty only owns properties in top markets such as New York, Miami and Los Angeles. It owns only the top-tier properties in these markets and has proactively redeveloped areas to incorporate housing and other mixed-use concepts into its properties. It’s a cut above other mall and mall players.
With the current interest rate panic and recession, FRT stock fell from $140 to $105. With this drop, FRT stock is now yielding a hefty 4%.
Dividend stocks for passive income: real estate income (O)
Real estate income (NYSE:O) is a major triple net lease REIT. Triple net leases are attractive because the tenant, not the landlord, pays the property tax, maintenance costs and insurance premiums. This gives the owner a more stable picture of cash flow.
Realty Income has leveraged this feature with tremendous success over the decades. It obtains low-cost capital and places it in triple net leases with high-quality tenants such as Walgreens. These leases typically last for a decade or more, giving Realty Income an incredibly stable and reliable cash flow.
The REIT shares this cash flow with its investors. Realty Income has increased its dividend for more than 25 consecutive years. Plus, its dividend is paid monthly, providing investors with a particularly welcome stream of income.
With Exxon Mobil, Chevron (NYSE:CLC) is the other big dividend champion in the oil and gas sector. Chevron was able to maintain its dividend growth even during the hot days for the industry between 2014 and 2020.
Today, the company’s balanced approach to oil and gas is paying off. In particular, the company’s investments in liquefied natural gas (or LNG) seem particularly lucrative. With the invasion of Ukraine, Russia’s gas supplies are now in serious doubt. This gives Chevron a unique opportunity to respond to current events and help fill the void in a vital market.
CVX stock has rallied significantly over the past year. Even so, it is still a value. The shares represent less than nine times forward earnings and offer a dividend yield of 3.5%.
Passive Income Dividend Stock: Amcor (AMCR)
Amcor (NYSE:CDMA) is one of the world’s leading packaging companies. It manufactures a wide range of packaging for food, beverages, pharmaceuticals, personal care items and more.
Traditionally, the industry has been associated with plastic waste and environmental concerns. However, Amcor has been a leader in using new materials and formats to reduce environmental impact. The company’s massive scale of operation and innovative product designs have led Amcor to decades of industry leadership.
He converted that into 38 consecutive years of dividend growth. The company is targeting double-digit annualized returns between earnings growth and dividend. AMCR’s dividend yield is 3.8% today.
As of press date, Ian Bezek held a long position in VFC and XOM shares. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.