Many experts continue to see rocky times ahead For the stock market, it may be time to look at dividend stocks for 2023.
Dividend stocks are a way to diversify a portfolio that may be chasing growth a little too obsessively. They provide income in good times, bad times, and especially today in times of high inflation. (US consumer prices rose 7.7% in October from a year ago.)
They also tend to outperform the S&P 500 over the long term.
One prominent portfolio heavy in dividend stocks is owned by The Bill & Melinda Gates Foundation Trust. As the trust is used to pay for many initiatives, income must continue to flow into it.
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Dividend stocks help let it happen🇧🇷
Here are three dividend stocks that hold a significant place in the fund’s holdings.
Waste Management (WM)
It’s not the most glamorous of industries, but waste management is an important one.
No matter what happens in the economy, municipalities have no choice but to pay companies to get rid of our mountains of trash, even if those costs increase.
As one of the largest players in the space, Waste Management remains firmly positioned.
Shares have nearly doubled in the past five years. In the first nine months of 2022, operating income increased by 11% year-on-year.
Currently offering a yield of 1.6%, Waste Management’s dividend has increased for 19 consecutive years.
The company has paid almost $1 billion in dividends over the past year, and its estimated free cash flow of $2.5 billion for 2021 means investors shouldn’t worry they receive their checks🇧🇷
Caterpillar (CAT)
As a company whose fortunes typically follow the larger economy — which will happen when your equipment is a fixture on construction sites around the world — Caterpillar is in an interesting position post-pandemic.
The company’s revenues are feeling the effects of a paralyzed global supply chain, but President Joe Biden’s $1.2 trillion infrastructure bill means there could be plenty of construction in the U.S. in the near future.
Caterpillar’s mining and energy businesses also provide exposure to commodities works well in times of high inflation🇧🇷
The company’s stock has risen more than 60% over the past five years on higher crude and oil prices.
After announcing an 8% increase in June, Caterpillar’s quarterly dividend is currently $1.20 per share, offering a yield of 2.0%. The company has increased its annual dividend for 28 consecutive years.
Walmart (WMT)
Walmart, whose grocery stores are considered essential businesses, was able to keep more than 4,700 of its U.S. stores open during the pandemic.
Not only has the company grown profits and market share since COVID coughed up the planet, but its reputation as a cheap haven has made Walmart a go-to retailer for many consumers when prices rise.
Walmart has consistently increased its dividend for the past 49 years. Its annual payout is currently $2.24 per share, which translates to a 1.5% dividend yield.
Walmart is currently trading at $153 a share, above its 52-week high of $160.77 set in April.
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This article provides information only and should not be construed as advice. Provided without any warranty.
