Top Dividend Stocks to Consider for Steady Income

The Benefits of Dividend Stocks

Smart investors often fill their portfolios with dividend-paying stocks for several reasons. Even during market downturns, a healthy company is likely to continue its dividend payments. While stock prices may stagnate or fall, dividends provide a consistent income stream. Furthermore, these payouts often increase annually, and over time, the stock price of a stable company tends to rise as well. Thus, investing in dividend stocks presents multiple benefits.

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Here are three dividend-paying stocks worth considering, whether your budget is $1,000 or $100,000.

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1. Altria: A Dividend Giant

Tobacco leader Altria (NYSE: MO) has a longstanding reputation for solid dividends, currently boasting a substantial yield of 7.8%. Though its average annual payout growth has been about 4% over the last five years, this may not be the highest growth rate. However, the significant yield makes it appealing.

Despite concerns over declining smoking rates—reaching an all-time low earlier this year—Altria has diversified into alternatives like vaping products. For now, its cigarette sales remain primary, and total revenue was relatively flat in the recent quarter.

2. Ford Motor Company: Dependable Dividends

Ford Motor Company (NYSE: F) is another enticing option, offering a recent yield of 5.9%. While its quarterly payout of $0.15 per share has remained steady over five years, fluctuating amounts have occurred during that time.

Investors may be attracted by its reliable dividends and successful Pro division targeting businesses. Nevertheless, issues with electric vehicle sales in China could impact the outlook, despite recent successes in the U.S. Additionally, Ford’s recall numbers are concerning when assessing its stability.

With its shares declining over recent years, Ford’s current P/E ratio of 6 is below its five-year average of 7.4, making it potentially attractive for value-conscious investors.

3. PepsiCo: A Solid Dividend Performer

PepsiCo (NASDAQ: PEP) continues to be a strong contender in the dividend-paying arena. Beyond its prominence in beverages, it has a significant presence in the snack industry with brands like Lay’s, Doritos, and Gatorade.

PepsiCo’s dividend yield stands at 3.7%, with an impressive annualized growth rate of 7% over the last five years. This marks over 50 consecutive years of dividend increases, showcasing its strong positioning.

While recent results showed decreased demand, PepsiCo’s CEO highlighted effective cost controls that helped profitability. Its stock, with a forward P/E of 17, is below the five-year average of 23, enhancing its appeal for income-seeking investors.

These are just a few of the many attractive dividend-paying stocks available. Investors should look into any that spark interest, and also consider diversifying with high-performing dividend-focused ETFs.

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*Stock Advisor returns as of January 21, 2025

Selena Maranjian holds positions in Altria Group. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the author’s and do not necessarily reflect those of Nasdaq, Inc.