Investing in the stock market is a proven way to build wealth over time, and dividend stocks have always been a favorite among investors seeking a steady income stream. As we step into 2024, let’s delve into the top 15 dividend stocks that are poised to shine in the coming year according to Google Bard.
Top 15 Dividend Stocks Of 2024 by Google Bard
How to Pick Dividend Stocks According to Google Bard
We asked Google Bard the following:
What criteria one need to take into account to select the best dividend stocks for the next 3 years?
Here is the reply:
“Selecting the best dividend stocks for the next 3 years requires careful consideration of various factors to ensure long-term growth and income potential. Here are some key criteria to consider:
- Dividend Growth History: Look for companies with a proven track record of increasing their dividends consistently over time. This indicates a strong financial position and management commitment to rewarding shareholders.
- Payout Ratio: Analyze the payout ratio, which represents the percentage of earnings a company distributes as dividends. A sustainable payout ratio is typically between 40% and 60%, as it allows for sufficient retained earnings for future growth and business expansion.
- Business Stability: Prioritize companies with stable and predictable cash flows, such as those in essential industries like utilities, consumer staples, or healthcare. These industries are less sensitive to economic downturns and can maintain their dividend payments during challenging times.
- Strong Financials: Evaluate the company’s financial health by examining metrics like debt-to-equity ratio, current ratio, and earnings per share (EPS). Strong balance sheets and consistently positive EPS growth indicate a healthy and sustainable business model.
- Growth Prospects: While dividend-focused investing emphasizes income generation, don’t overlook growth potential. Consider companies with steady revenue growth, expansion plans, or new product offerings that could drive future earnings and dividend increases.
- Industry Trends: Stay informed about industry trends and emerging technologies that could impact the company’s competitive landscape and future profitability. Adapt your portfolio accordingly to maintain exposure to companies positioned for long-term success.
- Reinvestment Strategy: Determine your dividend reinvestment plan (DRIP) strategy. Reinvesting dividends can magnify your returns over time, accelerating the growth of your investment portfolio.
- Diversification: Diversify your portfolio across different sectors, industries, and companies to mitigate risk and balance your income stream. Avoid excessive concentration in a single stock or sector.
- Long-Term Outlook: Focus on long-term growth and dividend stability rather than short-term market fluctuations. Dividend stocks are generally more resilient during market downturns, providing a steady income stream.
- Independent Research: Conduct thorough research beyond just dividend metrics. Evaluate industry reports, analyst recommendations, and company presentations to gain a comprehensive understanding of the business and its prospects.
Remember, dividend investing is a long-term strategy, and it’s crucial to exercise patience and reinvest dividends consistently to maximize your returns over time.”
Just to make sure we added:
Are there other criteria to take into account?
Sure enough, AI tools never want to leave the user empty-handed:
“Certainly, there are additional criteria to consider when selecting dividend stocks for the next 3 years, extending beyond the fundamental metrics mentioned earlier. Here are some additional factors to weigh:
- Management Quality: Assess the experience and track record of the company’s management team. Strong leadership is essential for navigating market challenges and ensuring long-term growth and dividend sustainability.
- Ownership Structure: Evaluate the company’s ownership structure. Significant ownership by institutional investors, such as pension funds or mutual funds, often indicates long-term commitment and support for dividend policy.
- Dividend Coverage Ratio: Examine the dividend coverage ratio, which measures the extent to which earnings can cover dividend payments. A higher dividend coverage ratio suggests a more secure payout.
- Consistency of Dividend Increases: Evaluate the consistency of dividend increases over time. Companies with a history of regular and substantial dividend hikes are more likely to maintain their commitment to shareholders.
- Yield Stability: Consider the stability of the dividend yield over time. Avoid stocks with volatile dividend payments, as they may indicate underlying financial or operational issues.
- Economic Moat: Assess the company’s competitive advantage or “economic moat.” A durable moat protects the company from competition and ensures sustained profitability, providing a strong foundation for dividend growth.
- ESG Considerations: Consider the company’s environmental, social, and governance (ESG) practices. Companies with strong ESG practices tend to have lower risk and better long-term financial performance.
- Tax Implications: Evaluate the potential tax implications of dividend income. Consider your tax bracket and dividend tax rates to ensure your overall investment strategy aligns with your tax goals.
- Retirement Goals: If investing for retirement, align your dividend stock selection with your retirement timeline and risk tolerance. Allocate more heavily towards dividend stocks in the later stages of your investing life.
- Regular Review: Regularly review your dividend stock portfolio to ensure it aligns with your investment objectives, risk tolerance, and evolving financial situation. Adapt your portfolio as necessary to maintain a well-balanced and diversified investment strategy.
Remember, effective dividend investing requires patience, discipline, and a long-term perspective. By carefully considering these criteria and conducting thorough research, you can make informed investment decisions and potentially achieve consistent income and long-term wealth growth.”
The Top 15 dividend Stocks of 2024 According to Google Bard
According to these criteria what are the top 15 US dividend stocks to buy in January 2024?
Drum roll:
“Here’s a list of the top 15 US dividend stocks to buy in January 2024 based on the criteria mentioned:
- Verizon Communications (VZ): With a dividend yield of 7.2%, Verizon offers a strong dividend track record and a stable financial position. The company is well-positioned to benefit from the growing demand for wireless data and 5G services.
- Hormel Foods (HRL): Hormel Foods is a consumer staples company with a long history of dividend payments. The stock offers a dividend yield of 3.3%, and the company has a strong global presence and a diversified product portfolio that protects it from economic downturns.
- Procter & Gamble (PG): Procter & Gamble is another consumer staples company with a long history of dividend payments. The stock offers a dividend yield of 2.7%, and the company has a strong global brand and a wide range of products that are essential to consumers.
- Coca-Cola (KO): Coca-Cola is a global beverage company with a strong brand and a loyal customer base. The stock offers a dividend yield of 3.1%, and the company has a history of growing its dividend payments consistently.
- Abbott Laboratories (ABT): Abbott Laboratories is a healthcare company with a strong pipeline of products and a diverse business model. The stock offers a dividend yield of 3%, and the company has a history of generating strong earnings growth.
- Mastercard (MA): Mastercard is a financial services company with a strong global presence and a leading position in the payments industry. The stock offers a dividend yield of 1.9%, and the company is expected to continue to grow its earnings and dividend payments in the coming years.
- Walt Disney (DIS): Walt Disney is a media and entertainment company with a strong brand and a diversified business model. The stock offers a dividend yield of 1.4%, and the company is expected to benefit from the growing demand for streaming services and theme park visits.
- UnitedHealth Group (UNH): UnitedHealth Group is a healthcare insurance company with a strong track record of profitability and dividend payments. The stock offers a dividend yield of 1.8%, and the company is expected to continue to benefit from the aging population and the rising cost of healthcare.
- Intel (INTC): Intel is a semiconductor company with a strong global presence and a leading position in the PC market. The stock offers a dividend yield of 3.5%, and the company is expected to benefit from the growing demand for semiconductors in data centers and other industries.
- American Tower Corporation (AMT): American Tower Corporation is a real estate investment trust (REIT) that owns and operates wireless communication towers. The stock offers a dividend yield of 2.4%, and the company is expected to continue to grow its earnings and dividend payments as the demand for wireless data grows.
- Enbridge (ENB): Enbridge is an energy infrastructure company with a strong global presence and a diversified portfolio of assets. The stock offers a dividend yield of 6.7%, and the company is expected to benefit from the growing demand for oil and gas pipelines.
- Realty Income (O): Realty Income is a REIT that invests in single-tenant net-leased properties. The stock offers a dividend yield of 4.5%, and the company has a strong track record of dividend payments.
- Omega Healthcare Investors (OHI): Omega Healthcare Investors is another REIT that invests in senior housing and healthcare facilities. The stock offers a dividend yield of 5.2%, and the company has a strong track record of dividend payments.
- Welltower (WELL): Welltower is a REIT that invests in senior housing and healthcare facilities. The stock offers a dividend yield of 4.9%, and the company has a strong track record of dividend payments.
- Equinix (EQIX): Equinix is a data center REIT with a strong global presence and a leading position in the data center industry. The stock offers a dividend yield of 3.7%, and the company is expected to benefit from the growing demand for data storage and networking services.
Please note that this list is not exhaustive, and there may be other dividend stocks that are worth considering. It is important to do your own research and consult with a financial advisor before making any investment decisions.”
| Company | Ticker | Dividend Yield (%) | Payout Ratio (%) |
| Verizon Communications (VZ) | VZ | 7.2 | 52 |
| Hormel Foods (HRL) | HRL | 3.3 | 42 |
| Procter & Gamble (PG) | PG | 2.7 | 41 |
| Coca-Cola (KO) | KO | 3.1 | 51 |
| Abbott Laboratories (ABT) | ABT | 3 | 45 |
| Mastercard (MA) | MA | 1.9 | 38 |
| Walt Disney (DIS) | DIS | 1.4 | 32 |
| UnitedHealth Group (UNH) | UNH | 1.8 | 41 |
| Intel (INTC) | INTC | 3.5 | 45 |
| American Tower Corporation (AMT) | AMT | 2.4 | 42 |
| Enbridge (ENB) | ENB | 6.7 | 62 |
| Realty Income (O) | O | 4.5 | 52 |
| Omega Healthcare Investors (OHI) | OHI | 5.2 | 55 |
| Welltower (WELL) | WELL | 4.9 | 54 |
| Equinix (EQIX) | EQIX | 3.7 | 51 |
Just to make sure we asked if it was its final word:
Are there better stocks you would change?
And sure enough Bard can shuffle a few things:
“While the list of 15 dividend stocks mentioned earlier is generally considered to be strong, there is always room for debate and consideration of alternative options. Here’s a potential revision to the list based on updated market conditions and emerging trends:
- Verizon Communications (VZ): Maintains its position as a solid dividend stock with a stable financial position and a growing dividend yield.
- Hormel Foods (HRL): Continues to offer a consistent dividend payment and a diversified product portfolio that provides resilience during economic downturns.
- Procter & Gamble (PG): Remains a reliable dividend payer with a strong global brand and a wide range of consumer staples products.
- Coca-Cola (KO): Still holds its ground as a global beverage leader with strong brand recognition and a loyal customer base.
- Abbott Laboratories (ABT): Maintains its position in the healthcare sector with a diversified business model and a pipeline of promising products.
- Mastercard (MA): Continues to benefit from the growing demand for digital payments and its leadership position in the payments industry.
- Walt Disney (DIS): Leverages its strong brand and diversified business model to generate consistent revenue and dividend payouts.
- UnitedHealth Group (UNH): Strengthens its position in the healthcare insurance industry with its focus on value-based care and a growing customer base.
- Intel (INTC): While facing some challenges in the semiconductor market, Intel still offers a dividend yield and growth potential.
- American Tower Corporation (AMT): Maintains its position in the wireless infrastructure sector with a growing demand for wireless data and a diversified portfolio of assets.
- Enbridge (ENB): Continues to generate steady cash flows from its energy infrastructure assets and offers a higher dividend yield.
- Realty Income (O): Leverages its strong track record of dividend payments and diversified real estate portfolio.
- Digital Realty Trust (DLR): Another strong REIT option with a focus on data center infrastructure and growing demand for cloud services.
- Omega Healthcare Investors (OHI): Maintains its position in the senior healthcare REIT sector with a focus on aging populations and favorable demographic trends.
- Welltower (WELL): Continues to benefit from its growing portfolio of senior living communities as demand for these services increases.
These revised top 15 dividend stocks are based on their current financial performance, industry outlook, and potential for dividend growth. It’s important to conduct thorough research and consider your individual investment goals and risk tolerance before making any investment decisions. Consult with a financial advisor for personalized guidance.”
Asking About Other Potential Companies
Just to test the reasoning.
How about Costco and Home Depot?
“Both Costco and Home Depot are considered to be strong dividend stocks with a track record of dividend growth. Costco has a current dividend yield of 0.6%, while Home Depot has a current dividend yield of 2.4%. Costco typically pays out a special dividend in addition to its regular dividend, while Home Depot pays out its dividend on a quarterly basis.
Here is a table comparing the dividend yields and payout ratios of Costco and Home Depot:
| Company | Ticker | Dividend Yield (%) | Payout Ratio (%) |
|---|---|---|---|
| Costco (COST) | COST | 0.6 | 38.0 |
| Home Depot (HD) | HD | 2.4 | 55.0 |
As you can see, Costco has a lower dividend yield than Home Depot, but it also has a lower payout ratio. This means that Costco is more likely to be able to continue to grow its dividend in the future.
Here is a table comparing the financial strength of Costco and Home Depot:
| Company | Ticker | Debt-to-equity ratio | Current ratio |
|---|---|---|---|
| Costco (COST) | COST | 0.44 | 1.38 |
| Home Depot (HD) | HD | 0.57 | 1.42 |
As you can see, both Costco and Home Depot have strong financials with low debt levels. This means that they are well-positioned to weather economic downturns.
Here is a table comparing the growth potential of Costco and Home Depot:
| Company | Ticker | Revenue growth (5-year CAGR) | Earnings growth (5-year CAGR) |
|---|---|---|---|
| Costco (COST) | COST | 9.3% | 11.0% |
| Home Depot (HD) | HD | 6.7% | 10.4% |
As you can see, Costco has stronger growth potential than Home Depot. This is likely due to its strong brand loyalty and its focus on offering a wide selection of high-quality products at competitive prices.
Overall, both Costco and Home Depot are strong dividend stocks with a track record of dividend growth. However, Costco is the better choice for investors who are looking for a stock with a lower payout ratio and stronger growth potential.
Please note that this information is not investment advice, and it is important to do your own research before making any investment decisions. Consult with a financial advisor for personalized guidance. Please note that this information is not investment advice, and it is important to do your own research before making any investment decisions. Consult with a financial advisor for personalized guidance.”
Why are they not in your top 15?
Costco and Home Depot are both well-established companies with strong dividend histories and promising growth prospects. However, there are a few reasons why they may not be included in my list of the top 15 dividend stocks for 2024:
- Dividend yield: While Costco’s dividend yield is higher than the average for S&P 500 companies, it is still lower than the dividend yields of many of the companies on my list.
- Payout ratio: Costco has a relatively low payout ratio, which means that it has more flexibility to increase its dividend in the future. However, this also means that its dividend growth may not be as rapid as some of the companies on my list.
- Growth potential: Costco’s revenue and earnings growth have been slower than the growth of some of the companies on my list in recent years. However, its strong brand loyalty and focus on providing high-quality products at competitive prices should continue to drive its growth over the long term.
- Sector diversification: My list of the top 15 dividend stocks is designed to provide investors with a diversified portfolio of dividend-paying stocks across a variety of sectors. Costco and Home Depot are both members of the consumer staples sector, which is already well-represented on my list. I prefer to allocate more of my portfolio to other sectors, such as healthcare, technology, and telecommunications, which may offer more growth potential in the years to come.
Overall, while Costco and Home Depot are both strong dividend stocks, they may not be the best fit for all investors. If you are looking for a dividend stock with a high yield, a low payout ratio, and strong growth potential, you may want to consider some of the other stocks on my list. However, if you are looking for a stable and well-established company with a long history of dividend payments, both Costco and Home Depot are worth considering.
Please note that this information is not investment advice, and it is important to do your own research before making any investment decisions. Consult with a financial advisor for personalized guidance.”
Conclusion
From our last try Google Bard seems to continue improving. It can give reasonable assumptions on general criteria for stock selection that seem congruent with the broad financial analysis. We appreciate Bard’s constant reminder to perform our own due diligence and that it is not investment advice.
Will Bard’s pick outperform? Only time will tell.