Even if the overall market extends its current bull market, that doesn't mean you can't find high-dividend stocks. You just need to be more selective. If you're a long-term investor looking for buy-and-hold income stocks, you should dig deep. chevron (NYSE:CVX), NextEra Energy (NYSE:Nee)Dividend King stanley black and decker (NYSE:SWK). Let's take a quick look at each here.
1. Chevron has an industry-leading foundation
Chevron is one of the largest integrated energy companies on the planet. Its operations range from oil production to transportation and processing. And we have a globally diversified portfolio. This diversification helps alleviate the inherent volatility in the energy sector. However, there are other companies that do similar business. exxon mobil (NYSE:XOM). What makes Chevron unique is its financial strength.
Looking at Chevron's balance sheet, we see that it has a debt-to-equity ratio of 0.12x, which is lower than its closest peers. This is important. Because during an energy downturn, Chevron has the leverage to continue supporting its business and dividends. Simply put, it has more room than its competitors. It is worth noting that the company has increased its dividend every year for 36 consecutive years, and the dividend yield is quite high at 4.1%. By comparison, Exxon, the company with the next strongest balance sheet, yields just 3.1%.
2. NextEra Energy is like buying two companies in one.
NextEra Energy is one of the largest regulated utility companies in the United States. And it is one of the world's largest producers of solar and wind power. The company's regulated assets, including Florida Power & Light, provide a strong foundation, albeit with relatively slow growth. The clean energy side is a growth platform. Together, the companies have been able to increase their dividends by 10% per year over the past decade. This is significant dividend growth for a power company. Management expects this level of dividend growth to continue through at least 2026.
What's interesting is that both of its core businesses are lucrative. Florida Power & Light has long benefited from moving to the Sunshine State. More customers means more revenue and more regulatory-approved capital investment opportunities. And as the world gradually transitions away from carbon fuels, renewable electricity has a long road to growth. The capacity on this side of the business is 36 gigawatts, with plans to expand by another 32 to 41 gigawatts by 2026. This combination of businesses has allowed NextEra Energy to increase its dividend every year for 29 years, and this dividend growth stock currently has a historically attractive 3.2% dividend yield.
3. Stanley Black & Decker is currently unsupported.
Stanley Black & Decker is the Dividend King with 56 annual dividend increases. However, the past few years have been extremely difficult for the company, with adjusted earnings dropping from a record $10.48 per share in 2021 to just $1.45 per share in 2023. Management is working on a turnaround and says the stock is ideal for further investment. Active investor. But what's notable is that the stock is down about 55% from its 2021 high.
This decline has pushed the dividend yield, currently around 3.2%, toward an all-time high. The big story is that his cost-cutting, streamlining, and debt-reduction efforts will begin to bear fruit in 2024. The company expects adjusted earnings to eventually start increasing again. Current company guidance calls for 2024 adjusted earnings in the range of $3.50 to $4.50 per share. This is evidenced by the steady improvement in the company's profit margin. There's still time to jump into this resurgent dividend king if you act now.
There are bull market options for every type of dividend investor
Chevron, NextEra Energy, and Stanley Black & Decker are just three examples of attractive dividend stocks you can find today. What's interesting about this trio is that they offer different things to different types of investors. Chevron is a high-yield rock in a turbulent industry. NextEra Energy is a dividend growth machine in a typically low-growth sector. And Stanley Black & Decker are fallen angels who may soon begin to regain their wings.
Should you invest $1,000 in NextEra Energy now?
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Reuben Gregg Brewer holds a position at Stanley Black & Decker. The Motley Fool has a position in and recommends Chevron and NextEra Energy. The Motley Fool has a disclosure policy.
Bull Market Buys: 3 Dividend Stocks to Own for the Long Run was originally published by The Motley Fool.
