With many experts continuing to see rocky times ahead For the stock market, it might be time to look at dividend stocks for 2023.
Dividend stocks are a way to diversify a portfolio that may be too obsessively chasing growth. They generate income in good times, in bad and, what is particularly important today, in times of high inflation. (US consumer prices rose 7.7% in October from a year earlier.)
They also tend to outperform the S&P 500 over the long term.
One notable portfolio that has a large number of dividend stocks belongs to The Bill & Melinda Gates Foundation Trust. Since the trust is used to pay for so many initiatives, income must continue to flow into it.
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Dividend Stocks Help make it happen.
Here are three dividend stocks that take up significant space in foundation holdings.
Waste Management (WM)
It’s not the most glamorous industry, but waste management is essential.
Whatever happens to the economy, municipalities have no choice but to pay companies to dispose of our mountains of trash, even if those costs go up.
As one of the largest players in the space, Waste Management remains in an entrenched position.
The shares have almost doubled in the last five years. In the first nine months of 2022, operating income grew 11% year-over-year.
Currently offering a yield of 1.6%, Waste Management’s dividend has risen 19 years in a row.
The company has paid nearly $1 billion in dividends over the past year, and its free cash flow of approximately $2.5 billion for 2021 means investors shouldn’t have to worry about receiving their checks.
As a company whose fortunes tend to follow that of the broader economy (that will be when your equipment is a fixture on construction sites around the world), Caterpillar finds itself in an intriguing post-pandemic position.
The company’s revenues are feeling the pinch of a crippled global supply chain, but President Joe Biden’s $1.2 trillion infrastructure bill means there could be a lot of construction in the US in the near future.
Caterpillar’s mining and energy businesses also provide exposure to raw materials, which tend to doing well in times of high inflation.
The company’s shares have driven up commodity and oil prices by more than 60% in the past five years.
After announcing an 8% increase in June, Caterpillar’s quarterly dividend is currently at $1.20 per share and offers a yield of 2.0%. The company has increased its annual dividend for 28 consecutive years.
With grocery stores considered essential businesses, Walmart was able to keep its more than 4,700 US stores open during the pandemic.
Not only has the company increased profits and market share since COVID coughed up the entire planet, but its reputation as a low-cost haven makes Walmart the retailer many consumers turn to when prices are rising.
Walmart has consistently increased its dividend for the past 49 years. His annual payment is currently $2.24 per share, which translates to a dividend yield of 1.5%.
Walmart is currently trading at $153 per share, up from its 52-week high of $160.77 set in April.
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This article is for information only and should not be construed as advice. It is provided without warranty of any kind.