The stock market is known for its volatility. And after a sizzling 2021, the down days have returned with force this year. However, while prices can go up and down, dividends are constant. So it is unsurprising that investors are hunting for the best dividend stocks for passive income.
In fact, these seven dividend stocks have increased their dividend payouts for at least 25 consecutive years in a row. That makes them part of the small group of Dividend Aristocrats which have accomplished that feat. On top of that, all seven of the best dividend stocks for passive income pay a dividend yield of at least 3.5% today. So, these names give both a strong starting yield and an annual increase to the payout. Let’s dive into these seven best dividend stocks for passive income!
|WBA||Walgreens Boots Alliance||$38.88|
Dividend Stocks for Passive Income: Walgreens Boots Alliance (WBA)
Retail is generally perceived to be a difficult industry. Consumer preferences and fashions change quickly. Some niches are more resilient, however, with the pharmacy sector being right up there. As the has pandemic shown, a company like Walgreens Boots Alliance (NYSE:WBA) is an essential service at all times.
The healthcare industry continues to evolve and some investors are nervous about Walgreens’ role in that future. However, for a variety of logistical and regulatory reasons, pharmacy isn’t an area particularly well-suited to e-commerce. And people like to see a pharmacist when making many important healthcare decisions.
Long story short, Walgreens will likely continue increasing its dividend for investors in the years to come, just as it has done over the past 47. Meanwhile, WBA stock offers an invigorating 4.8% dividend yield.
Exxon Mobil (XOM)
Exxon Mobil (NYSE:XOM) is the largest oil and gas company in North America. It has outperformed its rivals over the decades due to management’s discipline and shrewd capital allocation. While other management teams have chased trends and fads, Exxon Mobil has stuck to its core strategy.
In the late 2010s, that involved Exxon Mobil investing more capital into oil and gas while the industry was in a bust. Analysts decried the move. Fast forward five years and Exxon Mobil’s new Guyana offshore oil field is an absolute cash flow gusher. The company’s refining and chemicals holdings are also offering record profits in the current inflationary environment.
Don’t overthink it. Exxon Mobil has been paying an increasing dividend for decades now despite various energy busts. The company is second-to-none in its industry and oil is now in a major new bull market.
Dividend Stocks for Passive Income: VF Corp (VFC)
VF Corp (NYSE:VFC) is one of the nation’s larger apparel companies, with a focus on outdoor and leisure apparel. The company’s unique property is that it operates as a conglomerate. It owns more than a dozen different brands including the likes of Vans, The North Face, Timberland, Dickies, and JanSport.
VF has a history of buying brands when they are at a low point and growing and/or rehabilitating them. It then sometimes sells or spins them off at far higher valuations once they have picked up steam. Additionally, the collection of different brands and demographics ensures that something is always selling well across the company’s ecosystem.
VFC stock has dropped by nearly half off its 2021 highs. The usual concerns around inflation, supply chains, and a slowdown in consumer spending apply. However, VF is a Dividend Aristocrat with a long history of navigating the economic cycle. Meanwhile, shares now yield 4.3%.
Federal Realty Investment Trust (FRT)
Federal Realty (NYSE:FRT) is the longest-running Dividend Aristocrat within the real estate investment trust (or REIT) category. Incredibly, it has increased its dividend every year since 1968. That’s right, this high-end shopping center and mixed-use property owner kept increasing its dividend during the 1970s inflation, the late 1980s savings and loan crisis, the 9/11 attacks, the 2008 property meltdown, and the Covid-19 pandemic.
The critics will say that Federal Realty’s 54-year streak will come to an end thanks to e-commerce. But what they’re missing is that Federal Realty only owns properties in top-tier markets such as New York, Miami and Los Angeles. It only owns the top-tier properties in those markets, and it has proactively redeveloped areas to incorporate housing and other mixed-use concepts into its properties. It’s a cut above the other mall and shopping center players.
With the current panic over interest rates and recession, FRT stock has slumped from $140 to $105. With that drop, FRT stock is now yielding a juicy 4%.
Dividend Stocks for Passive Income: Realty Income (O)
Realty Income (NYSE:O) is a leading triple net lease REIT. Triple net leases are attractive because the tenant, not the landlord, pays property tax, maintenance costs, and insurance premiums. This gives the landlord a steadier cash flow picture.
Realty Income has leveraged this feature to tremendous success over the decades. It obtains capital at a low cost and puts it into triple net lease deals with high-quality tenants such as Walgreens. These leases typically go on for a decade or longer, giving Realty Income an incredibly stable and reliable cash flow stream.
The REIT shares that cash flow with its investors. Realty Income has increased its dividend for more than 25 years in a row. Additionally, its dividend is paid out monthly giving investors an especially welcome income stream.
Along with Exxon Mobil, Chevron (NYSE:CVX) is the other leading dividend champion in the oil and gas space. Chevron was able to keep its dividend growth rolling even during the dog days for the industry between 2014 and 2020.
Now, the company’s balanced approach to oil and gas is paying off in a big way. In particular, the firm’s investments in liquified natural gas (or LNG) are looking particularly lucrative. With the invasion of Ukraine, gas supplies from Russia are now in serious doubt. This gives Chevron a unique opportunity to meet the moment and help fill the gap in a vital market.
CVX stock has rallied considerably over the past year. Even so, it remains a value. Shares are going for less than nine times forward earnings and offer a 3.5% dividend yield.
Dividend Stocks for Passive Income: Amcor (AMCR)
Amcor (NYSE:AMCR) is one of the world’s leading packaging companies. It makes a vast array of packages for foods, beverages, pharmaceutical products, personal care items and more.
Traditionally, the industry has been associated with plastic waste and environmental concerns. However, Amcor has been a leader in using new materials and formats to reduce environmental impact. The company’s massive operating scale and innovative product designs have led to decades of industry leadership for Amcor.
It has converted that into 38 years of consecutive dividend growth. The company aims for double-digit annualized returns between its earnings growth and the dividend. AMCR stock’s dividend yield is a sturdy 3.8% today.
On the date of publication, Ian Bezek held a long position in VFC and XOM stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.