After what seemed like a slam-dunk victory for former President Donald Trump, circumstances in the political realm have become much more exciting. It’s not entirely clear that Vice President Kamala Harris can do enough to change the dynamics of the race to her favor. Still, polling data shows that she’s closing the gap to Trump. And that augurs well for stable dividend stocks.
By the next few weeks, who knows? The race could look much different. Given how contentious the entire electoral environment is, one can expect hard feelings to rise to the forefront. Certainly, with the nation being so binary in its ideologies and viewpoints, no matter who wins out, the other side might not take kindly to the matter.
Obviously, Wall Street isn’t going to provide social healing. However, it does offer a place to protect your money. About the only guarantee is heightened tensions. With that in mind, it’s time to turn to stable dividend stocks.
Waste Management (WM)
A company that arguably has the most self-explanatory name ever, Waste Management (NYSE:WM) makes for a great case for stable dividend stocks. It’s not a generous idea by any means, with a forward yield of only 1.48%. However, it’s a consistent player, providing a five-year average yield of 1.65%. In addition, the payout ratio is modest at 46.1%, meaning that yield sustainability concerns should be muted.
Also, let’s not forget the most important factor (at least in my opinion): the narrative is permanently relevant. Humans consume stuff and they produce waste. That’s just reality. Unfortunately, there’s only so many things that can be done with the rubbish. Waste Management enjoys the specialized acumen along with the regulatory approval to run such a business.
To be fair, WM stock isn’t particularly cheap, trading at 3.9X trailing-year sales. However, analysts expect steady growth over the next two years. By the end of fiscal 2025, they’re projecting revenue to land at $23.42 billion. In contrast, 2023 sales sat at $20.43 billion. WM isn’t exciting but it makes for a sensible candidate for stable dividend stocks.
Procter & Gamble (PG)
A popular consumer goods giant, Procter & Gamble (NYSE:PG) makes for another sensible example for stable dividend stocks. People use products like toilet paper and soap every day. Therefore, P&G enjoys maximum predictability. As with Waste Management, I wouldn’t classify the entity as generous. However, it does offer a forward yield of 2.5%. In addition, its five-year trailing average yield comes in at 2.41%.
Another factor that benefits P&G is brand recognition and loyalty. If a child grows up with P&G products, he or she may carry this forward if they decide to start a family of their own. This predictability is evident in the company’s financials. In the past four quarters, it averaged earnings per share of $1.65, beating the consensus view of $1.55.
Now, PG stock isn’t cheap, trading hands at 4.73X trailing-year revenue. In the past year, the metric landed at 4.44X. However, analysts see slow and steady growth over the next two years. By the end of fiscal 2026 (calendar 2025), revenue could reach $89.76 billion. That’s noticeably better than 2023’s print of $84.04 billion.
Home Depot (HD)
Home-improvement retailer Home Depot (NYSE:HD) makes an excellent case for stable dividend stocks thanks to its holistic dependability. Stuff goes wrong all the time, making the business indispensable. Also, it’s open (when feasible) during inclement conditions, thereby representing a pillar of the community. Right now, the company offers a forward yield of 2.44%. Its payout ratio comes in at a relatively modest 57.1%.
As you might expect, one of Home Depot’s core attributes is consistency. In the past four quarters, the retailer generated an average EPS of $3.73. This figure beat out the consensus view of $3.64, yielding an average earnings surprise of 2.15%. It’s worth clarifying that it did beat all four quarters and did not depend on any one outstanding performance.
To be sure, HD stock has gotten a bit pricier. In the past year, its sales multiple sat at 2.14X. Right now, it’s coming in at 2.42X. That said, covering experts believe in consistent growth over the next two years. By the end of fiscal 2025 (calendar 2025), sales could land at $165.16 billion. That’s above 2023’s haul of $152.67 billion.
McDonald’s (MCD)
Fast-food giant McDonald’s (NYSE:MCD) makes for a compelling idea for stable dividend stocks. No, salty, greasy burgers and fries aren’t good for your health. But man — they sure are addictive! Not only that, people need a quick pick-me-up occasionally and the Golden Arches fills that demand. It also fills you with passive income, offering a forward yield of 2.52%. Notably, its five-year trailing yield comes in at 2.25%.
If I’m being honest, McDonald’s has witnessed some shaky performances recently. True, in the past four quarters since the second quarter, MCD’s average EPS landed at $2.91. This figure beat the consensus view of $2.86, yielding an earnings surprise of 1.7%. However, misses in Q1 and Q2 of this year made the average beat tighter than necessary.
Relatively speaking, though, MCD has become more attractive. It’s still pricey but with a sales multiple of 7.49X, it’s actually lower than the prior year’s average of 8.56X. By the end of the current fiscal year, revenue may rise to $26.14 billion. That would be up 9.8% from last year, thus offering investors a mix of growth and income.
American Water Works (AWK)
Water is the most precious resource and that gives American Water Works (NYSE:AWK) natural legitimacy as one of the stable dividend stocks. Providing water and wastewater management services to several communities, AWK is an integral component of the economy. To be fair, the company’s forward dividend yield of 2.15% isn’t anything to write home about. Nevertheless, you’re getting a truly dependable narrative here.
One caveat exists with AWK stock: the underlying financial performance has been a bit shaky. In the past year since Q2, the utility posted an average EPS of $1.22. This figure missed the average consensus view of $1.23. Sizable misses in the first half of this year raised eyebrows. Nevertheless, American is a utility meaning that it enjoys a natural monopoly.
I wouldn’t classify AWK stock as cheap because it’s not. Currently, shares trade hands at 6.38X sales. That’s above the prior year’s metric of 5.79X. However, experts are also looking at steady growth. By end of fiscal 2025, sales could be $4.76 billion. That’s up a decent amount from last year’s $4.23 billion.
Sempra (SRE)
Sticking with the utility theme, another idea among stable dividend stocks to consider is Sempra (NYSE:SRE). Think about the company’s hometown San Diego Padres baseball team and how deeply the city loves the ballclub. You got that image in your head? Now, imagine the exact opposite of that and that’s basically Sempra. Still, here’s why investors love SRE stock: it offers a forward yield of 3.1%. The payout ratio isn’t bad either at 53.21%.
Before my fellow San Diegans get the pitchforks out, I’m not here to sing the praises of Sempra. As a consumer, utilities stink. It’s just the reality of this love-hate affair. However, as an investor, it’s generally more on the love side because of the underlying predictability. In the past year since Q1, it beat all four of its EPS targets. The company just released Q2 results, posting earnings of $1.91 per diluted share.
SRE stock has been on the move recently and so it’s not cheap. We’re talking 3.68X sales, which compares to the prior year’s average of 2.69X. Still, I’m liking the steady profitability expansion. By the end of fiscal 2025, EPS could be $5.16 on revenue of $16.64 billion. Last year, Sempra posted EPS of $4.61 on sales of $16.72 billion.
Realty Income (O)
If you’re a fan of stable dividend stocks, Realty Income (NYSE:O) may be right up your alley. Structured as a real estate investment trust, or REIT, Realty Income generates cash flow from over 15,450 properties, per its profile. It pays out a very generous yield of 5.5%. Further, its five-year yield lands at 4.64%. Best of all, the REIT pays out monthly. With enough in the tank, you can use it to pay your bills.
Another reason to consider O stock is the underlying utility of the business. From pharmacies to home-improvement retailers, Realty covers it all. Therefore, it’s technically one of the most relevant ideas you can consider. That being said, it’s a bit on the wild side when it comes to the financials. In the past year since Q1, the company posted an average EPS of 27 cents, missing the consensus view of 34 cents.
Also, O stock isn’t cheap, trading hands at 9.62X sales. It also trades at 38.31X forward earnings. That said, analysts are looking for EPS to rise to $1.35 by year’s end. Sales could also jump 23.2% to $5.03 billion.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor held a LONG position in PG and O stock.