Discovering Passive Income Sources? Delight in These 3 Secure Dividend Stocks Surging Between 28% and 42% in the Past Half-Year!
Investors often gravitate towards passive income sources in the form of dividend stocks, seeking safety and limiting market volatility. But every now and then, even the most stodgy companies manage to outperform the market dramatically. Over the past six months, Walmart (WMT 1.31%), Clorox (CLX -1.91%), and Kenvue (KVUE -1.19%) have demonstrated just that, earning impressive gains of 42.5%, 30.4%, and 27.6% respectively. Let's take a look at what's driving their breakouts and whether they are poised to continue delivering dividend raises for years to come.
Breakout performances
Discount retailers like Dollar General and Dollar Tree have been struggling, along with Target which plunged more than 22% following its last earnings report. In stark contrast, Walmart has surged an astounding 72% year to date. But how exactly has a seemingly boring retail giant managed to outperform its competitors so spectacularly?
The secret to Walmart's success lies in its unique approach to delivering everyday value and attracting higher-income consumers. In its most recent quarter, Walmart reported a 5.3% increase in U.S. sales, with notable market share gains in both grocery and general merchandise. What's more, around 75% of Walmart's U.S. market share gains came from households earning over $100,000. This approach has seen Walmart flourish during a time when many other retailers are struggling, as it manages to offer exceptional value without compromising on quality or convenience.
Walmart's success isn't all about pricing, however. The retailer's services such as Walmart+ contactless delivery, Walmart Marketplace, and Walmart Connect, are all thriving, providing ample opportunities for growth. To top it all off, Walmart is leveraging artificial intelligence and machine learning to gain valuable customer insights and improve both the in-store and digital experiences.
Despite its success, Walmart's stock has become more expensive, with the yield falling to just 1%. As a Dividend King with 51 consecutive years of dividend raises, however, Walmart's track record speaks for itself. In February, Walmart raised its dividend by 9%, and analysts expect a double-digit percentage raise in February 2026. So while the lower yield may be off-putting for some, Walmart remains a compelling choice for those looking for growth opportunities in a stable, dividend-paying stock.
Beating expectations at Clorox
With 40 consecutive years of dividend raises and a yield of 2.9%, Clorox stands out as a reliable source of passive income. Although the company has faced its fair share of challenges, its recent surge to an all-time high suggests that the market sees a bright future ahead.
In October, Clorox reported its first-quarter results, raising its full-year earnings guidance and reaffirming organic sales growth of 3% to 5%. While these figures may seem underwhelming, it's worth noting that Wall Street places more weight on a company's prospects than its past performance. Clorox has been through some tough times, including the pandemic, overestimating demand trends, and a cyberattack in 2023. Yet, the company has managed to overcome these challenges, and 2025 is set to be its first "normal year" in some time.
Clorox's stock price has climbed a mere 12.8% over the last five years, suggesting that the market may be beginning to catch up to its growth potential. Investors with a long-term horizon could find value in this high-yield option in the consumer staples sector.
Uncovering value with Kenvue
In August 2023, Johnson & Johnson spun off its low-growth consumer health division, creating a new company called Kenvue. With a focus on personal health solutions and inherited dividend-paying credentials, some investors may be missing out on an intriguing value opportunity.
Although Kenvue is not yet a high-octane growth machine, its ultra-stable nature and indexed yield of 3.4% make it a compelling choice for risk-averse investors. The company is expected to deliver steady dividend growth over time, even if at a slightly slower pace than other options in the market.
In conclusion, the recent breakout performances of Walmart, Clorox, and Kenvue demonstrate that even stodgy, seemingly boring companies can crush the market. Investors seeking income, growth, and stability would be well-served to consider these three stocks as part of their long-term investment strategies.
In light of their impressive breakout performances, investors might consider reallocating some of their finance into these companies, such as Walmart, Clorox, and Kenvue, to capitalize on their potential for continued growth and dividend raises. With Walmart's Dividend King status and Clorox's consistent dividend increases, these stocks can provide both growth and passive income to investors' money portfolios.