Three Secure Dividend Shares to Invest in for 2025 and Beyond's Future
Dividend cuts can be a harsh blow for an investor focused on income. It means losing a portion of your passive income, and a dividend stock's price often drops significantly before and after the payout reduction. To avoid this, it's essential to focus on companies that have solidly fortified their dividend payments.
Three such stocks that offer not just safety but also above-average payouts are Johnson & Johnson (JNJ), ExxonMobil (XOM), and Realty Income (O). These sturdy dividend stocks are excellent choices for income-seekers looking for security in the coming years.
Johnson & Johnson is a financial fortress, boasting a AAA bond rating, only shared with a few other companies, including the U.S. government. This healthcare giant had a market cap of over $355 billion in the third quarter, holding $20 billion in cash against $36 billion in debt. With a manageable net debt, a free cash flow of $14 billion, and an elite record of growing its dividend for 62 consecutive years, Johnson & Johnson has secured its place as a Dividend King. The stock currently offers a yield of nearly 3.5%, far surpassing the S&P 500's average yield of 1.2%.
ExxonMobil, an oil stock, may not seem like an ideal candidate for dividend safety due to market volatility and the global push for cleaner energy alternatives. However, ExxonMobil stands out as the undisputed leader of the oil patch. In the third quarter of 2024, Exxon led all international oil companies in earnings ($8.6 billion) and cash flow from operations ($17.6 billion). After covering capital spending, it generated a substantial $11.3 billion in free cash flow. Exxon's 42-year streak of dividend growth and its elite balance sheet make its dividend even more secure.
Realty Income, a real estate investment trust (REIT), is a steady income machine, having increased its dividend annually for 30 straight years, covering 109 consecutive quarters. Realty Income’s globally diverse portfolio of net-leased commercial real estate provides a stable cash flow, supporting its high-yielding dividend. With a sound financial profile, Realty Income remains a reliable candidate for investors seeking secure income streams.
In conclusion, despite various market challenges, Johnson & Johnson, ExxonMobil, and Realty Income remain dependable choices for investors seeking sturdy income streams. Their strong financial foundations, impressive track records, and growth potential render them excellent picks for the coming years.
Investing in Johnson & Johnson, with its AAA bond rating and a history of dividend growth for 62 consecutive years, can provide a secure income stream and a yield of nearly 3.5%, surpassing the S&P 500's average yield.
In the world of finance, focusing on companies like ExxonMobil, despite market volatility, can prove to be a wise decision due to its balanced financial position, 42-year streak of dividend growth, and elite balance sheet, ensuring a secure dividend.