Uncertainty regarding the conflict in Iran has weighed on the stock market over the past couple of months — and though the S&P 500 rebounded in recent days and even hit new highs, the turbulence may not be over. Investors have watched every move along the path to peace between the U.S. and Iran, and any setback may be a reason for a pullback in stocks, particularly those most linked to economic growth.
How should investors handle such an environment? It’s always important to remember that investing is a long-term endeavor, so fluctuations in quality stocks over a period of weeks or months generally won’t impact your returns by much. Meanwhile, during these tough times, it’s a great idea to add a few dividend stocks to your portfolio, as they will offer you passive income — no matter what the market is doing.
With this in mind, let’s check out three surefire dividend stocks to buy now.
Image source: Getty Images.
1. Coca-Cola
You can count on Coca-Cola (KO 0.34%) for a beverage in 200 countries and territories around the world –and you can count on the stock for passive income. That’s because this non-alcoholic beverage behemoth is a Dividend King, having lifted its dividend for at least 50 consecutive years. This is positive because it shows commitment to sharing successes with shareholders, suggesting the company will keep the trend going.
Coca-Cola pays a dividend of $2.06 per share, for a 2.7% dividend yield, which largely beats the yield of the S&P 500.
S&P 500 Dividend Yield data by YCharts
While investors collect this regular income, they’ll also like the fact that Coca-Cola offers them the security of steady earnings growth over time. The company has a fantastic moat, or competitive advantage, in the form of its brands — from the eponymous Coca-Cola to other top brands like Minute Maid juices. And the beverage maker’s powerful distribution network offers a competitive advantage too.
Coca-Cola also focuses on innovation, considering the evolution of the general market and the tastes of specific markets. All of this makes this stock an evergreen player to add to your portfolio.
2. Walmart
Walmart (WMT +0.33%) has seen significant successes in recent years, thanks to its focus on value and categories that work during any economic environment — such as grocery and pharmacy.
The company is also posting gains due to growth in its e-commerce business, its Walmart+ membership service, and its advertising business, Walmart Connect. (Walmart Connect allows brands to promote their products within Walmart stores and across its digital network.) These areas could represent significant growth drivers for the company over time.
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In the recent quarter, Walmart’s global membership fee revenue advanced 15%, and in the U.S., the company posted a 41% gain in Walmart Connect.
On top of this strong earnings performance, shareholders also benefit from a proven track record of dividend payments — like Coca-Cola, Walmart is a Dividend King. Walmart pays a dividend of 99 cents a share, representing a yield of 0.7%. It may not be the highest-yielding stock, but I like Walmart for its balance of dividend payments and overall earnings growth potential in the years to come.
3. Target
Target (TGT +1.83%) has faced a variety of challenges in recent years, but the company today is well-positioned for a turnaround. The retailer has cut costs and eliminated jobs, and earlier this year, longtime Target executive Michael Fiddelke took on the role of chief executive officer — and set out a growth plan.
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The company is investing $2 billion this year in several efforts, including revamping store displays, training employees, and improving the selection of items shoppers will find on the shelves. It’s important to remember that, even though Target’s growth has stagnated in recent times, it’s gained and maintained $30 billion in annual revenue growth, from pre-pandemic days through today.
TGT Revenue (Annual) data by YCharts
Considering all of this, Target could offer shareholders a return to growth in the coming quarters — and this retail stock also is a Dividend King, with a $4.56 payment at a yield of 3.5%. So, an investment in Target today could offer you a fantastic recovery story bet as well as the security of passive income growth over the years to come.
