Five dividend aristocrats to buy and hold for reliable passive income

– Passive income stocks are likely to get a big boost when interest rates start to fall.

– Dividend Aristocrats, Dividend Aristocrats are safe and reliable stocks to buy and hold.

– Get access to 2 legendary, high-yielding dividend stocks Wall Street loves.

Passive income is characterized by its ability to generate income without requiring the continuous active effort of the income earner, making it a desirable financial strategy for those looking to diversify their income streams or achieve financial independence.

According to the Internal Revenue Service (IRS), passive income generally includes income from rental activities or any trade or business in which the individual does not materially participate. It can also include income from limited partnerships and other similar businesses where the individual is not actively involved.

Investors looking for defensive companies that pay big dividends are drawn to Dividend Aristocrats, and for good reason. The 66 companies that made the cut for the 2024 S&P 500 Dividend Aristocrats list have increased dividends (not just stayed the same) for 25 years running. But the requirements go even further, with the following attributes also mandatory for membership on the Dividend Aristocrats list:

– Companies must be worth at least $3 billion each quarterly rebalancing.

– Average daily volume of at least USD 5 million transactions for each closing three-month period at each quarterly rebalancing date.

– Was a member of the S&P 500

We surveyed 2024 dividend aristocrats looking for the companies Wall Street supports for passive income investors. We found five that investors can buy now and keep forever. All are rated Buy at top Wall Street firms.

Amcor

Amcor provides high-quality, responsible packaging solutions for food, beverage, pharmaceutical and other packaging requirements.

This is a very off-the-radar idea, but it makes sense as it produces products that are always needed and provides a robust 5% dividend. Amcor PLC (NYSE: AMCR) manufactures and sells packaging products in Europe, North America, Latin America, Africa and Asia Pacific.

The company operates in two segments:

– Flexible

– Rigid packaging

The Flexibles segment provides flexible and film packaging products in the food and beverage, medical and pharmaceutical, fresh produce, snacks, personal care and other industries.

The Rigid Packaging segment offers rigid containers for a range of beverage and food products, including:

– Carbonated soft drinks

– water

– Juicer

– Sports drinks

– Milk-based drinks

– Liquor

– oil

– Sauces

– Dressings

– Personal care items

– Plastic caps for various applications.

The company sells its products mainly through its direct sales force.

Chevron

Chevron is an American multinational energy company specializing mainly in oil and gas.

This integrated giant is a safer way for investors to get positioned in the energy sector, and it comes with a rich dividend yield of 4.18%. Chevron Corp (NYSE: CVX) conducts integrated energy and chemical operations worldwide through its subsidiaries.

The company operates in two segments:

– Upstream

– Downstream

The upstream segment is involved in the following:

– Exploration, development, production and transportation of crude oil and natural gas;

– Processing, liquefaction, transportation and regasification associated with liquefied natural gas

– Transportation of crude oil by pipeline

– Transportation, storage and marketing of natural gas, and operation of a gas-to-liquids plant

The downstream segment is engaged in:

– Refining of crude oil into petroleum product

– Marketing of crude oil, refined products and lubricants

– Production and marketing of renewable fuels

– Transportation of crude oil and advanced products by pipeline, marine vessels, motor equipment and railway wagon

– Manufacture and marketing of commodity petrochemicals, industrial plastics, fuel and lubricant additives

Chevron announced last fall that it has entered into a definitive agreement with Hess Corp. (NYSE: HES) to acquire all outstanding shares of Hess in an all-stock transaction worth $53 billion, or $171 per share based on Chevron’s closing price on Oct. 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares in Chevron for each Hess share. The total enterprise value of the transaction, including debt, is $60 billion.

Three lawsuits have been filed against Hess, accused of inadequate disclosure of the sale, and Chevron has said arbitration over Hess’s Guyana assets could delay the timeline for closure to October 2025. But most Wall Street analysts feel the deal will ultimately get done, and Chevron will become even more powerful in the energy sector.

Warren Buffett’s Berkshire Hathaway owns 6.7% of Chevron’s outstanding shares with 122,980,207 shares and the energy giant makes up 5.1% of the portfolio. Each year, the stock generates $776,734,888 in dividend income for Berkshire Hathaway.

Franklin Resources

Franklin Resources, one of the world’s largest investment managers, is better known as Franklin Templeton.

This company is a powerhouse for mutual funds, paying a safe and secure dividend of 5.42%. Franklin Resources Inc (NYSE: BEN) is among the most prominent global asset managers.

The company markets mutual funds and institutional separate accounts under the Franklin, Templeton and Mutual Series brands. Sometimes 50% of sales come from outside the US, an advantage given the mature US market.

Franklin Resources offers its products and services under these brands:

– Franklin

– Templeton

– Franklin Mutual Series

– Franklin Bissett

– Fiduciary Trust

– Darby

– Balanced Equity Management

– K2

– LibertyShares

– Edinburgh Partners

The 2023-2024 bull market has proven to be a solid tailwind for the company. While withdrawals from baby boomers may be a problem, the road ahead looks solid.

IBM

IBM, nicknamed Big Blue, is an American multinational technology company.

The old blue chip tech giant pays a solid 3.95% dividend, offering conservative investors a safer way to play the industry. International Business Machines Corp (NYSE: IBM), together with its subsidiaries, provides integrated solutions and services worldwide.

The company operates in four segments:

– Software

– Consulting activities

– infrastructure

– Funding and financing

The Software segment offers a hybrid cloud and AI platforms that enable customers to realize their digital and AI transformations across the applications, data and environments in which they operate.

The Consulting segment focuses on skills integration for strategy, experience, technology and operations by domain and industry.

The Infrastructure segment provides on-premises and cloud-based server and storage solutions, as well as lifecycle services for the deployment of hybrid cloud infrastructure.

The Financing segment offers customer and commercial financing, facilitating IBM customers’ acquisition of hardware, software and services.

The company has a strategic partnership with various companies including:

– Hyperscalers

– Service providers

– Global system integrators

– Software and hardware providers such as Adobe, Amazon Web Services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP

Realty Income

Realty Income invests in single-tenant, stand-alone commercial properties in the United States, Spain and the United Kingdom.

This is an ideal stock for growth and income investors looking for a safer contrarian idea for the rest of 2024 that pays a whopping 5.78% dividend. Realty Income Corp (NYSE:O) is an S&P 500 company that provides shareholders with a reliable monthly income.

The company is structured as a REIT, and its monthly distributions are supported by the cash flow from over 15,540 properties owned under long-term leases with commercial tenants.

The company has declared 644 consecutive monthly common stock dividends over its 55-year operating history, increasing its dividend 123 times since Realty Incomes’ 1994 IPO. It is a top real estate member of the S&P 500 Dividend Aristocrats index.

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