Growth stocks have fought their way back into the lead over the past few weeks, largely at the expense of other groups. If your chief investment goal is income, not only does this not matter, but it ultimately spells opportunity. It means you can get into some new dividend payers at a relatively more affordable price.
If you have $2,000 available to invest that isn’t needed for an emergency fund or to pay off monthly bills, here are three dividend stocks you might want to consider investing in.
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Coca-Cola is one of investors’ favorite dividend stocks within the consumer staples sector, and certainly within the beverage space. Conversely, shares of rival PepsiCo (NASDAQ: PEP) have underperformed since 2023, mostly due to weakness in its snack chip arm Frito-Lay.
There may finally be a light at the end of the tunnel, however. Helped by innovation along with price cuts, last quarter’s companywide organic revenue grew 2.6%, in line with top-line growth from its North American food business. Earnings and revenue also both topped analysts’ expectations.
One good quarter doesn’t necessarily mark the beginning of a trend. All trends start with one quarter, though. Given that PepsiCo stock’s recent lethargy has allowed its forward-looking dividend yield to edge up to 3.7% versus Coca-Cola’s 2.8%, there’s a bit of added upside in betting that PepsiCo has indeed turned the corner.
Although it happened nearly two years ago, many investors still may not realize drugmaker Johnson & Johnson spun off its over-the-counter and personal care business into a company called Kenvue (NYSE: KVUE), which now wholly manages familiar brands like Tylenol, Listerine, Band-Aid, and Zyrtec.
It’s clearly not a growth business. Single-digit revenue growth is the norm here, if that. But it’s a business that’s ideally suited to support reliable, recurring dividends. These are goods that most households buy repeatedly. You can buy into this cash-generating business while the stock’s forward-looking dividend yield stands at 4.8%, thanks to last year’s mostly unmerited pullback.
Kenvue will soon be merging with Kimberly-Clark, by the way, creating a true consumables powerhouse. This won’t actually change much for the dividend, though. Kimberly-Clark’s forward-looking dividend yield is a comparable 5.2%. You just want to be on this side of the pairing before it finalizes later this year, since it prices Kenvue at a bit above its current value.
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