One of the best ways for investors to save for the future and retirement is to consistently invest money into tax-sheltered vehicles, whether it be in company-sponsored 401-K plans or self-directed individual retirement accounts.
The reality for those 35 to 45 years old and starting to make serious career money is that while social security is likely still there in their golden years, the goalposts will undoubtedly get moved way back. With that as a potential prospect, pouring money into retirement savings accounts can help mitigate the worries about future changes for social security, which for many isn’t enough to live on anyway.
One solid choice for investors self-directing their IRAs and Roth IRAs is to look at the Dividend Aristocrats. The 66 companies that made the cut for the 2024 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. 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 at the time of each quarterly rebalancing
- Average daily volume of at least $5 million in transactions for every trailing three-month period at every quarterly rebalancing date
- Be a member of the S&P 500
With the potential for massive downside still looming and interest rates staying higher, we decided to look for companies on the Dividend Aristocrats that pay among the most significant dividends that investors can buy now and hold forever in retirement accounts.
3M
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This top company could jump with an economic pick-up and pay a very rich 5.57% dividend. 3M Company (NYSE: MMM) is a diversified technology company worldwide.
It operates through four segments:
- Safety and Industrial
- Transportation and Electronics
- Health Care
- Consumer
The Safety and Industrial segment offers:
- Industrial abrasives and finishing for metalworking applications
- Auto body repair solutions
- Closure systems for personal hygiene products
Masking and packaging materials - Electrical products and materials for construction and maintenance
- Power distribution and electrical original equipment manufacturers
- Structural adhesives and tapes
- Respiratory, hearing, eye, and fall protection solutions
- Natural and color-coated mineral granules for shingles
The 3M Transportation and Electronics segment provides:
- Ceramic solutions
- Attachment tapes
- Films
- Sound and temperature management for vehicles
- Premium large-format graphic films for advertising and fleet signage
- Light management films and electronics assembly solutions
- Packaging and interconnection solutions
- Reflective signage for highway and vehicle safety
Italy, the company’s Healthcare segment offers:
- Food safety indicator solutions
- Healthcare procedure coding and reimbursement software
- Skin, wound care, and infection prevention products and solutions
- Dentistry and orthodontic solutions
- Filtration and purification systems.
The Consumer segment provides:
- Consumer bandages
- Braces, supports, and respirators
- Home cleaning products
- Retail abrasives and paint accessories
- Car care DIY products;
- Picture hanging and consumer air quality solutions
- Stationery products
It offers its products through e-commerce and traditional wholesalers, retailers, jobbers, distributors, and dealers.
Amcor
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This is a very off-the-radar idea that pays a stellar 5.28% dividend and makes sense as they produce products that are always needed and in demand. Amcor plc (NYSE: AMCR) manufactures and sells packaging products in:
- Europe
- North America
- Latin America, Africa
- Asia Pacific regions
The company operates through two segments:
- Flexibles
- Rigid Packaging
The Flexibles segment provides flexible and film packaging products in:
- Food and beverage
- Medical and pharmaceutical
- Fresh produce
- Snack food
- Personal care
- Other industries
The Rigid Packaging segment offers rigid containers for a range of beverage and food products, including:
- Carbonated soft drinks
- Water
- Juices
- Sports drinks
- Milk-based beverages
- Spirits and beer
- Sauces
- Dressings
- Spreads
- Personal care items
- Plastic caps for various applications
- The company sells its products primarily through its direct sales force.
Essex Property Trust
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This stock is an outstanding way for investors looking to add an inflation-busting real estate position that pays a hefty 3.84% dividend. Essex Property Trust, Inc. (NYSE: ESS) an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets.
Essex has ownership interests in 252 apartment communities comprising approximately 62,000 apartment homes, with six additional properties in various stages of active development.
Exxon Mobil
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This mega-cap energy giant pays a solid 3.92% dividend and is the perfect energy idea to buy and hold forever. Exxon Mobil Corporation (NYSE: XOM) explores and produces crude oil and natural gas in the United States and internationally.
It operates through four segments:
- Upstream,
- Energy Products,
- Chemical Products, and
- Specialty Products segments
The Upstream segment explores and produces crude oil and natural gas.
The Energy Products segment offers:
- fuels
- aromatics
- catalysts
- licensing services
The Chemical Products segment manufactures and markets petrochemicals, including olefins, polyolefins, and intermediates.
The Specialty Products segment offers performance products, including:
- Lubricants
- Base stocks
- Waxes
- Synthetics
- Elastomers
- Resins
The company is involved in the manufacturing trade, transporting, and selling of crude oil, natural gas, petroleum products, petrochemicals, and other specialty products and pursues lower-emission business opportunities, including carbon capture and storage, hydrogen, and lower-emission fuels.
Exxon Mobil and Pioneer Natural Resources (NYSE: PXD) jointly announced last October a definitive agreement for ExxonMobil to acquire Pioneer. The merger is an all-stock transaction valued at $59.5 billion, or $253 per share, based on ExxonMobil’s closing price on October 5, 2023. Under the terms of the agreement, Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing. The implied total enterprise value of the transaction, including net debt, is approximately $64.5 billion.
Franklin Resources
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This company is a mutual fund powerhouse and continues to grow its vast asset base while paying a rich 4.44% dividend. Franklin Resources Inc (NYSE: BEN) is among the most prominent global managers.
The firm markets mutual funds and institutional separate accounts under Franklin, Templeton, and Mutual Series brands. At times 50% of its sales are from outside the US, an advantage given a maturing US market.
Franklin Resources offers its products and services under the brands of:
- Franklin
- Templeton
- Franklin Mutual Series
- Franklin Bissett
- Fiduciary Trust
- Darby
- Balanced Equity Management
- K2
- LibertyShares
- Edinburgh Partners
IBM
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This blue-chip giant still offers investors a solid entry point, a solid 3.87% dividend, and safety for more conservative investors. International Business Machines (NYSE: IBM) provides integrated solutions and services worldwide.
The company operates through four business segments:
- Software
- Consulting
- Infrastructure
- Financing
The Software segment offers hybrid cloud platforms and software solutions, such as:
- Red Hat, an enterprise open-source solution
- Software for business automation
- AIOps and management, integration, and application servers
- Data and artificial intelligence solutions
- Security software and services for threat, data, and identity
- This segment also provides transaction processing software that supports clients’ mission-critical and on-premise workloads in the banking, airline, and retail industries.
The consulting segment offers:
- Business transformation services and strategy
- Business process design and operations
- Data and analytics
- System Integration
- Technology consulting and application
- Cloud platform services
The Infrastructure segment provides:
- On-premises and cloud-based server and storage solutions for its clients’ mission-critical and regulated workloads
- Support services and solutions for hybrid cloud infrastructure and remanufacturing
- Remarketing services for used equipment
The financing segment offers:
- Lea45
- Installment payment
- Loan Financing
- Short-term working capital financing services
Realty Income
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This is another ideal stock for growth and income investors looking for a safer contrarian idea for 2024 that pays a whopping 5.45% dividend. Realty Income Corporation (NYSE: O) is an S&P 500 company that provides stockholders with dependable monthly income.
The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 13,250 real estate properties owned under long-term lease agreements with commercial tenants.
The company has declared 640 consecutive common stock monthly dividends throughout its 54-year operating history and increased the dividend 122 times since Realty Income’s public listing in 1994. It is a top real estate member of the S&P 500 Dividend Aristocrats index.
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