Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.
While many investors had hoped for a cut in the Fed-Funds rate in March, the booming stock market, strong employment numbers, and a rise in the consumer and producer price index results for January combined will keep the Federal Reserve on hold until at least the summer. With that in mind, it makes sense for investors seeking passive income to add stocks now that consistently raise the dividends they pay their shareholders.
Often, when income investors look for defensive companies paying big dividends, they are drawn to the Dividend Aristocrats, and with good reason. The 68 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 each quarterly rebalancing.
- Average daily volume of at least $5 million transactions for every trailing three-month period at every quarterly rebalancing date
- Be a member of the S&P 500
We screened the Dividend Aristocrats, and these five companies are March’s top 24/7 Wall St. passive income picks.
3M
This top company’s stock could jump with an economic pick-up, and it pays a very rich 6.52% dividend. 3M Co. (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 solution
- 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
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
Source: RusN / Getty Images
This is a very off-the-radar idea, but it makes sense as they produce products that are always needed and pay a strong 5.43% dividend. Amcor PLC (NYSE: AMCR) manufactures and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific.
The company operates through two segments: Flexible and Rigid Packaging.
The Flexibles segment provides flexible and film packaging products in food and beverage, medical and pharmaceutical, fresh produce, snack food, 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, 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.
Franklin Resources
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This company is a mutual fund powerhouse that pays a safe and secure 4.58% dividend. Franklin Resources Inc. (NYSE: BEN) is among the most prominent global money 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
The 2023-2024 bull market has proven to be a solid tailwind for the company, and while withdrawals from baby boomers may be a concern, the path forward looks solid.
Federal Realty Investment Trust
Source: Davel5957 / iStock via Getty Images
While real estate has been hit over the last few years, hard assets are good in inflation, and this stock pays a solid 4.35% dividend. Federal Realty Investment Trust (NYSE: FRT) is a recognized leader in the ownership, operation, and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C., to Boston, San Francisco, and Los Angeles.
Federal Realty’s mission is to deliver long-term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply.
Its expertise includes creating urban, mixed-use neighborhoods like:
- Santana Row in San Jose, California
- Pike & Rose in North Bethesda, Maryland
- Assembly Row in Somerville, Massachusetts.
Federal Realty’s 102 properties include approximately 3,300 26 million square feet tenants and over 3,100 residential units. Federal Realty has increased its quarterly dividends to its shareholders for 56 consecutive years, the longest record in the REIT industry.
Kimberly-Clark
Source: Tim Boyle / Getty Images
This consumer staples leader is a safe bet for nervous investors and pays a dependable 4.05% dividend. Kimberly-Clark Corp. (NYSE: KMB) and its subsidiaries manufacture and market personal care and consumer tissue products worldwide.
It operates through three segments:
- Personal Care
- Consumer Tissue
- K-C Professional
The Personal Care segment offers:
- Disposable diapers, swim pants, training and youth pants
- Baby wipes, feminine and incontinence care products
- Related products under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Sweety, Kotex, U by Kotex, Intimus, Depend, Plenitud, Softex, Poise, and other brand names.
The Consumer Tissue segment provides facial and bathroom tissues, paper towels, napkins, and related products under Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve, and additional brand names.
The K-C Professional segment offers wipers, tissues, towels, apparel, soaps, and sanitizers under the Kleenex, Scott, WypAll, Kimtech, and KleenGuard brands.
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