Explore Top Dividend Stocks Set to Outperform Inflation
Dividend Stocks that Beat Inflation
Investing in dividend stocks can be a rewarding approach, especially when looking for options that not only provide returns but also stand resilient against inflation. With the current landscape of rising prices, finding stocks that increase dividends above inflation rates becomes crucial for investors who wish to protect their purchasing power. Let's dive into three noteworthy companies recognized for boosting their dividends at rates that significantly exceed inflation.
This Stock Is Ready to Give Investors Sweet Returns
The Hershey Company (NYSE:HSY) is a standout choice, especially as interest rates decline. Hershey recently raised its dividend for the 15th consecutive year, marking an impressive 15% increase from $1.19 to $1.37 per share. This growth rate surpasses the three-year annualized dividend growth of 12.21%. Even with inflation peaking above 9%, Hershey continues to provide investors a compelling, inflation-adjusted return.
Although HSY stock has seen only a 4.3% rise in 2024, and is still down 6.3% over the past year, it remains a remarkable performer among packaged food companies. The current bearish sentiment is largely tied to the emergence of GLP-1 drugs, which pose a long-term challenge to the candy industry. However, Hershey's revenue continues to grow, showing resilience despite challenges.
A Housing Surge Will Make Home Depot a Must-Own Stock
Home Depot (NYSE:HD) has shown a robust increase of 14.6% in 2024 and an impressive 30% surge over the last year. Trading at 26 times forward earnings, it may seem fairly valued compared to its retail peers. Recent growth has largely stemmed from a shift away from technology stocks, and with anticipated lower interest rates, home improvement sectors could see significant benefits.
For dividend investors, this is particularly enticing. Over the past three years, HD stock has increased its dividends by an average of 11.69%. Consistently raising its dividend yearly for 15 years, Home Depot offers an appealing annual payout of $9 per share, making it a top choice for long-term investors.
UnitedHealth Group: A Blue-Chip Healthcare Dividend Payer
The healthcare sector remains a strong contender for investment, and UnitedHealth Group (NYSE:UNH) emerges as a prime candidate. This giant not only offers its health insurance services but also encompasses the Optum network, which leverages data and technology for affordable healthcare solutions. As one of the largest players in the health insurance market, UnitedHealth has a market cap exceeding $560 billion.
Recent strategic moves, such as acquiring LHC Group (NASDAQ:LHCG), bolster its home healthcare services, preparing the company well for future revenue and earnings growth. Over the past decade, UNH stock has delivered a whopping total return of 670.94%. A significant aspect of this growth is the company’s annualized average dividend increase of 14.71% over the last three years, consistently rewarding shareholders with increasing dividends for the past 15 consecutive years.
Frequently Asked Questions
What makes dividend stocks a smart investment?
Dividend stocks provide a reliable income stream and can help offset inflation, making them attractive during economic uncertainty.
How does Hershey continue to raise its dividends?
Hershey's strategy includes maintaining robust sales growth, even amidst higher input costs, allowing for consistent dividend increases.
Why is Home Depot's dividend growth notable?
Home Depot has a strong history of increasing dividends consistently, supported by its growth and performance in home improvement sectors.
What should investors look for in healthcare stocks?
Investors should consider growth prospects, dividend history, and the company's market position when evaluating healthcare stocks.
How can these stocks withstand inflation?
These stocks have historically increased their dividends at rates above inflation, helping investors maintain their purchasing power over time.
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