May’s Top Dividend Moves: The 3 Best Income Stocks to Buy Now

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As May 2024 kicks off, investors are keen on bolstering their portfolios with the best dividend stocks to buy now. These stocks represent companies that regularly distribute a portion of their profits to shareholders. 

The appeal lies in the ability to receive passive income in the form of cash payments on top of potential share price appreciation. While the allure of finding the following big growth stock is strong, dividend stocks provide investors with an unmatched sense of stability. As you hunt for the best income stocks to buy, it is crucial to consider that a high yield alone will not yield the best results.

With that in mind, here are the best dividend stocks to buy in May 2024!

Automatic Data Processing (ADP)

In this photo illustration the stock market information of Automatic Data Processing, Inc. displays on a smartphone with the logo of Automatic Data Processing, Inc. ADP stock.

Source: IgorGolovniov / Shutterstock

Automatic Data Processing (NASDAQ:ADP) is undoubtedly one of the best dividend stocks to buy now. As a global leader in providing human capital management (HMC) solutions, ADP stock has grown its dividend considerably over the last decade. 

Automatic Data Processing services businesses of all sizes, from small enterprises to multinational corporations. Its business model is resilient and essential, adding an extra layer of stability regardless of the financial conditions in the broader economy.

The company delivered record financial results in the 2023 fiscal year, and 2024 is moving in the right direction. In their latest quarterly results, revenue increased 7% YOY to $5.3 billion. Net earnings rose 14% YOY to $1.2 billion, with EPS up 15% to $2.88 per share.

Moreover, the adjusted EBITDA margin increased by 140 bps to 29.3%. Healthy new business bookings and strong client retention translate to favorable growth. With a 10% CAGR in its dividend over the last decade and a stable HCM demand backdrop, ADP should be on your radar in May.

PepsiCo (PEP)

Logotype of PepsiCo (PEP) against the blue sky

Source: FotograFFF / Shutterstock.com

PepsiCo (NASDAQ:PEP) is a consumer staple giant that reigns supreme. Their robust product portfolio of brands across the food and beverage arena gives them a strong foothold in the industry. 

PepsiCo’s brands have strong global recognition and pricing power, allowing them to maintain healthy profit margins and cash flows even in difficult economic times. The focus on food and beverage, covering both manufacturing and distribution, adds an element of defensive stability. This is because these items can be viewed as ‘’essential’’, as they are items that consumers are less likely to forego.

PepsiCo is also a Dividend Aristocrat, having raised its dividend for 52 consecutive years. Their track record speaks volumes about the company’s commitment to rewarding shareholders. With a current yield of 3.06% and strong guidance for FY24, PepsiCo remains one of the top dividend stocks to buy now.

Goldman Sachs (GS)

Image of a smartphone with the Goldman Sachs logo on it.

Source: iotr Swat/Shutterstock.com

At first glance, Goldman Sachs (NYSE:GS), the investment banking giant, might not seem like the obvious dividend stock pick. However, its long and consistent dividend payment track record makes it extremely attractive. 

Goldman Sachs benefits from its diverse investment banking and wealth management revenue streams. This diversification gives the company an edge in times of volatility. Moreover, Goldman has weathered numerous events, including the most recent slowdown in deal flow due to inflation and higher interest rates.

As of May 2024, Goldman is amid a turnaround. Their Q1 FY24 results reflected strong growth in their investment banking wealth management divisions. Revenue increased 16% YOY to $14.21 billion, with EPS up 32% to $11.58 per share. Additionally, assets under supervision increased by $36 billion to a record $2.85 trillion. With a current yield of 2.46% and a payout ratio of 42.95%, GS stock has ample room to continue growing its dividend per share over the next decade. 

On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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