With the coming of a new year, many people resolve to better themselves in one way or another. For many, that includes improving their families' financial situations. Some of them might be considering some high-risk options, but there are safe ways to do it too.
If you're looking for a low-risk way to generate more income from your investments in 2024, read on. Here are three stocks that have what it takes to safely deliver growing streams of dividends to their shareholders in the years ahead -- and all three stocks are solid buys today.
1. Apple
When it comes to limiting risk for investors, a company's financial fortitude is of the utmost importance. It's here where Apple (AAPL +2.65%) excels. The iPhone maker's profit and cash-flow generation are simply incomparable, even among its megacap tech peers.
NASDAQ: AAPL
Key Data Points
Apple's well-designed hardware and software integrate seamlessly to create consistently excellent customer experiences. It's a simple but difficult-to-replicate formula for success -- one that's helped Apple amass a global customer base that includes over 2 billion installed devices and 1 billion paid subscriptions.
Better still, once someone buys an Apple device, they tend to buy another. These loyal customers drive the company's incredible financial results.
The tech giant produced a staggering $383 billion in revenue and $97 billion in net income over the trailing 12 months. This stunning profitability combined with a fortress-like balance sheet -- Apple's cash reserves and investments stood at a whopping $162 billion as of Sept. 30 -- enabled it to reward its shareholders with $15 billion in dividends and $78 billion in share repurchases during its last fiscal year alone.
All in all, Apple has grown its cash payout to investors by 120% over the past decade. With the artificial intelligence (AI) boom likely to drive a powerful tech upgrade cycle, you can expect this proven wealth-builder to continue to grow its profits and dividends in the years ahead.
2. Lockheed Martin
Though we may wish it weren't true, the reality of the world today is that no nation is safe without a strong national security strategy. As a leading defense contractor, Lockheed Martin (LMT 2.52%) helps countries protect their citizens from those who would do them harm.
NYSE: LMT
Key Data Points
Lockheed's F-35 stealth aircraft serves a central role in the global security strategies of the U.S. military and 17 allied nations. Lockheed also helps to produce many of the defensive systems that have helped Ukraine withstand Russia's invasion, such as the Javelin anti-tank system and the High Mobility Artillery Rocket System (HIMARS). In addition to the strong demand for these proven platforms, Lockheed's broad product lineup -- which includes drones, helicopters, cargo planes, and spacecraft -- helps to further reduce the risks for investors.
The long service lives of many of its products provide Lockheed with a level of visibility and predictability into its future revenue that few other businesses possess. The F-35, for example, is expected to remain in service until 2070.
The reliable cash flow from these product lines enables the defense titan to pay a steadily growing dividend to its shareholders (currently yielding 2.7%). Lockheed has increased its cash payout for 21 consecutive years.
3. Coca-Cola
Consumers may be reducing their consumption of sugary drinks, but Coca-Cola (KO +0.77%) is doing just fine. The beverage colossus is far more than just a seller of soda -- and sales of its broad range of drinks continue to grow.
NYSE: KO
Key Data Points
Coca-Cola offers a broad array of healthier drinks, such as tea, coffee, milk, and nutrient-enhanced water. Gold Peak, Costa Coffee, Fairlife, and Vitaminwater count among the company's collection of popular brands.
Coca-Cola's powerful global marketing and distribution system enables it to adapt to shifting consumer tastes. Roughly 25% of its gross profit growth in 2023 was attributed to its innovation efforts.
Moreover, management's margin expansion initiatives are bearing fruit. Coca-Cola has divested most of its bottling operations in recent years. These and other efficiency-boosting efforts helped to expand the company's adjusted operating margin to nearly 30%, up from 26.5% in 2017.
All told, Coca-Cola's revenue and free cash flow are up an annualized 7% and 14%, respectively, over the past half-decade. This steady growth helped Coca-Cola extend its impressive streak of consecutive annual dividend increases to 61 years.
Even larger cash payouts likely lie ahead for investors. Coca-Cola's core markets are projected to expand by 4% to 10% annually in the coming years. Management, in turn, expects the company's sales and earnings per share to grow by as much as 6% and 9%, respectively, per year. And more profits should mean bigger dividends for Coca-Cola's shareholders.
