When it comes to investing in the stock market, more risk does not always mean more reward. Indeed, the opposite is often true. The strongest businesses tend to be the least risky stocks to buy as they can help you avoid losses and generate lasting gains.
To aid your search for these wealth builders, here are two steadfast dividend stocks that are particularly attractive buys today.
1. Microsoft
If strong balance sheets and breathtaking profitability are your cup of tea, Microsoft (MSFT 2.22%) will no doubt appeal to you. The tech titan is one of the safest stocks you can buy in the market today. However, don't let that fool you into thinking its days of impressive growth are over.
Microsoft's brilliant decision to invest billions of dollars into ChatGPT-maker OpenAI thrust it to the forefront of the artificial intelligence (AI) revolution. The deal accelerated Microsoft's efforts to infuse generative AI and other advanced machine learning technologies into its popular productivity software. The company's AI-powered "copilots" are helping customers be more efficient while also enhancing the quality of their work.
Additionally, Microsoft stands to benefit from the soaring demand for cloud computing services. AI is often built in and delivered from the cloud. Microsoft's Azure cloud infrastructure platform is thus seeing its expansion accelerated by the rapid adoption of AI services, with revenue up 30% in the quarter ended Dec. 31.
Microsoft's earnings, in turn, could more than double to $24 per share by 2029, according to Morgan Stanley. The investment bank sees the software giant's sales growing by 14% annually in the coming years, fueled by strong demand for its AI solutions and cloud computing services. Higher profits should mean larger dividends and bountiful total returns for investors who buy shares today.
2. ExxonMobil
Hedges can help you protect your portfolio from threats. One such threat is the potential for geopolitical conflict in the Middle East and Europe to send oil prices sharply higher. Surging energy costs tend to slow the global economy and can lead to lower stock prices for many businesses. One way to hedge against these risks is to buy shares in oil-producing companies -- and ExxonMobil (XOM -0.21%) is one of the best in the business.
Exxon's vast network of exploration, production, and refining operations helps to supply the world with dependable and cost-effective energy. For its efforts, the oil and gas behemoth earned $36 billion in profits in 2023.
Not one to rest on its laurels, Exxon is working to expand its asset base by acquiring Pioneer Natural Resources for roughly $60 billion. Pioneer's prized acreage in the Permian Basin should boost Exxon's oil production in the coming years.
Looking even further ahead, Exxon sees a multitrillion-dollar opportunity for its carbon management solutions. The company is investing in the promising field of carbon capture and storage, a potentially game-changing technology that could enable an array of industries to slash their emissions.
With oil and gas fueling its near-term profits and carbon technology set to power its long-term expansion, investors can safely expect Exxon to further its impressive streak of cash payout increases. The energy leader has raised its annual dividend every year for more than four decades.
