Does the global geopolitical backdrop have you a bit hesitant to put your idle cash to work? If so, that's certainly understandable. These aren't exactly the most encouraging of times, after all.
Just don't let short-term headlines prevent you from staying focused on the long-term picture. The global economy is actually rather resilient, capable of eventually overcoming any hurdle put in front of it. The market reliably follows that. The only adjustment you might want to make here is owning a few more income-producing investments, and a little less growth.
If you've got $3,000 -- or any other amount -- you're looking to deploy, here's a rundown of three dividend stocks that would work well in almost every income-minded investor's portfolio.
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Target
There's no denying that mega-retailer Walmart has trounced smaller rival Target (TGT -0.77%) over the past few years. Target's more discretionary selection of merchandise just hasn't resonated with inflation-weary consumers, who've been more interested in the value-priced consumer staples that only Walmart can offer.
As the old cliché goes though, nothing lasts forever. Given enough time, things change.
And Target's change may be coming.
This doesn't seem to be the case with just a quick glance at the company's recent results. Target's first-quarter sales slipped nearly 3%, while its same-store sales fell 3.8% year over year. That's a reversal of the modest progress seen as of the end of last year.
Analysts still expect shallow rekindled growth beginning later this year into next year though, perhaps boosted by the newly created office of enterprise acceleration meant to make the company more agile and nimble. The company also recently hired a new chief digital officer and a chief stores officer who is responsible for customers' complete in-store experience. While there's no guarantee these hires will actually drive the growth they're expected to spur, they do suggest Target finally recognizes it needs to do more, and/or do something else.
None of these developments will directly impact Target stock's dividend anytime soon either, to be clear -- not that it was a worry. Even with the company's recent challenges its dividend was never in any real jeopardy. Indeed, it's now been raised for 54 consecutive years.
This new potential for growth just makes Target a more compelling stock to own after more than three years' worth of persistent selling that now has the stock trading near a multiyear low. There's an upside to this weakness for newcomers, in fact. That is, it's pumped up this stock's forward-looking dividend yield to nearly 4.8%. Even if this retailer isn't the fierce competitor it once was, you'd be hard-pressed to find a similar yield with a company with a similarly low risk profile.
Chevron
In theory, the advent of renewable energy sources like solar and wind along with the mainstreaming of electric vehicles will soon bring an end to the need for any fossil fuels. In reality, however, that's just not the case. The proliferation of alternative energies is incredibly slow-going, due to its cost as well as the fact that it just takes time to make such shifts.
For perspective, the International Energy Administration reports that as of 2022 less than 20% of the planet's power production came from renewables. More than 80% of it still came from hydrocarbons like oil, coal, and natural gas.
The tipping point isn't exactly in the immediate future either. Goldman Sachs says demand for oil will continue to grow until finally peaking at 110 million barrels per day in 2035. And even then consumption of crude will only decline at a very slow pace.
The U.S. Energy Information Administration believes that crude oil will still be the world's single-biggest source of energy production as far down the road as 2050, thanks to growing energy needs in the meantime.
Connect the dots. There's still plenty of money to be made within the old-school energy business.
Enter Chevron (CVX -0.05%), the world's third-biggest oil and gas company (as measured by market cap and revenue). The $250 billion outfit did a little more than $200 billion worth of business last year, turning nearly $18 billion of that into net income in what was a slightly off year.
Bigger doesn't always mean better, of course. But in the oil and gas business it certainly helps. Deeper-pocketed companies like Chevron can afford to invest and acquire the very best of growth drivers, yet can also afford to say no to less promising deals that smaller rivals might have to make.
More to the point for interested investors, bigger oil companies tend to generate more reliable profits that ultimately fund dividend payments. Underscoring this argument is the fact that not only has Chevron paid a quarterly dividend like clockwork for decades, but it's also raised its full-year per-share dividend payments in each of the past 38 years, with no end to the streak in sight. Newcomers will be plugging into this sustainable dividend while the projected yield stands at 4.7%.
Verizon
Finally, add Verizon Communications (VZ -1.20%) to your list of dividend stocks to buy if you've got a few thousand bucks you can commit to a long-term trade. Its forward-looking yield is an incredible 6.5%.
There's a trade-off for that above-average dividend yield. That's below-average growth.
See, the U.S. telecom market is very well saturated. Pew Research reports that more than 90% of adults living in the United States already own a mobile phone, with the industry's major players like AT&T, T-Mobile, and Verizon now mostly just swapping mobile customers with one another.
Meanwhile, the number of landlines continues to shrink, as more and more consumers choose to make their cellphone their only phone. AT&T says it expects to altogether end its landline service by 2030, in fact, underscoring an industrywide headwind. Although Verizon offers private 5G networking solutions to certain kinds of organizations and institutions, consumer- and business-facing voice service is its core business. And there's just not a lot of growth opportunity on this front.
The thing is, with a yield of more than 6%, it doesn't really matter. That's huge, exceeding the yields of most any other stock of this caliber. It's also a better yield than the interest rate you'll see for comparably risky bonds.
Perhaps more important to income-minded investors interested in this sizable yield, the underlying dividend payment is sustainable.
Americans don't just own cellphones en masse, for the record. They're largely and effectively addicted to their mobile devices -- for better or worse -- while at the same time aren't apt to give up their broadband internet connections anytime soon, either. Indeed, they're increasingly appreciating Verizon's at-home high-speed internet service that doesn't require any physical wires being run to their residence. The company reported an additional 308,000 people signed up for this fixed wireless access service last quarter alone, bringing its customer count to more than 4.8 million. And that's in addition to the 339,000 new wired broadband customers.
Bottom line? Verizon's got enough reliable sources of recurring and profitable revenue, even if they're not great growth engines.
