3 Dividend Stocks Worth Pouncing On?

If you’re looking for steady income, dividend stocks are a powerful tool providing regular cash payouts as you wait for stock price appreciation.

While no dividend are paid out at the behest of the Board of Directors and so never guaranteed, four top dividend stocks to consider this year include Genuine Parts Company (GPC), Prologis (PLD), and Houlihan Lokey (HLI). These companies have long and impressive history of rewarding shareholders with good profits.

Key Points

• GPC, PLD, and HLI have all demonstrated consistency in returning value to shareholders through reliable dividend payouts.
• The 4 dividend stocks are ideal for investors looking for long-term growth and steady income.
• All four picks operate in industries with long-term growth and sustainability.

Genuine Parts

Genuine Parts Company (GPC) is one of the top dividend stocks to buy now, having consistently boosted its payouts for a whopping 68 years in a row.

The company’s business model is premised on the perpetual need auto parts, as well as serving industries that require replacement parts. This creates a stable demand for GPC’s products, which means reliable dividends.

GPC’s annual dividend yield has remained consistent in the past 13 years, with the highest being 5.51% and the lowest at 1.87%.

The company’s annual dividend stands at $4.00 per share, representing an approximate yield of 3.43%. The stock’s payout ratio, the amount of earnings paid out as dividends, is comfortably sustainable, standing at 51.2%.

Its third-quarter performance in 2024 registered an increase of 2.5% year-over-year in sales, hitting approximately 6 billion dollars. This is all largely attributable to the company’s Automotive Parts segment, and with a growth strategy focused on expanding the distribution channels, GPC’s dividend stock has a pretty solid foundation for long-term sustainability.

Prologis

PLD is a virtual whale in industrial real estate. With so much commerce these days carried out online, the demand for rapid delivery, warehousing, and distribution centers is high and those are the areas that PLD focuses on.

PLD owns quite a massive portfolio across the globe – roughly about 1.2 billion square feet of facilities spread across 19 countries. These properties tend to be concentrated near busy areas like airports, giving it an occupancy rate of approximately 95% and above. And when combined with the REIT obligation to distribute at least 90% of its taxable income as dividends, the stock is highly attractive for income seekers.

Prologis offers competitive dividend yields to those on the hunt for steady payouts, the current one stands at $3.84 per share, translating to a yield of 3.64%. Its 5-year growth rate, by mid-2024, was approximately 5.83%.

These dividend yields have increased consistently every year since 2009 but the concern of ongoing hikes is that, in the last quarterly dividend, PLD’s payout ratio was 116.01%, meaning it paid out more than it earned.

With the e-commerce market set to grow by 7.83% over the next four years through 2029, sustained demand for warehousing facilities is forecasted and should reward investors handsomely as a result.

Houlihan Lokey

HLI is a play on mergers and acquisitions, but they also are specialists in all things financial engineering, whether that’s restructuring or capital markets, or even advisory services. As a dividend stock, the yield is pretty good but not eye-popping coming in at 2.28%.

In the past 11 years, Houlihan Lokey’s 3-year average dividend per share growth rate was 53.30% per year, though it has been as low 16.80% annually. The payout ratio sits at 46.63% and that should let investors sleep well at night knowing the balance sheet isn’t overly extended.

One nice thing about HLI is its focus on middle-market deals, those valued at between $10 to $500 million. Unlike the mega-mergers, these size deals are often underserved by larger banks, enabling HLI to dominate its core market.

It is also worth mentioning that HLI’s restructuring business actually does well during economic downturns, countering fluctuations in standard M&A activity and acting as a virtual cushion under the stock.