Primarily, investors target the most reliable dividend stocks to widen their margin of safety. At the end of the day, no matter what system you run or how much you listen to market gurus (or think you are one yourself), no one knows what the market will do. If they did, no one would be selling that information for any price.
However, because of the unpredictability of the market, top dividend stocks to buy make plenty of sense. For example, if your capital returns don’t quite measure up, you can rely on the passive income component of your portfolio to help lift total net performance. As well, some investors may depend on these payouts to pay for everyday living expenses, which may be the case for high-yield reliable dividend stocks. Another reason to consider enterprises that offer recurring shareholder returns is stability. Dividends must come from somewhere, which means that companies providing passive income typically command established businesses. At a time like this, the below trustworthy dividend stocks may be well worth their weight in gold.
MSM | MSC Industrial | $92.82 |
MAN | Manpower Group | $75.43 |
CVX | Chevron | $155.79 |
VLO | Valero Energy | $109.27 |
SNY | Sanofi | $51.49 |
PKG | Packaging Corp. of America | $129.57 |
BKE | Buckle | $32.69 |
MSC Industrial (MSM)
A direct marketer and supplier of a broad range of metalworking and maintenance and repair supplies, MSC Industrial (NYSE:MSM) offers broad relevancies for industrial enterprises throughout the U.S. Presently, the company carries a market capitalization of $5.23 billion. Since the beginning of this year, MSM gained almost 15% of its equity value.
While certainly not the most exciting name among the most reliable dividend stocks, MSC brings plenty of fiscal substance to the table. Mainly, the company enjoys a stable balance sheet. In particular, its equity-to-asset ratio comes in at 0.56, ranked above 67.53% of enterprises in the industrial distribution industry. Also, its Altman Z-Score clocks in at 5.81, indicating high stability and low risk of bankruptcy.
Regarding passive income, MSC carries a forward yield of 3.38%. Its payout ratio sits at just over 50%, which is near the upper end of what most investors consider a sustainable yield. Adding to its relevance, MSC features 19 years of consecutive dividend increases. Thus, it’s one of the top dividend stocks to buy from a holistic perspective.
Manpower Group (MAN)
Headquartered in Milwaukee, Wisconsin, ManpowerGroup (NYSE:MAN) bills itself as the leading global workforce solutions firm. Per its public profile, the company helps organizations transform in a fast-changing world of work by sourcing, assessing, developing, and managing the talent that enables them to win. Featuring a market cap of $3.78 billion, MAN stock dipped 11% since the Jan. opener.
Nevertheless, ManpowerGroup makes a strong case for the most reliable dividend stocks. Fundamentally, while workers may maintain some of the edges against employers when it comes to negotiating workplace environments, the pendulum may swing under a recession. From a financial perspective, the company isn’t remarkable. That said, it does enjoy consistent profitability.
Surely, its resilience in the bottom line helps with its passive income profile. Presently, ManpowerGroup carries a forward yield of 3.93%. In addition, its payout ratio sits at 40.33%, fostering confidence in terms of yield sustainability. Also, management posts 13 years of consecutive dividend increases. Thus, it makes a case for relevant and stable dividend stocks to consider.
Chevron (CVX)
One of the world’s leading integrated energy companies, Chevron (NYSE:CVX) is involved in virtually every facet of the energy industry. Put another way, it commands business units in exploration and production (upstream), storage and transportation (midstream), and refining and marketing (downstream). As of this writing, Chevron carries a market cap of nearly $294 billion. Since the Jan. opener, CVX lost more than 10%.
At first glance, CVX might not seem a viable idea for the most reliable dividend stocks. Further, looking ahead, the electrification of mobility seems to challenge hydrocarbons for their dominance. Still, the issue is that in many cases, the electricity that electric vehicles use comes from hydrocarbon sources. So, even incorporating the EV argument, fossil fuels will probably be relevant well into the future.
Sure, it’s not the popular argument. However, it’s important to deal with realities. Combined with Chevron’s stout growth and profitability, it’s a reasonable idea for high-yield reliable dividend stocks. Indeed, CVX carries a forward yield of 3.87%. As well, its payout ratio sits at 41.32%, which is very reasonable. Finally, Chevron features 37 years of consecutive dividend increases, making a case for trustworthy dividend stocks to buy.
Valero Energy (VLO)
Based in San Antonio, Texas, Valero Energy (NYSE:VLO) is an international manufacturer and marketer of transportation fuels and petrochemical products. Per its corporate profile, Valero operates 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day and 13 ethanol plants with a combined production capacity of approximately 1.68 billion gallons per year. Featuring a market cap of $39.5 billion, VLO dipped 9% year-to-date.
Again, the hydrocarbon narrative might not sound politically relevant given the push for EVs and renewable energy infrastructure. However, it’s also important to note that because of the intermittency, renewables represent the least reliable energy sources. Therefore, VLO should be relevant for decades to come, adding to its case for the most reliable dividend stocks. Also, investors may appreciate how undervalued VLO is. Right now, the market prices shares at a forward multiple of 5.17, ranking better than 72.21% of the competition.
Turning to passive income, Valero carries a forward yield of 3.73%. To be fair, it doesn’t have a history of dividend increases. Still, its payout ratio sits at 30.08%, potentially making it one of the trustworthy dividend stocks.
Sanofi (SNY)
Hailing from Paris, France, Sanofi (NASDAQ:SNY) engages in the research and development, manufacturing and marketing of pharmaceutical drugs principally in the prescription market. As well, its public profile mentions that it develops over-the-counter medication. At the moment, Sanofi carries a market cap of almost $129 billion. Since the beginning of this year, SNY gained more than 4% of its equity value.
Standing among the top pharmaceutical firms in the world, Sanofi commands strong relevancies, thus making SNY enticing as one of the most reliable dividend stocks. Significantly, the company rates highly in terms of profitability. For example, its trailing-year net margin clocks in at 18.44%, outflanking 87.26% of companies listed in the drug manufacturing industry.
Also, it’s undervalued. Right now, the market prices shares at a forward multiple of 11.59. As a discount to projected earnings, Sanofi ranks better than 70.31% of the competition. Finally, the company’s forward yield stands at 3.73%, above the healthcare sector’s average yield of 1.58%. Also, its payout ratio sits at just under 39%, making SNY one of the top dividend stocks to buy.
Packaging Corp of America (PKG)
Headquartered in Lake Forest, Illinois, Packaging Corp of America (NYSE:PKG) is the third-largest producer of containerboard products and the third-largest producer of uncoated freesheet paper in North America. Currently, the company carries a market cap of $11.52 billion. Since the beginning of this year, PKG dipped ever so slightly below parity.
Nevertheless, moving forward, PKG represents a strong case for the most reliable dividend stocks. Fundamentally, e-commerce continues to represent an overall burgeoning segment of total retail sales. Unless you anticipate this trend reversing, Packaging Corp should be quite relevant. Also, the company features overall solid (though arguably unremarkable) financial statistics. However, where Packaging clearly shines is in profitability. With a trailing-year net margin of 11.61%, the enterprise blows past 88.74% of its sector rivals.
Lastly, Packaging features a forward yield of 3.9%, conspicuously outpacing the material sector’s average yield of 2.82%. To be sure, its payout ratio of 59.76% is a bit on the high side but it’s still reasonable. As well, the company features 12 years of consecutive payout increases, making PKG one of the high-yield reliable dividend stocks to consider.
Buckle (BKE)
Arguably the riskiest idea for most reliable dividend stocks on this list, Buckle (NYSE:BKE) is an American fashion retailer. Offering a unique mix of high-quality, on-trend apparel, accessories, and footwear per its corporate profile, Buckle caters to fashion-conscious young men and women. Presently, it features a market cap of $1.66 billion. However, BKE lost almost 28% of its equity value since the Jan. opener. Obviously, that’s not a great selling point for trustworthy dividend stocks. However, on a financial note, Buckle enjoys a solid cash balance relative to the underlying industry. Also, its Altman Z-Score clocks in at 5.69, indicating low bankruptcy risk.
Moreover, Buckle resonates with its audience as evidenced by its three-year revenue growth rate of 13.7%. Also, its EBITDA growth rate during the same period impresses at 30%. With all that, BKE remains undervalued, trading at a forward multiple of only 8.4.
In closing, Buckle carries a forward yield of 4.27%. As well, its payout ratio sits at just under 33%. For those seeking top dividend stocks to buy with a contrarian twist, BKE might be interesting.
On the date of publication, Josh Enomoto 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.