Three Exceptionally Reliable Dividend Stocks Predicted to Boost Their Dividends to Record Highs in 2025, Regardless of a Potential Stock Market Falloff
In the realm of investing, it's easy to overlook the charm of high-quality, dividend-paying companies when the S&P 500 is soaring. With a 23.3% gain in 2024, for instance, a meager 2%, 3%, or 4% dividend yield might seem underwhelming. However, dividends from strong stocks can provide a steady source of income even during uncertain financial times, especially when the broader market is underperforming.
An exclusive group of companies known as Dividend Kings stands out in this regard. These are firms that have successfully paid and increased their dividends for at least 50 consecutive years. In 2025, Walmart, Colgate-Palmolive, and Kimberly-Clark are three such Dividend Kings that look poised to continue their streak of dividend increases, regardless of market conditions.
Walmart's Winning Business Model
Walmart's stock performance has been somewhat lackluster in recent years. Gaining less than 10% between 2021 and 2023, Walmart then experienced an impressive 71.9% surge in 2024. While some of this growth may have been a catch-up for years of underperformance, Walmart's results were still impressive.
The retail giant is generating record revenue and reporting a noticeable improvement in its operating margin, despite the impact of inflation on profitability. With a reasonable payout ratio of 33.2%, Walmart announced a 9% dividend increase in February 2024, marking its highest increase in over a decade.
Looking ahead to 2025, Walmart is expected to announce another significant dividend raise. The company's solid earnings growth and strong business performance make it a recession-resistant investment, even in an uncertain economic climate.
Colgate-Palmolive's Diversified Strength
Colgate-Palmolive is commonly known for its flagship brands, including Colgate and Palmolive, as well as Speed Stick, Softsoap, Ajax, and Tom's of Maine. Unlike many of its competitors, the company is highly diversified, with 61% of its sales coming from outside North America in its most recent quarter.
Colgate-Palmolive's business is thriving, with organic volume rising 3.7% and organic sales climbing 6.8% in its most recent quarter. The company's strong pet food brand, Hill's Science Diet and Prescription Diet, is a significant contributor to its success.
With a forward P/E ratio of 23.4, Colgate-Palmolive offers a decent dividend yield of 2.2%. While it might not be an ultra-high-yield stock, it provides a stable source of income for risk-averse investors, even in a volatile market.
Kimberly-Clark: A Dirt-Cheap Dividend King
Kimberly-Clark is another consumer staples giant with well-known brands such as Huggies, Kotex, and Kleenex. Like Walmart and Colgate-Palmolive, it's a company that can maintain consistent results across various economic cycles.
Unfortunately, Kimberly-Clark has been dealing with pricing and volume pressure. In the first three quarters of 2024, its consolidated volumes grew by just 1%, while net prices increased by 2%. Total consolidated growth was negative 2% due to currency headwinds.
Despite its recent struggles, Kimberly-Clark offers a generous dividend yield of 3.8%, making it an attractive option for investors focused on income generation rather than capital gains potential. With a forward P/E ratio of 17, Kimberly-Clark is a bargain in the world of Dividend Kings.
In conclusion, Walmart, Colgate-Palmolive, and Kimberly-Clark are three Dividend Kings that could continue their track records of dividend increases in 2025. While specific predictions are hard to come by, these companies' strong business performance and long histories of dividend growth make them compelling investment options for income-focused investors.
- Despite Walmart's stock performance being somewhat lackluster from 2021 to 2023, garnering less than 10%, it saw an impressive 71.9% surge in 2024, showcasing its resilience in the finance world.
- In the realm of finance, Colgate-Palmolive's diverse business model, with 61% of its sales coming from outside North America, has helped it maintain its profitability, even in the face of inflation.
- Looking ahead to 2025, Walmart's solid earnings growth and strong business performance make it a notable choice for investors seeking recession-resistant investments, providing a notable source of income even in uncertain economic times.
- Kimberly-Clark, with its well-known brands and ability to maintain consistent results across various economic cycles, offers a generous dividend yield of 3.8%, making it a notable choice for investors focused on income generation in the realm of finance.
