Growth opportunities in 2024

important point:

  • Enterprise Products Partners (EPD) offers a high yield of 7.55% and has a track record of consistently growing dividends.
  • Broadcom (AVGO), yielding 1.9%, stands out for its strong position in the semiconductor sector and growth potential into 2024.
  • Extra Space Storage (EXR), a high-yield REIT, has shown an impressive growth of 400% over the past decade.

Dividend stocks have historically been a favorite among investors Stable returns and a reliable income source, These listed companies not only offer opportunities for capital appreciation but also share a portion of their profits directly with shareholders through regular dividends.

While some investors prefer growth-focused strategies, others appreciate the stability and long-term potential for gradual growth that dividends provide.

Recognizing these benefits, especially in uncertain market conditions, Feinbold decided to conduct a stock market analysis as we approach the end of 2023. This analysis focuses on identifying three promising dividend stocks Possible takeoff next year,

Broadcom (AVGO)

Under pressure from macroeconomic headwinds and the dominance of the Big Seven AI-powered companies, dividend stocks don’t offer much in 2023. However, next year may provide a more favorable environment for these companies, especially due to Federal Reserve expected to cut rates,

Charlie Gaffney, managing director of Morgan Stanley, believes that companies “With solid business franchises” May attract investors’ attention in 2024 “Can generate tremendous amounts of free cash to generate distributions and grow the dividend over time”,

For this reason, Gaffney picked semiconductor giant Broadcom (AVGO) as a dividend stock that could perform well in 2024. 1.9% yield And has “phenomenal performance” in 2023 with gains since the beginning of the year of more than 100%.

The 1.9% yield means that the annual dividend paid by Broadcom represents 1.9% of its current stock price.

Looking ahead, AVGO has more room to grow in the coming year, primarily due to current cloud computing and AI trends, the analyst said.

Enterprise Product Partner (EPD)

Enterprise Products Partners (EPD) is a midstream energy company primarily involved in the transportation, storage and processing of petroleum, natural gas and petrochemical products.

The company has had consistent financial performance over the years, allowing it to raise dividends to shareholders for over 2 decades. Additionally, its dividend has grown at a CAGR of 7%.

Currently, EPD offers high 7.55% yield And has returned approximately $51 million to its shareholders through dividends and share buybacks.

The company estimates its $6.8 billion capital projects will be operational by 2025, a move that will enhance its organic growth and boost future earnings, leading to higher dividend payouts later on.

The stock saw slow growth in 2023, rising only 8.1% since the beginning of the year.

Extra Storage Space (EXR)

Extra Space Storage (EXR) is a real estate investment trust (REIT) that specializes in owning and operating self-storage facilities.

REIT company currently pays Quarterly dividend of $1.62 per share, with a dividend yield of 4.19%. EXR has been distributing significant dividend payments for almost 13 years and is one of the best performing REITs over that period.

More specifically, extra storage space has produced over 400% in total returns over the last 10 years (17.6% p.a.), outperforming the broader S&P 500.

The company’s growth catalysts put it in a strong position to continue increasing its dividend. Although EXR is unlikely to continue increasing its payout at the same rate, the REIT company will likely continue to provide industry-leading dividend growth.

The company’s shares have risen more than 12% since the beginning of 2023.

In the third quarter of 2023, the company reported revenue of $748 million, up nearly 50% from a year earlier.


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