3 of the Safest Dividend Stocks With Recession-Proof Payouts
These names have a long history of paying dividends, due to their long-term growth.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
Some of the best growth stocks in the entire stock market are dividend payers. Companies with enough cash flow to return dividends to shareholders broadly have strong business models, and durable competitive advantages.
These three names have a long history of paying dividends, due to their long-term growth. With very low dividend payout ratios, they represent three of the safest dividend stocks for 2024.
Safe Dividend Stock #1
Ameriprise Financial AMP has a market capitalization above $30 billion, with more than 12,000 employees, and more than $1 trillion in assets under management. The company’s operating segments include Advice & Wealth Management, Asset Management, Annuities, and Protection (insurance products).
On April 22, Ameriprise Financial raised its quarterly dividend 9.6% to $1.48, extending the company’s dividend growth streak to 20 consecutive years.
It also reported first-quarter earnings results. For the quarter, revenue increased 10.8% to $4.1 billion. Adjusted earnings per share of $8.39 rose 16% from the prior year’s result of $7.25, and was $0.19 above estimates.
Total assets under management, or AUMs, increased 15% to $1.4 trillion due to strong client net inflows and market appreciation. Client assets for the Advice & Wealth Management grew 19% to $954 billion. Asset Management AUM grew 7% to $652 billion, adjusted operating net revenues improved 7%, and pretax adjusted operating earnings were higher by 25%.
For the Retirement & Protection Solutions segment, adjusted revenue grew 11% while pretax adjusted operating earnings increased 3%.
We now expect that the company will earn $34.46 in 2024, up from $33.62 previously. This would represent an increase of 16.5% from the prior year.
Between 2014 and 2024, Ameriprise Financial compounded its EPS at a rate of approximately 15% per year. Looking ahead, we are forecasting a more conservative 8% EPS growth.
Earnings growth will be driven primarily from revenue growth and share repurchases. The company’s large Advice & Wealth Management segment has typically been growing revenues at a steady rate, and we expect this to continue moving forward. We are expecting dividend growth to roughly keep pace with earnings growth.
With a forward dividend payout ratio below 20% for 2024, AMP’s dividend is highly secure with room for continued dividend increases.
AMP stock currently yields 1.4%.
Safe Dividend Stock #2
Owens Corning OC produces and sells insulation, roofing, and fiberglass materials across diverse markets. Operating in Composites, Insulation, and Roofing segments, it manufactures and sells glass reinforcements, fiber products, thermal insulation, foam sheathing, roofing shingles, and components used in construction and various industries.
OC reported better-than-expected revenue and earnings for the first quarter on April 24. Net sales of $2.3 billion declined 1% from the same quarter last year, but beat estimates which called for $2.26 billion. Adjusted EPS of $3.59 rose 28% year over year, and beat estimates by $0.55.
The Roofing segment led the company's growth for the quarter, with a 7% increase in sales to $957 million. This growth helped outweigh a 2% decline in Insulation segment sales, and an 11% decline in Composites.
Looking ahead, Owens Corning expects second-quarter 2024 sales to be roughly flat from Q2 2023.
Going forward, the company has multiple growth catalysts. First, Owens Corning announced a definitive agreement to acquire Masonite International Corp. to enhance its position in the building and construction materials industry. This purchase is one component of the company's previously discussed determination to explore strategic alternatives for its global glass reinforcements business, which has annualized sales of about $1.3 billion.
Heading into 2024, Owens Corning remains cautiously optimistic and expects stable conditions for most of its building and construction end markets despite various global economic headwinds. This view reflects strategic positioning and operational resilience for Owens Corning, with ongoing investment in growth and shareholder returns.
Innovation is at the core of OC’s growth strategy. The company has a 39-product lineup launched that was refreshed in 2023. Demand for the company’s product has been stable in recent quarters coming off a multi-year period of very strong growth. A significant amount of the company’s free cash flow was returned to investors in 2023, through $812 million composed of dividends and share repurchases.
Owens Corning has paid increasing dividends for the past 10 years. We expect the company to maintain its dividend growth. The dividend is highly secure, with a 10-year payout ratio averaging just 17%, and we expect the company to maintain its payout around these levels in the future.
OC stock currently yields 1.4%.
Safe Dividend Stock #3
Mueller Industries MLI manufactures and sells metal and plastic products around the world through its three segments: Piping Systems, Industrial Metals, and Climate. The Piping Systems segment offers copper tubes and plumbing-related fittings, and it also resells steel pipes, brass, and other metal products to wholesalers in various industries.
Mueller strives to be an industry leader, as it follows the approach of competing where it can be first or second in its core products and key markets. Mueller has averaged an 24% return on invested capital over the past five years and aims to produce double-digit annual growth in operating income.
The company reported quarterly earnings results on April 23. Net sales for the quarter totaled $849 million, showing a decrease from the $971 million reported during the corresponding period last year, primarily due to demand “normalizing” and low copper pricing. GAAP EPS came to $1.21 for the quarter.
The balance sheet remained strong, as available cash and short-term investments amounted to $1.3 billion, and the current ratio indicates a healthy financial position of 6 to 1.
Because of its robust growth over the past few years, MLI has aggressively raised its dividend, with an average annual rate of 25% over the last five years. Recently, the company raised the quarterly dividend by 20% to $0.15 per share. The 2024 dividend payout ratio of 11% indicates a highly secure dividend.
MLI stock currently yields 1.4%.
Disclosure: No positions