The stock market has gotten off to a roaring start in 2024. The S&P 500 ended the first quarter up 10%, its average return over an entire year. That surge has driven down its dividend yield to 1.3%. It's approaching a historically low level.
However, while the dividend yield on most stocks has fallen as share prices have risen, some enticing opportunities remain available. Here are four top dividend stocks yielding at least 4% that you can buy for income this April.
An oil-fueled income stream
Chevron(NYSE: CVX) entered April with a dividend yield of about 4.1%. The oil and gas giant has an exceptional track record of paying dividends. This year was its 37th consecutive year of increasing its dividend, one of the longest streaks in the oil patch. Chevron gave its investors an 8% raise. Its five-year dividend growth rate is higher than the S&P 500's and more than double the pace of its closest peer.
The oil company should have ample fuel to continue increasing its high-yielding dividend. Its high-return capital program has it on track to grow its free cash flow by more than 10% annually through 2027, assuming oil averages $60 a barrel. That will supply it with enough cash to fund its capital program, pay a growing dividend, and repurchase shares at the low end of its $10 billion-$20 billion annual target range. Meanwhile, it could produce an even bigger gusher of free cash flow if oil remains at its current level in the $80s and it closes its needle-moving acquisition of Hess. For example, closing the Hess deal would give it the fuel to more than double its free cash flow by 2027 at $70 oil. With strong growth at lower oil prices and ample upside catalysts, Chevron's dividend should keep heading higher.
Passive income from real estate
Camden Property Trust(NYSE: CPT) currently yields 4.2%. The real estate investment trust (REIT) has done a solid job increasing its dividend over the years. While it hasn't boosted its payout every year, it has steadily raised it since resetting the dividend level in the aftermath of the financial crisis. The payout has grown by a third since 2018.
The residential REIT is in a strong position to continue growing its dividend. It's benefiting from strong demand for rental housing, which is enabling it to steadily raise rents and expand its portfolio. It currently has five new communities under development, including its first two single-family rental communities. Meanwhile, it has nine more communities under development that it hopes to start construction on in the future. It also has the financial flexibility to make acquisitions as opportunities arise. These growth catalysts should enable Camden to continue increasing its dividend.
Megatrend driven growth
Brookfield Infrastructure(NYSE: BIPC)(NYSE: BIP) yields around 4.5% these days. The global infrastructure operator has an excellent record of paying dividends. It has increased its payout every year since it came public a decade and a half ago. It has grown the dividend at a 10% annual rate since 2009, including by 6% earlier this year.
The company aims to grow its payout by 5% to 9% annually in the future. It should have no problem delivering on that target, given its expectations that its funds from operations (FFO) per share will continue growing at a double-digit annual rate. It's benefiting from strong growth drivers as it focuses on capitalizing on three global megatrends: decarbonization, digitalization, and deglobalization. It's investing heavily to capitalize on those opportunities by funding high-return expansion projects like data centers and semiconductor manufacturing plants and making accretive acquisitions. It closed $2 billion in deals last year (a global container leasing company and three data center platforms), giving it a lot of momentum for 2024 and beyond.
Gas-driven growth
Williams(NYSE: WMB) yields around 4.9%. The natural gas pipeline giant has paid dividends to its investors for 50 straight years. It has grown its payout at a 6% compound annual rate since 2018, including by 6.1% earlier this year.
The company has lots of fuel to continue increasing its dividend. It's investing heavily in building additional natural gas infrastructure to support growing demand. Williams' current slate of secured capital projects will provide an uplift to its earnings through at least 2027. They help drive its view that it can grow its earnings by 5% to 7% annually over the long term. Meanwhile, its strong financial profile gives it the flexibility to make acquisitions as attractive opportunities arise. It recently spent $2 billion on a major natural gas storage portfolio. These drivers should give Williams the fuel to continue increasing its dividend.
Rock solid income stocks
Surging stock prices have many companies offering rather unappealing dividend yields these days. However, there are some attractive opportunities, with Chevron, Camden Property, Brookfield Infrastructure, and Williams all offering yields above 4%. Furthermore, this quartet has steadily increased their payouts over the years, which seems likely to continue. Those features make them attractive opportunities for income-seeking investors this April.
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Matt DiLallo has positions in Brookfield Infrastructure, Brookfield Infrastructure Partners, Camden Property Trust, and Chevron. The Motley Fool has positions in and recommends Camden Property Trust and Chevron. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.
