3 Dividend Stocks for October 2024

David Harrell: Hi. I’m David Harrell, editor of the Morningstar DividendInvestor newsletter. In this monthly series, we take a look at the dividend prospects of three stocks that are popular with income investors.

3 Dividend Stocks for October 2024

1. Bristol-Myers Squibb BMY
2. Verizon VZ
3. Polaris PII

Yielding around 4.5%, Bristol-Myers Squibb has grown its dividend at a solid 7.5% annualized over the past five years, and the stock trades at a 15% discount to its fair value estimate. While Morningstar analysts forecast a tough fiscal 2024 for the pharmaceutical firm, they believe the dividend is sustainable and forecast dividend growth over the next four years, with the current annual dividend of $2.40 a share rising to $2.55 a share by 2028. They also note that the firm’s payout ratio is well below 50%.

Trading at a 30% discount to fair value, powersports manufacturer Polaris yields 3.2%, but recent dividend growth has been paltry at 1.6% annualized over the past five years, as the company has raised its quarterly dividend rate by a penny each year since 2018.

Verizon has the largest cellular customer base in the US, and it recently raised its dividend by 1.9%, bringing its yield to 6.0%. Verizon’s dividend growth over the past five years has been modest, at 2% annualized. Given the recently announced Frontier deal—Verizon will acquire Frontier Communications in an all-cash transaction, which will push Verizon’s debt-reduction goal further off—it seems extremely likely that future dividend growth will remain similarly modest. The stock currently trades at a 15% discount to its $53 Morningstar fair value estimate.

I’m David Harrell from Morningstar DividendInvestor. Thanks for watching, and we’ll see you next month.

Watch 3 Dividend Stocks for September 2024 for more from David Harrell.

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