Welcome to our new post top dividend stocks to buy in January. In this article, we will list out some of the top January dividend stocks to buy as per analysts.
But first, let’s have a walk down the memory lane. During the previous year (2023), the dividends did not hold much importance for the investors in comparison to earlier times. This was because spotlight was given to globally recognised technology stocks which underperformed in 2022.
How much return was delivered by Nasdaq index, which is heavily made up of technology stocks? Which technology stocks actually prompted investors to actually forget dividends and focus on technology scrips?
Nasdaq index turned several heads in 2023 as the index delivered exceptional return of ~43% throughout 2023. This showcased the strong comeback for the overall index as the index exhibited impressive performance since the year 2020. As the result of this strong return, the investors focused on these tech stocks, eclipsing the importance of dividends for several investors during 2023.
Did the US companies stop paying dividends as investors were more focused on growth stocks? Well, not really! Despite this shift, the US companies remained focused on rewarding shareholders in the form of dividends. According to the report by S&P Dow Jones Indices, in 2023, S&P 500 companies paid dividends, placing a fresh milestone as they gave annual record of $70.30 per share to the investors. This exhibits a strong rise from prior year’s figure of $66.92 per share.
In addition, collective sum which was distributed to shareholders touched all-time high of $588.2 billion. This exhibits a strong increase from previous year’s $564.6 billion.
This report also details that, in Q4 FY 2023, the companies decided to take a careful stance about the dividend payments. That being said, Wall Street analysts remain positive regarding the dividend stocks in 2024.
With this in mind, we will now have a look at top January dividend stocks to buy as per analysts.
1. AT&T Inc.
The company has been categorised as 3rd largest US wireless carrier, which connects 67 million postpaid and 17 million prepaid phone customers.
This company is one of the top January dividend stocks to buy as it has been paying dividends consistently to the shareholders since the year 1995. It offers quarterly dividend of $0.2775 per share, with the dividend yield of ~6.44% as on 4th January 2024. Its stock will go ex-dividend on 9th January.
It has reported strong 3Q results, which were built on overall momentum. Revenues of the company came in at $30.4 billion, exhibiting a rise of 1% year-over-year. Cash from operating activities was $10.3 billion, a rise of $0.2 billion or 2.4% year-over-year.
Investments made by the company in best-in-class 5G and fiber connectivity continue to support its growth engine. It continues to gain profitable customer relationships and is becoming more and more efficient. This has been supporting its strong business performance.
The company’s mobility service revenues went up by ~3.7% and it achieved company’s best-ever mobility operating income. Revenues for 3Q came at $30.4 billion in comparison to $30.0 billion in the previous year quarter, up by 1.0%. This rise mainly exhibits the increased Mobility, Mexico and Consumer Wireline revenues. This was partly offset by reduced Business Wireline revenues. Growth in revenue increases also exhibit positive impacts of FX rates in Mexico.
It now expects full-year FCF of ~$16.5 billion in comparison to previous guidance of $16 billion or better.
2. Darden Restaurants, Inc.
The company is a largest restaurant operator in the US full-service space.
It continued to increase its payouts every year since it reinstated dividends in the month of September 2020. On December 15, it announced quarterly dividend of $1.31 per share, which remained in line with the previous dividend. As at January 4, the company’s stock provides dividend yield of ~3.27%.
It has announced results for 2Q24, with total sales increasing by ~9.7% to $2.7 billion. This was supported by blended same-restaurant sales rise of 2.8% and sales from addition of 78 company-owned Ruth’s Chris Steak House restaurants along with 45 other net new restaurants.
The company continued to profitably increase its market share this quarter as it outperformed industry same-restaurant sales and traffic. Its focus remains on managing business over long term and enabling healthy operating fundamentals in its restaurants.
For FY24, it expects total sales of ~$11.5 billion and same-restaurant sales growth of 2.5% – 3.0%. It anticipates diluted net EPS from continuing operations in the range of $8.75 – $8.90. This excludes ~$0.37, after-tax, of Ruth’s Chris transaction along with integration related costs.
Board of Directors of the company announced the quarterly cash dividend of $1.31 per share. Dividend remains payable on 1st February 2024 to the shareholders.
3. Oracle Corporation
The company provides database technology and enterprise resource planning, or ERP, software to the companies globally.
It announced its fiscal 2Q24 results Total quarterly revenues saw an increase of 5% year-over-year in USD and was up by 4% in constant currency to touch $12.9 billion. Its cloud services and license support revenues increased 12% in USD and was up 11% in constant currency to reach $9.6 billion.
Over the previous 12 months, the company’s operating cash flow was $17.0 billion and FCF of $10.1 billion. Demand for the company’s Cloud Infrastructure and Generative AI services continues to increase at an astronomical rate.
Board of directors of the company announced the quarterly cash dividend of $0.40 per share. Payment date has been set at 25th January 2024.
Conclusion
While above are some of the top January dividend stocks to buy as per analysts, there are several other stocks which have potential to deliver strong gains.
Let us now see what experts have to say! Jeremy Siegel, author of “The Future for Investors,” mentioned significant impact of reinvesting dividends over the total stock accumulation. Author mentioned that ~97% of actual stocks’ accumulation results from the regular reinvestment of dividends. On the other hand, only ~3% comes from the capital gains.
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