4 Dividend Stocks to Double Up on Right Now -- Including Chevron and Verizon

Amidst an uncertain economic outlook characterized by inflation and potential market volatility, the article advocates for dividend-paying investments as a resilient strategy. It highlights specific opportunities including Chevron (CVX) for its 4.5% yield and 38-year dividend growth, Vici Properties (VICI) for its 5.8% yield from stable casino-backed REIT assets, and Verizon Communications (VZ) for its 6.8% yield and undervaluation despite debt. For diversified exposure, the Schwab U.S. Dividend Equity ETF (SCHD), yielding 3.8% with a strong historical performance, is also recommended, offering income and potential stability for institutional portfolios.

Analysis

The current economic climate, characterized by high inflation and potential market consolidation following a 16% S&P 500 gain, underscores a defensive investment strategy. Dividend-paying stocks are presented as a resilient option, offering consistent payouts regardless of economic fluctuations. This approach aligns with a moderately positive sentiment towards income-generating assets in an uncertain market environment.

Chevron (CVX) is noted for its 4.5% dividend yield and a 38-year track record of annual dividend increases, supported by its integrated energy operations. However, its forward P/E ratio of 18.2, above its five-year average of 13.2, suggests it is not currently a bargain. Vici Properties (VICI), a REIT specializing in casino and entertainment real estate, offers a 5.8% yield and a forward P/E of 10.8, below its five-year average of 12.5, indicating potential value.

Verizon Communications (VZ) provides a substantial 6.8% dividend yield and appears undervalued with a forward P/E of 8.5, below its five-year average of 9, despite its high debt load. For diversified exposure, the Schwab U.S. Dividend Equity ETF (SCHD) offers a 3.8% yield and a 10-year average annual gain of 11.5%, providing a broad, lower-risk entry into dividend investing.

Key Decisions for Investors

• Consider increasing allocation to high-quality dividend-paying equities or ETFs like SCHD to enhance portfolio stability and income generation amidst prevailing economic uncertainties.
• Evaluate individual dividend payers such as Chevron (CVX) for long-term income growth potential, acknowledging its current valuation premium, and Vici Properties (VICI) for its attractive yield and stable, real estate-backed cash flows.
• Assess Verizon (VZ) for its high dividend yield and potential undervaluation, while closely monitoring its debt profile and competitive positioning within the telecommunications sector.