Cash flow allows you to hold onto your investments while receiving extra money to cover your expenses. Many investors load up on dividend stocks as they get closer to retirement due to their yields.
However, you don’t have to wait until retirement to buy the best dividend stocks. Some corporations issue dividends but also have promising growth prospects. Their stock prices can continue with their rallies and reward long-term investors. Investors looking for promising long-term dividend stocks to buy may want to consider these top picks.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is a new member of the dividend stock club. The company announced its first dividend in Q1 2024 to plenty of fanfare. The first quarterly dividend is set at $0.20, but this payout should have a double-digit growth rate for several years.
While the company has a low 0.45% yield, it’s doing everything else right. Revenue increased by 15% year-over-year (YoY) in the first quarter, as advertising and cloud computing fueled the firm’s growth. Net income increased by 57% YoY, as Alphabet continued to trim its costs.
The stock trades at a reasonable 27 P/E ratio and is up 29% year-to-date. The long-term snapshot is even better, as the stock has gained 216% over the past five years. Analysts are feeling bullish on the stock and have rated it as a Strong Buy. The average price target suggests a 9% upside from current levels.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) has been a beneficiary of the artificial intelligence boom, but the company’s successes as a semiconductor and software giant started well before AI became a buzzword.
The stock is up 28% year-to-date and has rallied 445% over the past five years. Broadcom currently has a market cap above $648 billion, and it wouldn’t be shocking to see this stock exceed a $1 trillion market cap within the next 2 to 5 years. The stock has a projected 12% upside and is rated as a Strong Buy among 24 Wall Street analysts.
Broadcom’s Q1 2024 results suggest that growth should continue. The firm reported a superb 34% YoY revenue growth as the VMware acquisition enabled further upside. Broadcom also repurchased $8.29 billion worth of shares and distributed a quarterly dividend of $5.25 per share. Broadcom has an impressive annualized dividend growth rate of 17.49% over the past five years.
Visa (V)
Visa (NYSE:V) is one of the top credit and debit card issuers. People will continue to use their Visa cards thanks to the convenience, security and rewards. The company makes a small percentage of each transaction. The business model works well, allowing Visa to regularly report net profit margins above 50%.
Combine those high margins with compelling growth rates, and you have a stock setting up to be a long-term winner. Analysts agree and have projected a 15% upside for the fintech firm. It’s currently rated as a Strong Buy. Shares are up 69% over the past five years.
Visa reported 10% YoY revenue growth in Q2 FY24 and held onto the same growth rate for its GAAP net income. Resilient consumers and cross-border volume growth contributed to the company’s financial results. Visa has a 0.75% yield and an annualized dividend growth rate of 18.05% over the past decade.
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG) sells many essential products that people use quite often. Home care, baby products and grooming products are some of P&G’s brand categories. The company is well-diversified, offers more stability than most equities during downturns, and has a 2.39% yield.
Dividend growth has become slower over the years, but the company has several unmatchable dividend streaks. It’s hard to find a company that has been giving out dividends for 133 consecutive years. Most corporations haven’t even been around for that long. Procter & Gamble has increased its dividend for 67 consecutive years.
Procter & Gamble reported 1% YoY revenue growth and 11% YoY EPS growth in Q3 FY24. Investors shouldn’t expect high growth numbers, but the company offers some insulation with its 27 P/E ratio. Shares are up 15% year-to-date and have gained 58% over the past five years. Those gains do not include dividend payouts or reinvestments.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) recently distributed dividends to its investors. The firm announced its first dividend in Q4 2023. The quarterly dividend is currently $0.50 per share, but investors should expect a high growth rate for several years.
The stock yields 0.43% and trades at a 27 P/E ratio. While the yield is low, Meta Platforms has been on a roll that should benefit long-term investors. Shares are up 34% year-to-date and have rallied by 157% over the past five years. Wall Street analysts believe the stock can march higher. It’s rated as a Strong Buy and has a projected 13% upside based on current levels.
Most analysts have raised or reiterated their price targets after the company’s Q1 2024 results. During that quarter, revenue increased by 27% YoY, while net income jumped by 117% YoY. Meta Platforms has been trimming its workforce while achieving exceptional results. The social media giant has a viable path to substantial dividend growth in the years ahead.
Badger Meter (BMI)
Badger Meter (NYSE:BMI) is a water tech company that has been beating the stock market. The stock is up 30% year-to-date and has rallied 276% over the past five years. BMI has a 57 P/E ratio and offers a 0.54% yield. Badger Meter follows the script of most stocks on this list. It has a low yield but an exceptional dividend growth rate. The company raised its quarterly dividend from $0.225 to $0.27 per share in 2023. That’s a 20% YoY increase.
The water solutions firm has impressive financial growth to support further dividend hikes. Revenue increased by 23% YoY to reach a record $196.3 million in Q1 2024. Diluted EPS grew by 50% YoY to reach $0.99 per share. The company closed out the quarter with a 14.84% net profit margin.
Rising demand for Badger Meter’s utility water services contributed to overall revenue growth. This segment grew by 29% YoY.
Waste Management (WM)
Waste Management (NYSE:WM) offers an essential service that communities will always need. The company keeps streets and neighborhoods looking clean. It serves more than 20 million residential, commercial, industrial and municipal customers. Customers will need Waste Management’s services in any economic cycle, which makes the stock more resistant to market downturns.
The company reported 5.5% YoY revenue growth and expanded its net income by 32.8% YoY. Waste Management came out of the quarter with a 13.72% net profit margin. The stock trades at a 34 P/E ratio and has a 1.44% yield. The firm’s annualized dividend growth rate currently stands at 8.36% over the past five years. Waste Management has also increased its dividend for 21 consecutive years.
Long-term investors will like the “buy and forget” nature of this stock. It has a vast customer base that must continue to use its services. Waste Management only has a 46.55% dividend payout ratio, which offers plenty of room for growth.
On this date of publication, Marc Guberti held long positions in GOOG and AVGO. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.