7 Dividend Stocks That Could Surge After First Quarter Earnings Reports

Dividend investing can make you rich, but you need to choose the right stocks. Whether you’re just starting your investing journey or you’re a pro, there’s nothing better than receiving income without having to work for it. Earnings season is a good time to focus on the highest dividend stocks and add them to your portfolio. I’ve identified seven dividend stocks that are worth buying because they’re poised to grow after seeing strong fundamentals. They are dividend kings with consistent cash flow and a commitment to rewarding shareholders.

These companies have weathered several market ups and downs and are capable of weathering any storm. While some of these companies are trading at a discount due to current economic uncertainty and market volatility, they are gems worth holding on to for a decade. They will offer passive income as your capital grows over the years. Let’s take a look at them.

Dividend stocks to buy: PepsiCo (PEP)

A giant in the drinks and snacks industry PepsiCo (NASDAQ:ENERGY) did not have a good start to the year. PEP shares are up 3% year to date and haven’t gained much. The stock is trading at $179 and is a buy on the decline.

The company’s business is doing well and even if it sees a decline in sales volume in one quarter, it will not impact its long-term business prospects. If you’ve been waiting for stocks to decline before making a move, now is the time.

PepsiCo is much more than a beverage company and generates over half of its revenues from the food segment, this diversification is the reason why it is worth investing in this company. Thanks to this, the company can enjoy constant growth. PepsiCo reported 2.7% organic sales growth in the first quarter and forecasts 4% sales growth for full-year 2024.

If you’re a passive income investor, the 3.02% dividend yield and consistent dividend growth should be reason enough to hold the stock. As summer approaches, PepsiCo may have better days ahead.

Johnson & Johnson (JNJ)

Dividend aristocrat Johnson and Johnson (NYSE:JNJ) is a safe stock in times of market uncertainty. Both of its segments are developing dynamically: innovative medicine and MedTech.

The Innovative Medicine sector saw sales increase 2.5% to $13.6 billion, while the MedTech division grew 6.3% to $7.8 billion. billion. The company enjoys a dominant position in the market, and the success of its drugs and cardiovascular products has enabled it to achieve tremendous growth.

The stock is trading at $149 and is down 6% year to date, and this decline is an opportunity to make a move. It is very close to its 52-week low of $143 and could continue to fall before it surges higher. Dividend stocks will increase the stability and security of your investment portfolio. It enjoys a dividend yield of 3.31%, and in its first quarter results it announced an increase of 4.2%. JNJ is one of the highest dividend stocks to buy.

Johnson & Johnson has seen steady cash flow growth and ended the quarter with $26 billion in cash. It has a top-notch balance sheet and has been paying a dividend for 62 years. Buy stocks before they go up.

American Express (AXP)

There are two reasons why you should bet American Express (NYSE:AXP). One of them is the growing shift from cash to cards. Demand for cards will grow as people around the world continue to use debit and credit cards.

Secondly, the company managed to attract the attention of the younger generation. About 60% of new customer accounts came from Gen Z and Millennials. This specific demographic is climbing the earnings ladder and can use debit and credit cards for all of their purchases, making American Express indispensable.

American Express reported first quarter net revenue growth of 11% year-over-year to $15.8 billion and net income growth of 34% year-over-year to $2.4 billion. It added 3.4 million cards this quarter.

The stock, trading at $235, is up 25% year to date and is up 56% over the past 12 months. The company has a steady source of income, and as the use of American Express cards increases, it will earn more. It has increased its dividend by 17% this year and enjoys a yield of 1.19%.

Caterpillar (CAT)

There are several reasons why you should bet Caterpillar (NYSE:CAT) warehouse. The world’s largest construction equipment manufacturer announced impressive first-quarter results. The company operates a diversified business serving multiple industries, with revenue of $15.8 billion and net income increasing 47% year over year to $2.86 billion.

Management expects 2024 sales to be similar to 2023, but I don’t think this will impact the dividend. CAT stock, trading today at $350, is up 19% year-to-date and 67% over the past 12 months.

It has an envious balance sheet and steady cash flow, which allows the company to offer a dividend yield of 1.48%. Currently, the focus is on increasing service revenues to ensure the company does not suffer in extreme market conditions.

Caterpillar has a global presence and operates in an industry that is never short of demand. It is a mature company that can benefit from the growing importance of the construction industry. The company has raised its dividend for three decades in a row, making it one of the highest dividend stocks we own.

Dividend Stocks to Buy: Walmart (WMT)

Impressed by the first quarter data, Walmart (NYSE:WMT) shares rose from $59 to $64 per day. The stock is trading at $64 today and is up 22% year-to-date and is quietly moving higher. When inflation comes down, Walmart will be the first to benefit because we will never stop spending money on groceries and household items.

It had revenue of $161 billion and EPS of $0.60. The company isn’t one to sit back and watch consumer preferences change, instead taking advantage of every opportunity to grow. It invested in the e-commerce segment and recorded a 22% increase in e-commerce sales in the last quarter.

Despite economic challenges, Walmart is ready to take off. Having paid dividends for over 50 years, the company recently announced a 9% dividend increase. With a dividend yield of 1.28%, WMT stock is a long-term buy and hold, and at current levels it looks inexpensive to me. It certainly has the potential to raise its dividend in the coming quarters and is one of the best dividend stocks to buy.

Morgan Stanley (MS)

Another fintech company I love Morgan Stanley (NYSE:MS) returned to normal as the situation in the investment banking sector improved. The company saw a 16% increase in revenues in this investment banking unit, while a 5% increase in revenues in its wealth management unit.

It reported revenue of $15.14 billion and saw EPS grow massively by 138% quarter-over-quarter and 19% year-over-year to $2.02.

Morgan Stanley is currently in a strong position and gaining momentum for the coming months. There was also an increase in revenues from debt guarantees by 100% y/y. Reducing interest rates and improving economic prospects could benefit the company.

After changing hands at $98, the stock is up just 5% year-to-date and I believe it has a long runway. Its dividend yield is 3.44% and it pays an annual dividend of $3.40. Warren Buffett favorite stock, Morgan Stanley will remain in the market and the investment banking industry will continue to drive growth.

Domino’s Pizza (DPZ)

Fast food giant Pizza from Pizzeria Domino`s (NYSE:DPZ) makes slow and steady movements. At the time of writing, DPZ shares are trading at $502 and are up 21% year-to-date and 63% over the last 12 months. The company’s dividend is as tasty as pizza. With a dividend yield of 1.20%, Domino’s has increased its dividend payments for the last 12 years and I am confident that it will continue to do so.

In the first quarter, revenues grew 7.3% and EPS was $3.58, better than expected. The company’s net income increased 20% to $126 million, and U.S. same-store sales increased 5.6%.

Domino’s expansion strategy is paying off and it has managed to open many stores around the world. It aims to open 1,100 stores by 2028. The company’s effective marketing and pricing policy has helped it reach new heights and I am sure your investment will pay off in the coming years. Domino’s is a global leader, a household name and has a long way to go.

As of the date of publication, Vandita Jadeja did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing guidelines.