In This Article:
When the market turns south, investors often rush toward conservative investments to fortify their portfolios. Of the many low-risk stocks that they may consider, dividend stocks often find themselves in high demand.
For those keen on identifying stocks that have the potential to deliver steady passive income for not just years but decades, Chevron (NYSE: CVX) and Realty Income (NYSE: O) are great high-yield opportunities with forward-yielding dividends of 4.4% and 5.7%, respectively right now. Meanwhile, Dividend King American States Water (NYSE: AWR), with its 2.4% forward yield, represents another enticing option.
Now's the time to fuel up on Chevron stock
Markets have been flinching at President Donald Trump's enthusiasm for raising tariffs on U.S. trade partners. Investors' fears are growing, consequently, at the prospect of continued volatility, and energy prices have steadily declined. Despite this, Chevron stock has remained remarkably resilient. While U.S. oil benchmark West Texas Intermediate has fallen more than 8% since the start of the year, Chevron stock has risen over 8%, signaling perhaps that energy investors are confident that the oil supermajor can withstand the volatility.
Enduring volatility -- and continuing to hike the dividend higher all the while -- is something that Chevron has consistently done. The company has raised its payout for 38 consecutive years, a period that has included plenty of downturns in energy prices. While comparable dividend hikes are hardly guaranteed, this feat is an auspicious sign that management is committed to rewarding shareholders.
Moreover, management is confident that the company will generate ample free cash flow in the future, which will further ensure the security of the dividend. The company projects it will generate free cash flow of more than $10 billion in the next two years alone thanks, in part, to two chemicals projects that are currently under construction and growth in production from assets in the Eastern Mediterranean.
Quench your income thirst with American States Water
With a 94-year history of paying dividends and a 70-year history of hiking its dividend, investors would be hard-pressed to find many companies more committed to rewarding shareholders than American States Water. While the company operates the Golden State Water Company, a regulated utility that provides water service, it also owns the Bear Valley Electric Service, which provides electricity distribution to about 25,000 customers in California.
Combined, these two regulated utilities represent the lion's share of the company's business: about 90% of revenue in 2024. In addition, they supply the company with predictable cash flows that, in turn, provides management with a clear sense of how to plan for future capital expenditures like infrastructure upgrades and dividend payments.