2 Dividend Stocks to Buy Before Their Expected Payout Hikes in 2024


The best dividend stocks raise their payouts like clockwork. Investors love the fact that they don’t need to worry about economic downturns or temporary earnings shortfalls interrupting these regular increases. The companies have ample cash holdings, after all, and long track records for generating profits through every phase of the economic cycle.

Shareholders can’t know ahead of time just how big any particular raise will be, as it depends on management’s reading of the market conditions heading into the new fiscal year. But it’s still likely to be a positive piece of news for the business and for investors.

With that in mind, let’s look at two attractive dividend stocks set to announce their 2024 payout hikes in the coming weeks.

1. Home Depot

Home Depot (HD -0.79%) will reveal its 2024 dividend hike as part of its fiscal fourth-quarter results in mid-February, but investors don’t have to wait until then to consider buying this high-performing stock. The home improvement retailer’s last boost was a hefty 10%, and it followed a decent year in 2022, in which comparable-store sales (comps) rose 3% and earnings expanded at an 8% rate.

Expectations aren’t as high for the fiscal 2023 year that just ended. Management is forecasting that comps will decline by between 3% and 4%, in fact, as earnings fall by about 10%. Yet the chain is outperforming peers like Lowe’s Companies in both areas, partly thanks to Home Depot’s bigger market share among professional contractors.

Short-term prospects for the housing market are brightening thanks to good economic growth trends. Investors should be even more excited about the long term, though.

Factors like favorable demographic shifts, an aging stock of housing, and continued rising prices all point to many more years of growth ahead. “We remain very positive on the medium to long-term outlook for home improvement,” CEO Ted Decker told investors in August. Look for executives to echo those bullish comments when they describe their 2024 capital return plans in a few weeks.

2. Coca-Cola

Coca-Cola (KO -0.72%) was among the worst-performing stocks on the Dow Jones Industrial Average last year. That’s a good reason to consider buying this Dividend King, though, as its yield has been lifted by that weak stock price trend.

You can get an immediate yield of over 3% by owning Coke today, with many years of dividend gains likely on the way. Consider its strong 2023 operating performance, for example. Despite slowing consumer spending and consumers’ price sensitivity last year, Coke is beating its original sales and earnings targets. Organic sales were up 11% in the most recent quarter as profit margin expanded, and management lifted its 2023 forecast in response.

Coke is getting contributions from both rising sales volumes and increased prices, suggesting healthy global demand for its biggest franchises like Coke, Coke Zero, and Fanta. The beverage giant has good exposure to faster-growing niches like energy drinks, teas, and sparkling waters, too. And its profit margin is roughly double PepsiCo‘s level.

The 2023 dividend hike, expected in mid-February, will follow last year’s 5% increase. There’s a good chance that investors will see a bigger increase in 2024 since Coke is expecting earnings to rise by about 13% after adjusting for currency exchange rate swings. In any case, this dominant consumer staples giant is on track for its 62nd consecutive annual increase, giving it one of the longest unbroken streaks on the market.

Demitri Kalogeropoulos has positions in Home Depot. The Motley Fool has positions in and recommends Home Depot. The Motley Fool recommends Lowe’s Companies. The Motley Fool has a disclosure policy.



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