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The Top 3 Dividend Stocks I’d Put My Next $5,000 To Work In
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If you're sitting on $5k and itching to deploy this capital into reliable dividend payers amid this market rotation, I've got three blue-chips which look like screaming buys right now to consider. Kimberly-Clark offers a 4.6% yield and grew organic sales 2% despite price investments in key categories. General Mills posted $4.86B revenue and beat EPS by 7.1% but organic sales declined year-over-year. Paychex revenue surged 18% and operating income rose over 20% with benefits from rising interest income. READ: The analyst who called NVIDIA in 2010 just named his top 10 AI stocks The analyst who called NVIDIA in 2010 just named his top 10 AI stocks. Get them here FREE. These dividend aristocrats blend juicy yields, growth, and dirt-cheap valuations. In my view, that makes these stocks perfect vehicles for compounding your wealth. Kimberly-Clark (NASDAQ:KMB) is a leader in the consumer staples and personal care giant, best known for its defensive positioning (can't stop buying those baby wipes, it's not possible). With a 4.6% dividend yield and strong top- and bottom-line growth driven by key divestitures and operational streamlining efforts, Kimberly-Clark is one of my top defensive picks in this market for those looking to generate yield. With a mid-single-digit dividend growth rate over the long-term, and years of dividend growth backing up its current distribution, I think Kimberly-Clark is well-positioned to deliver more earnings and dividend growth over time. That's due mostly to the company's defensive cash flow structure, but also its balance sheet strength. This past quarter, the company beat estimates by a significant margin on the bottom line, with revenue coming in line. Notably, organic sales grew more than 2% on solid 3% volume/mix gains, despite investments in price in some of its key product categories. This is a stock that's proven thus far to be relatively inflation-resistant, and that's a great thing for those looking for long-term dividend stalwarts in the portfolio. General Mills (NYSE:GIS) is another consumer staples giant, with its portfolio of cereal brands and other staples we simply can't go without continuing to drive solid results. This past quarter, the company beat estimates with adjusted EPS coming in at $1.10 versus $1.03 expected (7.1% surprise). On the top line, revenues of $4.86 billion topped $4.77 billion forecasted (handily), though this did represent a year-over-year drop. And while organic sales are on the decline, the decline this past quarter was less than expected, assauging some investor concerns around how inflation may impact the company's core portfolio. That's not to say operating margin and volume challenges won't persist. I think that's likely. However, the Cheerios maker has taken on some significant cost discipline to bolster its balance sheet, which should provide stability to General Mills' 5.4% dividend yield. Paychex (NASDAQ:PAYX) is about as sensitive to the U.S. workforce as any stock in the market. A company that generates its revenue and earnings from processing paycheck payments for millions of Americans (hence its name), Paychex has seen relatively strong numbers despite concerns about the jobs market deteriorating. I think that's a solid backdrop, considering the pace of private industry hiring versus the public sector. In fact, this past quarter was a very solid one for Paychex and its investors. Revenue surged 18% year-over-year, beating estimates by more than 10%. Bottom line earnings also beat by a similar marking, with adjusted operating income increasing more than 20% year-over-year. So, if there is a slowdown in the jobs market, don't tell Paychex's management team. The company's ability to benefit from rising interest income (as the yield curve steepens) and provide investors with a 4.6% dividend, means this is a beaten-down software stock I think is worth considering on any further declines moving forward. Wall Street is pouring billions into AI, but most investors are buying the wrong stocks. The analyst who first identified NVIDIA as a buy back in 2010 — before its 28,000% run — has just pinpointed 10 new AI companies he believes could deliver outsized returns from here. One dominates a $100 billion equipment market. Another is solving the single biggest bottleneck holding back AI data centers. A third is a pure-play on an optical networking market set to quadruple. Most investors haven't heard of half these names. Get the free list of all 10 stocks here.