If you like dividends, you should like these 3 stocks

Given the state of the economy right now, it is understandable that dividend stocks will be among the most popular investments around the world. Not only are you giving up the opportunity for long-term capital appreciation by owning it, but you also gain immediate passive income from its fixed quarterly payments. Dividend stocks tend to be stronger financially, too, because their management teams have an extra incentive to maintain positive — and growing — dividends every year. These properties can be very attractive in times of economic uncertainty.

However, not all dividend stocks are worth having in your income portfolio. There is a mix of winners and losers in this investment area that is similar to what you would find in any other area of ​​the market. With that in mind, let’s take a look at three standout options that are attractively priced today.

1. Garmin

Garmin (German 0.54%) It is a technology company focused on sales growth, but it still pays a strong dividend that currently stands at more than 2%. The GPS device specialist delivers excellent operating results as well. Revenue in the third quarter rose 12% year over year as four of its five major segments set sales records. This performance demonstrated the strength of Garmin’s diversified revenue streams as well, as gains in areas such as fitness trackers and smart watches offset weaker growth in its marine and aviation divisions.

Garmin generates ample cash flow that management mostly directs toward further growth through areas such as research and development. This is because a constant flow of product launches is necessary to lay the foundation for increased revenue. However, its high profit margin (more than 21% of sales last quarter) also leaves room for a generous dividend to enhance shareholder returns over time.

2. McDonald’s

McDonald’s (Mkd -0.23%) It’s not just one of the most profitable companies in the fast food industry; They are also among the most profitable companies in the stock market. The restaurant owner’s operating profit margin recently exceeded 45% on sales thanks to a combination of strong demand, rising prices and a steady stream of franchise fees, royalties and rent from his partners.

There are certainly some challenges to this work. McDonald’s reported a modest decline in customer traffic in its core U.S. market last quarter, which investors hope is just a temporary blip in its broader positive growth story. Competitors like Chipotle Mexican Grill It is increasingly targeting the drive-thru channel and aims to gain share from the industry leader as well.

However, McDonald’s has dealt with many of these experiences in its history, as evidenced by its 47-year track record of consecutive annual profit increases. 2024 returns will be 10% higher than last year, which shareholders should find particularly tasty for their total returns.

3. Costco Wholesale

Costco wholesale (it costs 1.43%) It’s not your traditional retail business because most of their profits come from membership fees and not from product labels. The wholesale club earns nothing from its huge sales base of merchandise. However, Costco is still a cash-rich company, as you can see from management’s recent decision to send a $7 billion special dividend to distribute to its shareholders. Cash balances should remain well above $10 billion after this payment.

You may prefer a more consistent, increasing dividend payout over these sporadic one-time checks. But Costco investors could cut back on the company’s lag in this area given the chain’s excellent track record of growing market share in the highly competitive retail industry. That’s why, looking back in a few years, there’s a good chance you’ll love having this dividend payer in your portfolio.