3 Dividend Stocks to Consider in January 2025

As we enter the new year, investors are looking for stable and growing income streams. Dividend stocks can provide just that, offering a steady income stream and the potential for capital appreciation. Here are three dividend stocks to consider in January 2025, based on their strong fundamentals, dividend growth, and attractive valuations.



1. Comcast Corporation (CMCSA)
Comcast is a leading provider of cable, internet, and phone services, as well as a major player in the media and entertainment industry. The company has a strong track record of dividend growth, increasing its quarterly dividend by $0.02 a year for the past six years. This consistent dividend growth has resulted in an annual dividend rate of $1.24 per share, yielding approximately 3.3% at the current share price.

Comcast's dividend is well-covered by its free cash flow, with a payout ratio of around 40%. The company's strong balance sheet and cash flow generation provide ample flexibility to maintain and grow its dividend. Morningstar analysts expect Comcast's annual dividend to reach $1.48 by 2028, reflecting a continuation of the company's consistent dividend growth.



2. Merck & Co. (MRK)
Merck is a global healthcare company that develops, manufactures, and markets a wide range of prescription and over-the-counter medicines, vaccines, and animal health products. The company has a strong history of dividend growth, with an annualized dividend growth rate of 8.3% over the past five years. Merck recently announced a 5.2% increase in its quarterly dividend, bringing its forward yield to 3.2%.

Merck's dividend is well-supported by its earnings, with a payout ratio of close to 50% relative to adjusted earnings per share. The company's strong financial position and steady earnings growth provide a solid foundation for continued dividend growth. Morningstar analysts expect Merck's annual dividend to reach $3.96 per share by the end of 2028.



3. United Parcel Service (UPS)
United Parcel Service is a global leader in logistics and package delivery, offering a broad range of services to businesses and consumers. The company has a strong track record of dividend growth, with an impressive annualized dividend growth rate of 12.2% over the past five years. Although the most recent increases have been more modest, UPS' dividend growth remains attractive.

UPS' dividend is well-covered by its earnings, with a payout ratio of around 50%. The company's strong cash flow generation and financial position provide a solid foundation for continued dividend growth. Morningstar analysts expect UPS' annual dividend to reach $7.24 per share by 2028.



In conclusion, Comcast, Merck, and UPS are three dividend stocks to consider in January 2025. Each company has a strong track record of dividend growth, attractive yields, and solid fundamentals. By investing in these dividend stocks, investors can build a stable and growing income stream while potentially benefiting from capital appreciation. As always, it's essential to conduct thorough research and consider your individual investment goals and risk tolerance before making any investment decisions.