Best Dividend Stocks To Consider In December 2024

As we approach the end of 2024, investors are looking for stable, income-generating investments to weather the ongoing economic uncertainty and volatility. Dividend stocks, known for their steady payouts, remain an attractive option. However, the sustainability of these dividends depends on the companies' financial health and ability to navigate economic headwinds. In this article, we will explore the best dividend stocks to consider in December 2024, focusing on undervalued, quality dividend stocks with durable dividends and economic moats.

The Morningstar Dividend Yield Focus Index highlights undervalued, quality dividend stocks that are well-positioned to maintain their dividends even in challenging economic conditions. Two standout energy giants, Exxon Mobil (XOM) and Chevron (CVX), are trading at discounts of 15% and 12% respectively, despite their high dividend yields of 3.38% and 4.20%. These companies have wide economic moats and strong balance sheets, enabling them to maintain their dividends even in uncertain economic environments.

In addition to energy stocks, consumer goods stocks offer attractive yields and proven track records of dividend increases. Conagra Brands (CAG) and Hormel Foods (HRL) provide yields of 4.9% and 3.5%, respectively, and have consistently grown their dividends over time. These companies' stable earnings and cash flows make them well-positioned to maintain and grow their dividends, even in the face of economic uncertainty.

Companies with economic moats and competitive advantages tend to have more durable dividends. These companies have pricing power, which allows them to pass along price increases to consumers and maintain or even grow their dividends during inflationary times. In the Morningstar Dividend Yield Focus Index, companies with wide economic moats, like Johnson & Johnson (JNJ) and PepsiCo (PEP), have consistently grown their dividends and are undervalued by at least 5% as of Dec. 6, 2024. These companies' competitive advantages make them attractive choices for long-term dividend growth.



To identify undervalued dividend stocks with strong growth prospects in December 2024, investors should focus on companies with a history of consistent dividend increases, wide economic moats, and attractive valuations. The Morningstar Dividend Yield Focus Index can be a useful starting point, as it includes companies that have grown their payouts for at least five consecutive years and are undervalued by at least 5%. Additionally, investors should consider companies with strong fundamentals, such as solid cash flow generation and earnings growth, as these factors can support continued dividend growth.

In conclusion, the best dividend stocks to consider in December 2024 are undervalued, quality dividend stocks with durable dividends and economic moats. By focusing on companies with consistent dividend growth, wide economic moats, and attractive valuations, investors can identify undervalued dividend stocks with the potential for strong long-term performance. As the economic landscape continues to evolve, carefully selected dividend stocks can provide a stable income stream and potential long-term growth.