Investors often seek out dividend stocks as a way to generate passive income and reduce market volatility. While these stocks are typically considered safe and stable, there are times when even the most unassuming companies can outperform the market. In the past six months, three such companies have seen impressive gains: Walmart, Clorox, and Kenvue.
Walmart, a retail giant, has seen its stock price surge by a remarkable 42.5% in the last six months. This growth can be attributed to the company’s ability to provide value to consumers across different income brackets. Walmart has managed to attract higher-income customers while still offering everyday value, leading to significant market share gains in both grocery and general merchandise. Additionally, Walmart’s innovative services like Walmart+ contactless delivery and Walmart Marketplace have contributed to its success.
Despite its impressive performance, Walmart’s stock has become more expensive, and its dividend yield has fallen to just 1%. However, with 51 consecutive years of dividend raises, Walmart remains a reliable choice for investors looking for long-term stability and growth potential.
Clorox, a household cleaning and consumer goods company, has also seen a notable increase in its stock price, up by 30.4% in the past six months. While Clorox has faced challenges in recent years, including overestimating demand trends during the pandemic and falling victim to a cyberattack, the company is now on track to return to growth. With a 40-year track record of dividend raises and a 2.9% yield, Clorox remains an attractive option for investors seeking passive income in the consumer staples sector.
Kenvue, a spinoff of Johnson & Johnson’s consumer health division, has seen its stock price rise by 27.6% in the last six months. While Kenvue is not a high-growth company, it offers stability and a steady dividend growth potential. With a dividend yield of 3.4% and a reasonable forward P/E ratio of 21.1, Kenvue presents a compelling opportunity for risk-averse investors focused on capital preservation.
In conclusion, while dividend stocks are often seen as safe investments, companies like Walmart, Clorox, and Kenvue demonstrate that even established, “boring” companies can deliver impressive returns. By focusing on companies with strong fundamentals, innovative strategies, and a history of dividend growth, investors can find opportunities for both income generation and capital appreciation in the stock market.
