The list should simply read “Best Dividend Stocks 2024,” as I’ve been getting a lot of requests for my thoughts on my favorite ones this year.
It’s not a difficult question, although to limit it to just one isn’t easy. After all, there are dozens of quality dividend stocks that are ripe for the picking. In fact, it wasn’t long ago when I recommended buying shares of Civitias Resources (NYSE: CIVI). This is an excellent dividend stock to own.
If you’re unfamiliar, Civitas Resources is a domestic oil & gas producer based in Colorado. This isn’t typically something I’d put in the portfolio. After all, I do tend to avoid investing in industries that treat the planet like a toilet.
That being said, Civitas is different. It’s actually on track to become the state’s first carbon-neutral oil and gas producer by the end of this year. It does this by …
- Using grid electricity for drilling, compression and production facilities where feasible
- Retrofitting legacy facilities and pneumatic devices
- Utilizing tankless or closed-loop production facilities
- Plugging inactive or legacy vertical wells
If all oil & gas producers operated in a similar manner, we could see a massive decrease in some of the environmental burdens resulting from our reliance on oil and gas.
The company’s operations are focused along three of the highest producing, lowest breakeven basins in the United States. Given Civitas’ balance sheet and assets, it’s in an excellent position to thrive as we continue to see consolidation in the Permian region. And let’s face it: like it or not, oil is definitely going to run to $100 again.
Over the past three years, Civitas has delivered gains in excess of 115%. It’s also paying an 8% dividend right now.
Another “Best Dividend Stocks 2024”
This one has actually been in the portfolio for awhile. Hannon Armstrong Sustainable Infrastructure Capital (NYSE: HASI). This is a company that partners with clients to deploy renewable energy and energy efficiency assets.
The stock actually drifted down from a high of $63.43 back in 2020 to a low of $17.14 last October. At that level, it was severely undervalued, but has since begun to inch back up.
Given the company’s $12 billion in assets, the continued growth in the renewable energy space, and a line of credit that was just extended by four years, I expect HASI to have a solid year.
The stock currently trades at around $25 per share. I expect to see that hit $34 a share by the end of the year. This translate to a potential 36% gain with a nice 6.6% dividend to boot.
I’m also including Stellantis (NYSE: STLA) in this list.
You probably know Stellantis primarily known for its iconic automotive brands. But I maintain that its move into the lithium game will give it an advantage over other automakers.
Last year Stellantis and a company called CTR invested more than $100 million to advance the development of CTR’s Hell’s Kitchen project.
This is the world’s largest geothermal lithium project. It has a total resource production capacity of up to 300k metric tons per year. And lithium produced here will support Stellantis vehicles’ EV eligibility for incentives under the Inflation Reduction Act.
Stellantis pays a 6.3% dividend, and it’s currently trading at a small discount at around $24.50 per share. My one-year price target on Stellantis is $29.50.
To recap, here are my top 3 best dividend stocks for 2024:
- Civitas Resources (NYSE: CIVI) – Carbon-nuetral oil & gas play paying an 8% dividend.
- Hannon Armstrong Sustainable Infrastructure Capital (NYSE: HASI) – Renewable energy and energy efficiency assets. Pays a 6.6% dividend.
- Stellantis (NYSE: STLA) – Legacy automaker and now lilthium producer. Pays a 6.3% dividend.
I’m currently looking at a few more attractive dividend plays that fall into the category of “Best Dividend Stocks 2024,” and I will be sharing those with you shortly. So keep a look out for those.
