3 Dividend Stocks to Buy on the Dip: March 2024

Dividend stocks to buy are popular assets for long-term investors and people who are planning for retirement. These stocks can generate steady cash flow which is enough to get plenty of attention. However, some dividend stocks don’t offer much beyond cash flow and are at risk of cutting their dividends.

You don’t want to get stuck with those types of investments. Knowing what makes a good dividend stock and being clear on your portfolio goals can result in promising cash flow and appreciation. Investors may want to consider these three dividend stocks on any dips.

So here are three dividend stocks to buy.

Caterpillar (CAT)

Buildings and highways need to be built, and commercial properties have to start from somewhere. The construction industry covers a lot of ground in the residential and commercial sectors, but the people in these industries need the right tools to complete projects.

Caterpillar (NYSE:CAT) is a leading construction company that produces the heavy duty equipment that is necessary for these types of jobs. The company is approaching its 100 year anniversary and is likely to reach its 200th anniversary as well. 

The reliable dividend stock almost doubled its profit per share in the fourth quarter of 2023. Revenue increased by 3% year-over-year while full-year revenue jumped by 13% year-over-year. The company’s full-year sales were a record in the company’s 98-year history.

Caterpillar stock trades at an 18 P/E ratio and offers a 1.45% dividend yield. Dividend growth has still been going strong and jumped from a quarterly $1.20 per share to $1.30 per share in 2023. That’s an 8.3% year-over-year increase. The stock has logged impressive gains beyond its dividend. Shares are up by 63% over the past year and have soared by 164% over the past five years.

IBM (IBM)

Many investors gave up on IBM (NYSE:IBM) in the 2010s and it wasn’t hard to blame them. Shares still trade below the all-time high from 2013. Investors who bought shares in 2011 could have been still sitting on a loss in mid-2023.

Cloud computing and artificial intelligence have both breathed new life into the stock. Shares are up by 55% over the past year and have already jumped by 18% year-to-date. IBM has outperformed three of the Magnificent Seven stocks so far in 2024 while having a 3.50% dividend yield. The stock also trades at a 24 P/E ratio.

Dividend growth isn’t all that exciting as the corporation has done the bare minimum for years. For instance, the company hiked its quarterly dividend from $1.65 per share to $1.66 per share in 2023. That isn’t inspiring, but you already get a high yield and growth prospects. This makes it one of those dividend stocks to buy.

Revenue increased by 4% year-over-year in the fourth quarter of 2023 while net income was up by 21% year-over-year. IBM CEO Arvind Krishna shared encouraging remarks about artificial intelligence and cloud computing.

“In the fourth quarter, we grew revenue in all of our segments, driven by continued adoption of our hybrid cloud and AI offerings. Client demand for AI is accelerating, and our book of business for Watsonx and generative AI roughly doubled from the third to the fourth quarter,” he stated.

Cintas (CTAS)

Cintas (NASDAQ:CTAS) is a dividend growth stock that requires patience for income-oriented investors. The yield is only 0.85% at the moment, but the company has a compounded annual growth rate of 20.57% due to its dividend hikes over the past 10 years. The company lived up to its expectations as a dividend growth stock by raising its quarterly payout from $1.15 per share to $1.35 per share. That’s a 17.4% year-over-year increase. 

The company offers various services and materials for businesses that gravitate toward safety and basic procedures. It’s a boring company that isn’t investing in the latest artificial intelligence chip or capturing all of the headlines. That’s not necessary a bad thing, and its long-term returns should give investors more confidence in its potential.

Cintas stock is up by 48% over the past year and has gained 216% over the past five years. The stock currently trades at a 46 P/E ratio and continues to grow its profit margins. The firm reported 9.3% year-over-year revenue growth and 15.5% year-over-year net income growth in the second quarter of fiscal 2024.

On the date of publication, Marc Guberti did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.