1 week ago
8
John Ballard, The Motley Fool
Sun, May 10, 2026 astatine 1:45 PM CDT 5 min read
There's thing rather similar seeing currency automatically deposited into your accounts. Some companies clasp specified beardown positions successful their industries that they tin stock a information of their profits with shareholders done regular dividend payments.
Right now, income investors tin find immoderate compelling opportunities successful the user discretionary and user staples spaces. Home Depot (NYSE: HD), Pepsico (NASDAQ: PEP), and Starbucks (NASDAQ: SBUX) are each sporting above-average yields now, and each looks similar an fantabulous bargain for May.
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Home Depot
Home Depot has proven to beryllium a resilient concern successful a suboptimal operating environment. Despite higher involvement rates than radical person go accustomed to and a still-weak lodging market, its comparable income accrued by 0.3% successful 2025. It besides paid its 156th consecutive quarterly dividend successful March.
On an yearly basis, the dividend totals $9.32 per share, bringing its guardant output to 2.9% -- adjacent to 3 times the mean output of the S&P 500. Home Depot supports its dividend with much than capable profits, paying retired 64% of trailing net and 72% of escaped currency travel implicit the past year.
The 4th fourth of 2025 was Home Depot's 5th consecutive 4th of same-store income growth. As the lodging marketplace recovers, absorption is investing to grow its nonrecreational lawsuit business, which it estimates astatine a $700 cardinal marketplace opportunity.
The company's caller acquisitions of SRS Distribution, GMS, and Mingledorff's expanded its addressable marketplace by $100 billion. It's besides expanding its income force, extending commercialized credit, and improving its bid absorption systems to boost its pro lawsuit segment.
Management believes these investments volition thrust aboriginal net growth. That means much dividend maturation connected an already charismatic yield, and imaginable stock terms gains.
PepsiCo
PepsiCo has been different resilient marque amid higher ostentation and macroeconomic headwinds. It conscionable posted a coagulated first-quarter net study and precocious accrued its dividend for the 54th consecutive year.
The annualized dividend is presently $5.69, bringing its guardant output to 3.7%. PepsiCo paid retired 89% of net and 87% of escaped currency travel implicit the past year. Typically, income-focused investors privation to spot little payout ratios due to the fact that they bespeak that a institution has much flexibility for sustainable dividend growth, but these ratios should diminution arsenic PepsiCo's net grow.
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