The stock market sell-off is providing investors with the opportunity to buy high-quality dividend stocks at higher yields. This positions them to generate more income and boost their total return potential over time. ExxonMobil, PepsiCo, and Prologis currently offer dividend yields of around 4%, making them attractive options for income-focused investors.
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Drop your favourite pick in the comments — what did you buy or sell? 💬#MutualFunds #StockMarket #MarchMoves… pic.twitter.com/7RjzgiH87B
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ExxonMobil’s shares have tumbled more than 15% from their high point earlier this year.
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This has driven the oil giant’s dividend yield to around 4%, substantially higher than the S&P 500’s average yield of about 1.4%. ExxonMobil increased its dividend payment by 4% earlier this year, extending its annual dividend growth streak to 42 straight years.
The company is well-positioned to continue growing its dividend, thanks to its robust free cash flow of $34.4 billion. This comfortably covers its $16.7 billion dividend outlay. ExxonMobil’s balance sheet is strong, with an ultra-low leverage ratio of 6% and $23.2 billion in cash.
Per this Bloomberg chart, the US bond yield rollercoaster continued today with an 11 basis drop in the 10-year. This was accompanied by 0.6-1.1% gains in the major US stock market indices.
The appreciated return of relative market calm hides a division of views on yields —… pic.twitter.com/3myX8aAeJs— Mohamed A. El-Erian (@elerianm) April 14, 2025
Hedge Funds dumped European Stocks last week at the fastest pace in history 🚨🚨 pic.twitter.com/IPl1D32gn4
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The company plans to increase its annual cash flows by $30 billion by 2030 through cost-saving measures and strategic investments in high-margin production. PepsiCo’s stock is down nearly 10% from its peak earlier this year. This has pushed the beverage and snacking giant’s dividend yield to 3.8%.
High-quality dividend opportunities
The company announced a 5% dividend increase starting in June, bringing its forward dividend yield to around 4%. This latest increase will extend PepsiCo’s dividend growth streak to 53 consecutive years, maintaining its status as a Dividend King.
PepsiCo generates substantial cash, with $12.5 billion in net cash from operating activities last year. This is more than enough to cover its $7.6 billion in dividend payments. PepsiCo’s cash-rich balance sheet also supports its dividend growth, with nearly $9.3 billion in cash and short-term investments.
The company utilizes its excess free cash flow to invest in its business and make acquisitions. This is exemplified by its recent $1.7 billion purchase of Poppi. Prologis, a leading real estate investment trust (REIT), has seen its stock lose nearly a quarter of its value this year.
This has pushed its dividend yield to around 4.3%. Prologis has a solid track record of growing its dividend, having increased its payout for 12 straight years at a 13% compound annual rate over the past five years. Prologis is well-positioned to continue raising its dividend, supported by one of the strongest balance sheets in the sector.
The company benefits from strong demand for logistics real estate driven by the growing adoption of e-commerce. It is also developing data centers on some of its vast land holdings to provide an additional growth catalyst.
