3 Dividend Stocks That Have Exceeded Their Own Success

When it comes to investing in the stock market, many people seek out companies that not only have the potential for growth but also offer a steady stream of passive income through dividends. However, the landscape of dividend-paying stocks is changing, with some of the largest and most successful companies yielding less than the S&P 500.

Companies like Walmart, Waste Management (WM), and Sherwin-Williams have long been considered solid dividend plays for investors. They consistently buy back shares and raise their dividends, but their yields are now lower than the broader market. This shift has led some investors to question whether these once reliable dividend stocks are still a good source of income.

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Walmart, in particular, is in growth mode, with its stock near an all-time high. The company recently raised its dividend by 9%, marking the largest raise in over a decade. However, despite its success, Walmart’s yield is just 1.3%, well below the S&P 500. This is partly due to the company’s focus on reinvesting in its stores and improving its underlying business.

On the other hand, Waste Management has been investing heavily in sustainability initiatives, including recycling projects and renewable natural gas (RNG) production. While these investments have driven profits to near all-time highs, the company’s yield remains low due to its strong stock performance and focus on long-term growth.

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Sherwin-Williams, known for its paint stores, has seen impressive revenue growth over the last decade. The company has significantly raised its dividend, but its yield has fallen as its stock has outpaced this growth. Sherwin-Williams’ success in various business segments, including consumer brands and performance coatings, has made it a top performer in the market.

While these companies have been successful in generating growth and returns for investors, they may no longer be the best options for passive income plays. As their focus shifts more towards growth and capital returns through dividends and share buybacks, investors need to adjust their expectations accordingly.

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In conclusion, while Walmart, WM, and Sherwin-Williams remain strong investments, they may not be the best choices for passive income seekers. As the market landscape changes, investors should reevaluate their investment strategies and consider other options for generating income.

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