Sarah Travers
As we embark on a new year, investors are eagerly exploring opportunities that hold the promise of significant returns in 2024. If you’re on the lookout for dividend stocks with growth potential, three standout options have emerged: UPS, Johnson Controls, and Whirlpool. With an average dividend yield of 4.1%, these value-driven equities offer compelling reasons to include them in your investment portfolio.
UPS – Strategically Navigating Challenges
In 2023, the logistics giant UPS faced formidable challenges stemming from lower delivery volumes that fell short of expectations. A sluggish economy and prolonged labor negotiations prompted some customers to divert their shipments to alternative networks, causing UPS to miss its earnings targets. However, a brighter future appears to be on the horizon for this industry leader.
UPS is actively positioning itself for a resurgence in 2024. Company management is keen on expanding into the small and medium-sized business and healthcare sectors, focusing on profitability rather than sheer volume growth. Furthermore, UPS is regaining lost delivery volumes due to labor disputes. Anticipated lower interest rates in 2024 could stimulate the economy, potentially boosting delivery volumes. Additionally, UPS remains committed to investments in smart facilities and automation to trim operational costs.
While a complete recovery for UPS might take some time, it’s currently trading at an attractive 16 times trailing earnings, offering investors a 4.1% yield as they patiently await improved earnings in the latter half of 2024.
Johnson Controls – Surmounting Growth Challenges
Johnson Controls, a company specializing in building efficiency solutions, faced a setback when it fell short of its earnings guidance in 2022 and experienced slower-than-expected growth in 2023. However, it’s crucial to consider the bigger picture.
Despite recent hiccups, Johnson Controls stands before a substantial market opportunity estimated at $250 billion over the next decade. The company’s heating, ventilation, air conditioning, and building control solutions are well-aligned with the global push for reduced emissions and efficient building operations.
Currently trading at less than 16 times Wall Street’s estimated forward earnings and offering a respectable yield of 2.6%, Johnson Controls deserves attention from investors willing to grant management the benefit of the doubt, given its potential to capitalize on the expansive market opportunity.
Whirlpool – Charting a Course through Turbulent Waters
Home appliances giant Whirlpool grappled with trading challenges in 2023, primarily driven by underwhelming performance in Europe and Asia, compounded by interest rates pressuring its core North American market. The company even revised its full-year earnings per share guidance downward.
However, there’s optimism that 2024 could herald a change in fortune. If interest rates decline, the headwinds currently buffeting Whirlpool may morph into favorable tailwinds. Moreover, company management is actively pursuing cost-cutting measures and strategic partnerships, positioning the firm for a potential turnaround.
With an attractive 5.8% dividend yield, Whirlpool presents an enticing option for enterprising investors willing to weather the storm and potentially reap rewards as the turnaround strategy unfolds.
Assessing Investment Opportunities in 2024
In the year 2024, investors seeking a blend of dividends and growth prospects have a trio of enticing options in UPS, Johnson Controls, and Whirlpool.
While each of these stocks has encountered its unique challenges, they all offer compelling reasons to consider them as integral components of your investment strategy. UPS is striving to regain its footing, Johnson Controls has its sights on a substantial market opportunity, and Whirlpool is navigating turbulent waters with a well-thought-out turnaround plan.
As always, it remains paramount for investors to conduct comprehensive research and evaluate their individual financial goals and risk tolerance before making investment decisions in the upcoming year.
