3 Dividend Stocks for May 2024 [Video]

David Harrell: Hi. I’m David Harrell, editor of the Morningstar DividendInvestor newsletter. In this monthly series, we take a look at the dividend prospects of three stocks that are popular with income investors.

3 Dividend Stocks for May 2024

1. ExxonMobil XOM
2. McDonald’s MCD
3. Pfizer PFE

First up this month is ExxonMobil, the largest US energy company, which receives a narrow economic moat rating from Morningstar equity analysts. Full disclosure: This is a stock I own in my personal portfolio. At this point, Exxon’s recent dividend story is well known: The company relied on its balance sheet to avoid a dividend reduction in 2020, but its subsequent dividend growth has been modest, at 2.6% annualized over the past five years. But Exxon’s raise for its last payout of 2023 was a more substantial 4.4%. The stock currently trades at around a 12% discount to its fair value estimate and yields 3.2%, well below the 5.2% yield the stock has averaged over the …