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Calling all income investors to witness the magic of dividends—a powerful force in minimizing portfolio risk and volatility. These payouts not only offset stock losses but also bring a satisfying reward for having a stake in a company.

Amid the Federal Reserve’s persistent battle against inflation, any hopes for a “Fed pivot” remain distant. High-interest rates may prolong the bull market’s absence. Exploring overlooked dividend stocks presents an opportunity for market-beating returns through steady dividends and potential catalysts, given their low valuations. Let’s explore three that you don’t want to miss this quarter.

Exxon Mobil (XOM)

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Once an energy giant often overlooked by Wall Street, Exxon Mobil (NYSE:XOM) faces the changing tides towards green energy. However, contrarians may find value in considering XOM, as the world’s infrastructure remains fossil-fuel-dominated, and hydrocarbon products like gasoline maintain high energy density.

Exxon Mobil yielded passive income with a 3.80% forward dividend. With 25 consecutive years of dividend growth, Exxon’s Q3 refinery throughput hit a record due to the Beaumont expansion, showcasing operational efficiency. Adding 250K barrels daily, the expansion addresses market demands. The Baytown chemical expansion which adds 750K tons yearly marks strategic entry and diversification.

XOM is considered a comeback stock with a consensus moderate buy rating from analysts, projecting a robust recovery with a $129 average price target. While the shift to cleaner emissions challenges Exxon, uncertainties surround the pace of EV adoption. Despite this, hydrocarbons’ high energy density and conveniences position XOM for a potential comeback.

Enbridge (ENB)

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Toronto-based energy company, Enbridge (NYSE:ENB), is increasingly focusing on renewables. With a robust 28-year dividend track record, it’s shifting from oil to diverse revenue sources, including clean energy. 

Despite discussions of electric vehicles, the world’s reliance on oil persists. A crucial economic player, Enbridge highlights the endurance of oil-related industries. With a credible case for high-yield dividend stocks, ENB boasts a 7.5% forward yield. However, caution is warranted due to its high payout ratio of 130.52%.

Strong financials, evident in a recent cash flow increase from $2.1 billion to $3.1 billion year over year (YOY), demonstrate its ability to reward shareholders. To further its clean energy presence, the company plans to acquire three natural gas utilities in 2024. Priced at $34, it’s a compelling choice for passive income investors.

Realty Income (O)

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In 2023, Realty Income (NYSE:O) faced a 9.69% price drop, trading at 1.32 times book value. This decline, though, offers an opportunity for income investors seeking long-term growth in retirement portfolios. 

However, its upcoming purchase of Spirit Realty Capital (NYSE:SRC) in early 2024 introduces risks of overvaluation and dilution, somewhat shadowing its immediate positive outlook.

Realty Income stands out among triple net REITs for its unique operational approach, transferring certain costs to tenants, reducing overall risks, and enhancing stability. With 25 consecutive years of dividend growth, its 5.3% yield, while attractive, remains moderate compared to peers. The strategic divestment of its office space portfolio in anticipation of market shifts adds to the company’s foresight.

Despite challenges, 2024 holds promise, and potential lower lending costs could drive the firm’s upward trajectory.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.