Displaying items by tag: dividends
The stock market is a tough game right now. Valuations are sky high and earnings are trending the wrong way, which makes picking any stock difficult. Even buying popular high-priced stocks isn’t a good plan when earnings are falling, which makes it seem as though there are few good options. With that in mind, consider buying cash cows like Facebook, Google, and Ford. With such good earnings prowess and free cash flow, these kinds of companies have the money to keep buying back shares, which should drive their valuations over time.
FINSUM: Cash cows can feed their own market pricing even in really rich markets, so this seems like a smart call.
If you are looking for dividends in this low rate world, you still have some good options. What about dividend growth stocks? They can be a nice investment in a low rate market, but where to look? Healthcare and tech stocks look like a great place. Analysts think dividends in those sectors will rise 10% and 9% respectively, handily outperforming dividend-focused sectors like utilities and REITs. Healthcare looks particularly healthy. Check out Abbvie (5.3% yield), Gilead 3.9%), Pfizer (3.9%), and Eli Lilly (2.2%).
FINSUM: Profits in healthcare have been ballooning and executives seem to be quite focused on returning money to shareholders.
It should not be this easy to beat the Dow, but it is. In the last ten years, investors could have used a very simple strategy to outperform the index by a significant level. The strategy is called “Dogs of the Dow”, which is the method of buying the ten highest yielding stocks in the Dow. Over the last decade, the strategy outperformed the index in 7 years and overall outpaced the Dow by 1.7% per year, returning an average of 15% per year for a decade. It also outperformed the S&P 500 considerably.
FINSUM: Who sad value investing is dead? This is a classic strategy that has worked to great effect.
The best thing an investor can do right now is to ignore all the market predictions being released for 2020. Every research department has to put out a prediction, and most of them are not worth the paper they are written on. So what does one do? Invest in dividend stocks. It is an important but preciously little known fact that the lowly dividend has historically accounted for 45% of all stock market returns. They are also tangible and predictable in a way stock prices are not, giving them a crucial place in a portfolio.
FINSUM: An additional stimulus for dividend stocks is that the aging population is hungry for them since bond yields are so anemic. Check out AT&T at 5.3%.
Are you looking for a group of high-paying and stable income stocks? We’ve got a great list for you. All five in this group yield over 5% and all seem to have a stable outlook—which is not typical once dividends get to this level. Take a look at AT&T (5.3%), Schlumberger (6.1%,) AbbVie (5.4%), Simon Property Group (5.6%), and Iron Mountain (7.5%).
FINSUM: This is a highly diversified group of picks, which makes it quite interesting. AT&T seems like a good bet. Some runners-up include Macy’s (10% (!)) and Victoria’s Secret (7.1%).