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%).
Most analysts and investors are quite bearish on the market at the moment despite the fact that the trade war is looking less worrying. That said, there is still a lot of indecision over where the market is headed. With that in mind, Barron’s is arguing that buying beat up but high-quality dividend stocks is a safe bet no matter which way the market heads. Here are five stocks to look at: UnitedHealth, food products company Ingredion, drug company Eli Lilly, Kohl’s, and Ralph Lauren.
FINSUM: There are a lot of different types of names here. We are most interested in Ralph Lauren, which is trading at a 25% discount to its historical valuation. The company is very healthy—easily covering its 3% dividend with earnings—and it it not facing the same headwinds as other retailers because it is mostly a wholesale business, meaning it is agnostic to the shift to online selling.