Displaying items by tag: dividends

(New York)

Are you or your clients looking for income? Most seem to be. Income investments seem poised to do well over the next decade as more and more Baby Boomers retire and need income. Well, here are some of the best dividend stocks to take a look at. Unsurprisingly, they come from the group known as the dividend aristocrats, which are a group of companies that have raised dividends every year for twenty-five years. Here are some of the highest yielding names of the group: AT&T, Chevron, Target, Coca-Cola, Exxon-Mobil, and PepsiCo, among others.

FINSUM: So all these stocks are yielding well over 3%. However, the issue with them is that they have not performed very well over the last year.

(New York)

A lot of investors are worried about the stock market. The market has been essentially flat this year, but given fears over a looming trade war, a potential recession, and higher rates, there is much concern about the potential for falling prices. All that said, here is a factor that may boost markets, but doesn’t seem to be fully priced-in by the market: growing buybacks. Goldman Sachs forecasts that companies in the S&P 500 will buyback a record $650 bn worth of stocks this year, far outpacing the record set in 2007. This should lead to a buyback yield of about 3% for investors, which combined with the dividend yield should net investors about 5%.

FINSUM: A record setting year for buybacks would be a big boost for markets that are lacking a growth story at the moment.

(New York)

If you are looking for great stock yields from reputable names, look no further than preferreds. While the stocks are facing headwinds from rate rises, check this out: KKR, leading private equity firm, has been issuing preferred securities with 6.5% yields that have to pay out to holders before they do to common shareholders. This is not an isolated case, the average yield of investment grade preferred shares is 5.8%. This is contrasted to 4% for corporate bonds and 4.4% for municipals.

FINSUM: Preferreds are an old but niche asset class. They are safer than common stock, but less secure than bonds. Interesting to take a look at as they could fill a nice niche in many portfolios.

(New York)

Markets have been very turbulent lately with no clear path forward. With that in mind, and given the stage of life (retirement) of many clients, a lot of advisors may be looking for some good yields to add to portfolios. Well, it might be good to take a look at utilities stocks. While the focus on investors has been on growth, utilities look good at the moment. Despite the fact that utilities generally lose ground when rates rise, and have lost 2.4% this year, well-run regulated utilities still look like a good buy. In particular, look for utilities that do not have massive amounts of capital tied up in a single asset, like a power plant. This means one should focus on utilities in the electricity transmission and distribution areas.

FINSUM: Beyond the yields, utilities would also seem to be quite good at defending against a downturn, as spending on them would be quite resilient in a recession.

(New York)

While stocks have seen some gains the last couple of days, the reality is that it was a very poor quarter. However, as the second quarter begins, stocks may be about to get a big boost. That boost will come in the form of a $400 bn dividend hike which will be delivered in April and May. “We think it is no coincidence that spring is also a seasonally strong period for equities … April in particular tends to be a strong month for global equity returns”, says Morgan Stanley.

FINSUM: This could be the shot in the arm that stocks need right now.