Make hay while the sun shines. This old saying was certainly in full effect for the past decade when it came to the markets. But today, market forces we haven’t seen for a decade are making dividend stocks much more attractive again.
Imagine we were living in a lovely estuary, growing fat on growth stocks in a lovely, placid environment. It wasn’t always safe, but the risks were relatively low.
Then, we’re swept out to sea — the big, open, overwhelming sea. That’s how a lot of investors are feeling right now. And many of these investors have been socking away profits in their retirement portfolios fantasizing about early retirement.
I remember just before the dotcom bubble burst, brokers — remember them! — were telling their conservative, long-term investors that growth was the new income. Why hold a stock with a dividend of 2% when you could have a growth stock making 20% plus every year?
These top-quality dividend stocks will keep the growth chugging along and deliver rock-solid dividends as well. It might not seem sexy, but it is reliable. And that’s actually kind of sexy.
- AbbVie (NYSE:ABBV)
- American Tower REIT (NYSE:AMT)
- Comcast Corp (NASDAQ:CMCSA)
- Caterpillar (NYSE:CAT)
- Morgan Stanley (NYSE:MS)
- Amgen (NASDAQ:AMGN)
- Blackstone (NYSE:BX)
Dividend Stocks: AbbVie (ABBV)
With a $264 billion market cap, ABBV is well and truly a major pharmaceutical company. Its Humira is one of the top selling drugs of all time — it booked nearly $20 billion in revenue in 2020 and continues to find new uses that help sales continue to soar.
However, its main patent expires next year. But don’t fear, as the company has plenty of blockbuster drugs that are already helping revenues. AbbVie also has one of the most impressive pipelines in the business. What’s more, it has a very generous dividend that’s one of the most reliable out there. And its generous payout isn’t because ABBV stock has been languishing.
As a matter of fact, ABBV has been a strong performer, yet it remains a solid value. ABBV stock has gained 38% in the past 12 months, and 28% in the past three months. But it trades at a price-to-earnings ratio of around 23x and delivers an impressive 3.8% dividend.
This stock has a Dividend Grader rating of “A.”
American Tower REIT (AMT)
We hear a lot from the major wireless providers about their fantastic 5G telecom networks. But what they conveniently leave out is the fact that while 5G is available, it isn’t the super-duper version that we hear about.
Some big cities have pieces of it. Some big stadiums have the real deal. But it’s expensive to wire the whole country because it’s an entirely different beast than 4G LTE or any of the other predecessors. Only now are the telecoms backfilling with the high-end 5G.
And it will be a gamechanger. AMT is one of the leading telecom real estate investment trusts (REITs) that leases telecom towers to various telecom providers. This is going to be even more important during the 5G rollout. Plus, it’s well placed internationally and the conversion to 5G will play out over much of this decade.
As a REIT, it has a dividend-focused business that now passes along a 2.2% dividend. The stock has held onto a 16% return for the past 12 months, but has been hit recently like most of the broad market.
This stock has a Dividend Grader “A” rating.
Dividend Stocks: Comcast Corp (CMCSA)
This has long been one of the most hated companies in the U.S. But part of that was the fact that it runs businesses providing internet, telecom and media services to millions of people.
Granted, its customer service has been a sticking point, as well as its pricing. But those issues are being addressed by stronger competition and streaming services. The less you rely on a company, the less stressed you are about it.
But that’s not to say CMCSA is not doing well. It continues to dominate major markets across the U.S. And it has a thriving content business as well. Its internet service has been rebranded Xfinity and that has helped too. Streaming is becoming very similar to the old cable model, yet few consumers are catching on to this fact. All the better for CMCSA, which remains a leading cable provider.
And with the new infrastructure bill, swapping its cable for fiber optics will be subsidized by the government. That’s a big win for shareholders.
CMCSA stock has been hit in the recent selloff, so it’s basically on sale. It trades at a P/E around 15x and has a strong 2.3% dividend.
This stock has a Dividend Grader “A” rating.
Caterpillar (CAT)
Sitting closer to its 52-week lows than its highs, CAT was starting to make a big move after the passage of the first infrastructure bill. But it now has been hit by larger macro issues affecting the global economy.
But that’s good news. It means the stock is currently in limbo, and on sale. Fortunately, in the U.S., rising inflation is a consequence of rising growth. And that growth means more CAT equipment to build roads and housing developments, maintain farms and handle mining operations.
Europe also has a massive infrastructure stimulus plan underway and likely more spending due to the Russia-Ukraine conflict. CAT is even working with NASA on equipment for moon bases and beyond!
CAT stock has been treading water for the past three months. But its low P/E of 16x and solid 2.3% make it a good time put some of this CAT in your bag.
This stock has a Dividend Grader “A” rating.
Dividend Stocks: Morgan Stanley (MS)
There tends to be a misconception that in bad markets financial services companies do poorly. But firms like MS are as prepared for down markets as soldiers are prepared for war.
Trading desks around the world are filled with professionals whose entire jobs are to make money regardless of market conditions. In down markets, go risk off and start shorting across stocks, options and futures. Buy a dip here and there and then dump it after a short technical pop. Work dark pools and bond markets.
The fact is, after more than a decade of pretty straightforward trading and easy-peasy index investing, now it’s time for trading houses to earn their money. And MS is an institution that has been around since 1924.
It’s also one of The Street’s top dividend stocks. And its fundamental reliability is a great asset for long-term investors.
MS stock is up around 8% in the past 12 months, but has lost nearly 12% in the past three months. Trading at a P/E of 10x, and offering a generous 3.2%, it’s a bargain right now.
This stock has a Dividend Grader “A” rating.
Amgen (AMGN)
AMGN is one of the world’s leading biotechs and one of the sector’s top dividend stocks. It offers a very generous — and safe — 3.3% dividend at this point. And it has a very solid path to growth.
It doesn’t have a super blockbuster drug like ABBV, but it has a slew of popular medicines that are used around the world. It makes top chemotherapy drugs as well as others for high cholesterol and many other ailments.
The fact is, having a spectrum of drugs that have substantial practical use inside and outside of medical facilities makes many of products reliable workhorses more than show ponies.
AMGN stock price remains in the green during the past 12 months and has gained 15% in the past three months. And it trades at a P/E of 22x.
This stock has a Dividend Grader “A” rating.
Dividend Stocks: Blackstone (BX)
BX operates as a private equity and financial services company. It has a number private equity funds it manages as well as alternative investment operations and hedge funds.
Holding BX is like getting a piece of the kind of companies and opportunities institutional investors get access to. It will buy into individual companies in a similar industry, usually setting up a fund of big investors. Sometimes it will take board seats or offer funding for projects, with the expectation that it will cash out once the companies grow.
Basically, BX takes on the risks and reaps the rewards. But along the way, investors get a solid yield — at this point around 2.3% — and get a growth kicker. The growth can be volatile. For example, the stock has gained 65% in the 12 months, but it’s down 16% in the past three months. The recovery will see the stock rise again. It’s on sale now.
This stock has a Dividend Grader “A” rating.
On the date of publication, Louis Navellier has positions in ABBV, AMT, CMCSA, and AMGN in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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