There’s no doubt that quality growth stocks have been pretty reliable long-term stocks. But times are changing and that’s why it’s always smart to have some rock-solid dividend stocks in your portfolio.
Just as reminder of what life is like at the top of markets, in the late 1990s brokers were telling their retiring and retired clients that “growth was the new income.” They encouraged their long-term, income-dependent 70 year-old clients to dump their boring, reliable dividend stocks and buy optical networking companies and dotcoms with no earnings.
In more than a decade of unparalleled market growth due to low interest rates and steady, slow growth, growth is the apparent king again. Until it isn’t. Like every other boom and bust cycle.
That’s why it’s a good idea to have some investor-friendly dividend stocks that will help you grow your portfolio by simple, consistent compounding.
- Conagra (NYSE:CAG)
- Extra Space Storage (NYSE:EXR)
- CMS Energy (NYSE:CMS)
- Hormel (NYSE:HRL)
- Interpublic Group (NYSE:IPG)
- Regions Financial (NYSE:RF)
- Fidelity National Financial (NYSE:FNF)
Dividend Stocks: Conagra (CAG)
Duncan Hines, Wish-Bone, Bertolli, Reddi-Wip and even Boomchickapop and Udi’s. These brands and dozens more make up CAG’s various food products.
It has been in this market doing essentially the same thing for more than a century now. And it continues to be a leading foodstuffs retailer, pivoting from the older brands to more current, popular brands.
It also offers food services to commercial, institutional, and restaurant sectors. CAG is one of the leading packaged food retailers in the U.S. and has the strength and durability that are hallmarks of quality dividend stocks.
Currently, the stock has lost 12% year-to-date. But it trades at a current price-to-earnings ratio just below 13x and has a 4% dividend. Earnings should rise in coming quarters, which will help boost earnings and power the stock higher. In the meantime, the dividend takes some of the sting out of its performance.
This stock has an ‘A’ rating in my Dividend Grader.
Extra Space Storage (EXR)
Storage facilities have been in strong demand for a while now. Much of this has to do with the movement that has occurred going back to 2008. People were downsizing or pulling up stakes and moving for new opportunities.
Recently, corporations are moving from high tax states to lower tax states and employees are along for the ride. Also, the pandemic has encouraged younger generations to put their stuff in storage and work from the road. Retiring baby boomers are moving. Others are downsizing now that they’re empty nesters.
EXR is one of the top three storage companies in the U.S. And it also has a reinsurance arm that allows EXR to insure its storage facilities, which helps boost cash flow.
The stock is up 81% YTD and it still has a 2.5% dividend.
This stock has an ‘A’ rating in my Dividend Grader.
Dividend Stocks: CMS Energy (CMS)
It used to be that utilities were the go-to dividend stocks for most long-term investors. But this was the old days when investors socked money away slowly over time and allowed compounding to build their nest egg. Utilities — by and large — were about as reliable as, well, your electricity.
Those days have passed, but good utilities are still a good choice for income. They are reliable and stable, if not sexy.
CMS has operations in Michigan, serving almost 70% of the state’s 10 million residents in one capacity or another. That’s a solid revenue stream and the electrification of our lives in the Digital Era is a boon for CMS. And given the electric vehicle companies setting up shop in Michigan, the good news keeps on rolling in.
CMS stock is currently treading water YTD. But it’s reasonably priced and has a steady 2.8% dividend to keep investors interested.
This stock has an ‘A’ rating in my Dividend Grader.
Hormel (HRL)
Thanksgiving is almost here and if you have a Jennie-O turkey ready for the table, you’re an HRL customer. What’s more, turkey is now a much bigger meat than a couple days over the holiday season.
Today, turkey is the new pork. And speaking of pork, HRL has that covered as well, and has for the past 130 years.
None of these dividend stocks are going to raise your blood pressure too much, but that’s entirely the point. You can buy DeFi stablecoin meme stocks for that. Good quality dividend stocks are sedatives for your portfolio. You buy them for your peace of mind and wealth accumulation over time.
And for over a century, HRL has been delivering just that. The stock has lost 7% YTD, but this is the time of year when it shines. Also, rising food costs will help with margins. It has a Rock of Gibraltar dividend of 2.3%.
This stock has an ‘A’ rating in my Dividend Grader.
Dividend Stocks: Interpublic Group (IPG)
In 1930, IPG came out of the gates as the largest ad agency in the business. Today it remains in the top four in the world. That means it has stayed a dominant force in a wildly dynamic industry for the past nine decades. That’s pretty impressive.
Today the company manages everyone from sports stars and teams to major oil companies. It also does a lot of media buying and selling and events. Given the explosion of the internet and social media, IPG is in the midst of rebirth 90 years after its first launch.
IPG stock has risen 48% YTD, yet it still trades at a current P/E of 19x. It also has a steady 3.1% dividend to add to its growth returns.
This stock has an ‘A’ rating in my Dividend Grader.
Regions Financial (RF)
In today’s low interest rate market, it makes a lot more sense to buy a solid bank stock with a good dividend than it does to buy a CD, right? Well, if you’re looking for that bank stock, look no further than RF.
This Alabama-based bank operates more than 1,400 branches in 15 southern and midwestern states. And as interest rates rise, that means better loan margins for banks as well as more money from their Treasuries.
RF is one of the top regional banks in the nation and is located in some of the fastest growing states in the nation. Plus, it’s run like a solid, traditional bank with an eye for the future.
RF stock is up 50% YTD, has a nearly 3% dividend and a single-digit P/E. That’s a lot of value.
This stock has an ‘A’ rating in my Dividend Grader.
Dividend Stocks: Fidelity National Financial (FNF)
There’s a lot more to buying a house than getting a mortgage. If you’ve ever bought a house or refinanced, you know the piles of paperwork that go along with it. That’s because there are titles, deeds, escrow, conveyances, reconveyances, etc.
Well, FNF is one of the nation’s companies that manages all that stuff that goes into that pile of papers. That means a strong real estate market is good for FNF. And this market isn’t slowing down.
While rates may go up, so are wages. That means real inflation doesn’t really affect the market as much as you may think. Plus, there remains a housing shortage, so just filling the backlog will take years. It also has an annuities and life insurance business for diversification of its capital.
FNF stock has gained 36% YTD, yet it trades at a P/E just above 5x, and has a 3.5% dividend.
This stock has an ‘A’ rating in my Dividend Grader.
On the date of publication, Louis Navellier held positions in CAG and EXR. 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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