Here we highlight three stocks that offer a steady dividend and some peace of mind as the economic recovery unfolds. They aren’t likely to make you rich anytime soon, but they will make for some more restful nights ahead
Is Coca-Cola Still a Buy-and-Hold Stock?
If Coca-Cola (NYSE:KO) is a refreshing investment for value legend Warren Buffet, it should be good enough for the rest of us. Regardless of the economic backdrop, there will always be consumer demand for sodas, juices, teas, and other beverages.
With this said, restrictions on large gatherings during the pandemic have impacted Coke’s recent financial performances and brought more volatility than usual to the stock. However, with the worst likely over, the company appears to be on the path back to more normalized sales patterns. As family picnics and outdoor concerts gradually return along with restaurant traffic, Coke should start to see higher volumes based on group size rather than stockpiling.
Despite recording 11% lower revenue in 2020, Coke kept its dividend hike streak going serving up a $1.64 payout to loyal shareholders. The 2.4% dividend increase made it 59 straight years of higher dividends.
In the near-term Coke is a conservative way to play the economic reopening theme. Its beverage portfolio is more in tune with health and wellness trends with brands like Vitaminwater, PowerAde, and Minute Maid. As activities like youth sports and amusement park attendance normalize, Coke’s performance should improve.
Longer-term Coke’s rising dividend and defensive nature make it the classic buy and hold stock. So, investors can simply opt to have what Warren’s drinking.
What is a Good Non-Cyclical Dividend Stock?
Speaking of defensive stocks, Unilever (NYSE:UL) is about as non-cyclical as its gets. The U.K.-based consumer products giant is the company behind many of our favorite personal care and food items. Dove soap, Axe body spray, Q-tips, and Vaseline are all Unilever brands. So too are popular indulgences like Ben & Jerry’s ice cream, Lipton iced teas (and soups), Hellmann’s mayonnaise, and even the beloved Popsicle brand.
Although the elevated demand for Unilever’s food products has waned in recent quarters, it’s pretty much a sure bet that people will still be scooping up their go-to items as shopping patterns normalize. And as usual, this should lead to some solid profits for Unilever and sizeable dividends for shareholders.
Unilever has one of the strongest balance sheets in its peer group that supports an ability to pursue growth opportunities such as product expansion and establishing a greater presence in developing markets. The ADR currently has a 3.4% trailing dividend yield which about twice the average dividend yield of the consumer staples sector. This is an easy stock to throw in the cart as a core long-term holding.
Is it a Good Time to Buy 3M Stock?
3M (NYSE:MMM) has been one of the least volatile U.S. large cap stocks over the last ten years. Although it’s not a consumer defensive company, it’s highly diversified end markets generate some reliable financial results. With broad exposure to the automotive, aerospace, transportation, electronics, and health care industries as well as the consumer space, a downturn in one segment can be easily offset by strength in another.
The company has had some choppy performances in recent quarters. Some of it has related to the pandemic and some has not. Demand for home improvement, cleaning, food safety, and personal safety products has been strong. On the other hand, COVID-19 restrictions have forced the automotive, industrial, office supplies, and oral care businesses to re-evaluate how to adjust to the post pandemic economy.
Fresh off a corporate restructuring, though, 3M looks to be in a good position to capitalize on improving conditions in its key markets and achieve its earnings growth goal. Management is aiming to reduce annual operating expenses by at least $250 million. Based on the initial progress, this looks feasible and should drive higher margins and steady single digit growth over the long-term.
3M consistently rakes in some $30 billion in revenue each year and even in slow or no growth years it rewards shareholders with a higher dividend. In fact, 3M has gone toe to toe with Coca-Cola in raising its annual dividend in each of the last 59 years. The Dow Jones index mainstay has a 3.1% dividend yield and at 23x earnings is trading at the lower end of its historical valuation range. It deserves to be a mainstay in any long-term investment portfolio.
In this video, I’m going over 5 top dividend stocks to buy now that pay up to 8.5% dividend yield! I am a big fan of dividend investing for passive income – some of these stocks are a litter riskier, and some are definitely on the safer side.
Dividend stocks are companies that pay out a portion of their earnings to a class of shareholders on a regular basis. These companies usually are well established, with stable earnings and a long track record of distributing some of those earnings back to shareholders. These distributions are known as dividends, and may be paid out in the form of cash or as additional stock. Most dividends are paid out on a quarterly basis, but some are paid out monthly, annually, or even once in the form of a special dividend.
While dividend stocks are known for the regularity of their dividend payments, in difficult economic times even those dividends may be cut in order to preserve cash. One useful measure for investors to gauge the sustainability of a company’s dividend payments is the dividend payout ratio. The ratio is a measure of total dividends divided by net income, which tells investors how much of the company’s net income is being returned to shareholders in the form of dividends versus how much the company is retaining to invest in further growth.
If the ratio exceeds 100% or is negative (meaning net income is negative), this indicates the company may be borrowing to pay dividends. In these two cases, the dividends are at a relatively greater risk of being cut.
Below, we look at the top 5 dividend stocks in the Russell 1000 by forward dividend yield, excluding companies with payout ratios that are either negative or in excess of 100%. Each of the dividend stocks listed below significantly underperformed the Russell 1000’s total return over the past 12 months of 19.7%, as of December 21, 2020.1 All data below is as of December 22, 2020.
Lumen Technologies, formerly known as CenturyLink, is an integrated communications company that offers services including local and long-distance voice, broadband, Ethernet, colocation, hosting, data integration, video, network, information technology, and more.
Brookfield Property is a real estate investment trust (REIT) that owns, develops, builds, manages, and leases various commercial properties. Among the company’s portfolio of properties are restaurants, malls, entertainment facilities, and parking areas. On November 6, the board of directors declared a quarterly dividend of $0.3325 per share on its Class A Stock payable on December 31, 2020, and a quarterly dividend on the 6.375% Series A Cumulative Redeemable Preferred Stock of $0.39844 per share payable on January 1, 2021.2
New York Community Bancorp is a holding company with multiple banking subsidiaries, including Queens County Savings Bank, Roosevelt Savings Bank, Atlantic Bank, and others. Through these subsidiaries, New York Community Bancorp offers a full range of banking products and services to businesses and consumers. The company primarily serves customers in the New York City metropolitan area.
Brandywine Realty Trust is a REIT that owns, manages, leases, acquires, and develops urban, downtown, and suburban office properties primarily on the East Coast and in Texas. Its services include asset management, development and construction, investment, marketing and leasing, and property management. On December 8, the board declared a quarterly cash dividend of $0.19 per common share and OP Unit payable on January 20, 2021. The quarterly dividend is equivalent to an annual rate of $0.76 per share.3
TFS Financial is a holding company engaged in retail consumer banking, mortgage lending, and similar services through its subsidiaries. The company’s businesses include originating and servicing residential real estate mortgage loans and attracting retail deposits. Its main business is retail consumer banking.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors.
Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
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Top 10 Dividend Stocks – January 2021! In this video I show the top 10 stocks in January of 2021 that the thousands of dividend investors on my discord server (https://discord.gg/kkSr5FY) had the opportunity to vote for that they were buying or planning to buy. Then I’ll end this video with a powerful life story that is worth hearing and reflecting on, so I recommend you watch this entire video. Referral Link to M1 ➜ https://m1.finance/AUzJllYh-gGh To get access to my Spreadsheet 2.0 then please sign up as a Patreon Aristocrat or King (and double check my Patreon site to ensure I’m still offering access, as I only have limited seats available). You also get other perks for signing up including the ability to watch my videos on my Discord before I release them to the public, and the ability to vote on what thumbnail I’ll use in some of my future videos, and you gain direct access to me.
Cryptocurrency-friendly e-commerce giant Overstock (NASDAQ: OSTK) has seen the price of its shares surge so far this year, as traders who bet on OSTK are now up over 160%.
The beginning of the year wasn’t great for Overstock shareholders, as the firm started the year trading at $7.04 but faced the continuation of a downturn that saw it drop to a $2.67 low in mid-March, when COVID-19 was declared a pandemic by the World Health Organization and all major U.S. stock market indices entered a bear market.
Since then, however, OSTK has been steadily rising, now trading at $18.9. Those who bought the company’s shares at the beginning of the year are now up nearly 170%, while those who bought it at its low are up a whopping 600%.
The e-commerce giant saw its share price surge after the company revealed sales had skyrocketed during the COVID-19 pandemic, as customers started using e-commerce platforms more and more. Per CEO Jonathan Johnson, quarter-to-date retail sales went up 130% year-over-year, and the company shifted to a model where all of its employees are working from home.
Overstock has also seen new retail customer growth of 85% year-to-date. Overall, the company’s new customers are up 260% quarter to date. The category that’s best performing on its website is the home furnishing products one, with online penetration of 42%.
According to Overstock, as its sales went up the overall retail industry suffered a decline of roughly 30% over shelter-in-place orders. Looking forward, the e-commerce giant is looking to improve its mobile site, reduce logistics costs, and improve inventory management for faster delivery.