Don’t Tread on Me – 3 Great All-American Dividend Stocks to Buy

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It’s not the Fourth of July or even the Olympics, but patriotism is still running high for the U.S. as the men’s national soccer team makes its World Cup debut against Ghana on Monday — and that got us thinking about great all-American stocks to buy.

Don’t Tread on Me - 3 Great All-American Stocks to Buy

All-American Stocks to Buy

Of course, finding stocks to buy among American companies isn’t as easy as it looks. Most of the biggest, oldest blue-chip stocks represent multinational companies, making it hard to say whether they’re really “all-American” stocks.

Indeed, the S&P 500 might be the benchmark index for U.S. stock performance, but roughly 45% of S&P 500 company revenue comes from overseas. Take Procter & Gamble (PG) for example. Founded in 1837 and a member of the Dow Jones Industrial Average, P&G sports deep American roots and at first glance would be a candidate for all-American stocks to buy. But about 60% of P&G’s revenue comes from overseas. That’s not exactly a pure bet on the U.S. of A.

The easiest way to find all-American stocks to buy is to focus on sectors in which most of the revenue is generated domestically, such as telecommunications and utilities. (That these sectors happen to be big, fat dividend payers only sweetens the deal.)

So with that as our focus — and wishing the best of luck to the U.S. in the World Cup — here are three great all-American stocks that also happen to be great stocks to buy:

All-American Dividend Stocks to Buy – AT&T (T)

AT&T stock stocks to buyIt’s tough to find a more American company than AT&T (T). After all, the Dow stock traces traces its lineage back to Alexander Graham Bell and the American Telephone and Telegraph corporation. Besides, AT&T gets the vast majority of its revenue from customers in the U.S.

True, AT&T will see an increase in overseas revenue with its acquisition of DirecTV (DTV), but it still will mostly be a bet on the U.S. — and there’s no question it makes any list of redoubtable dividend stocks to buy.

For one thing, AT&T stock has the highest dividend yield of any Dow stock, and it’s always among the top 10 S&P 500 dividend stocks by yield.

T stock has also been a terrific long-term holding. As we noted recently, over the past decade, AT&T stock has a 10-year total return of 150%. The S&P 500′s total return over the same period comes to just 110%.

All-American Dividend Stocks to Buy – Exelon (EXC)

Exelon EXC stock stocks to buyUtilities are the top-performing sector of the S&P 500 for the year-to-date, and Excelon (EXC) has been doing as much heavy lifting as any of the stocks to buy in this group. EXC stock is up more than 30% on a price basis so far in 2014. Add in the 3.5% yield on the dividend — which Exelon actually cut in early 2013 — and the total return comes to 33%.

But great doesn’t just describe EXC stock’s performance this year; it’s also an apt word for its market size and sprawl. This $30 billion utility stock is among the largest in the sector. At the same time, with operations in 48 states and the District of Columbia, EXC can be said to be literally all-American.

Meanwhile, Exelon is set to get even bigger, notably in the Mid-Atlantic region of the U.S. In April, the company agreed to buy rival Pepco (POM) in an all-cash deal worth nearly $7 billion.

What’s perhaps greatest of all, EXC stock is a defensive champion. It’s beating the S&P 500 by more than 25 percentage points this year, but with a fraction of the broader index’s volatility.

All-American Dividend Stocks to Buy – Verizon (VZ)

Verizon stock VZ stocks to buyDividend Yield: 4.3%

Verizon (VZ), the nation’s largest telecom company, has a market cap so great that it exceeds fellow Dow component AT&T by more than $20 billion. And like its No. 1 rival, VZ traces its roots back to the original Bell System, as it was formed by the merger of Bell Atlantic and GTE at the turn of the 21st century.

If that’s not great and American enough, consider that VZ subsidiary Verizon Wireless alone has more than 100 million subscribers. That means just the wireless unit counts a little less than one in three Americans as customers.

With a generous and dependable dividend — currently yielding 4.3% — VZ stock has been a long-term total return monster. True, for the year-to-date, VZ stock is lagging the broader market on both price appreciation and total return, but go further back, and you can’t beat it for a retirement portfolio.

Indeed, during the past 10 years, between price appreciation and dividends, VZ stock is up more than 150%. The total return for the S&P 500 comes to just 111% over the same span.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/06/dividend-stocks-to-buy-att-vz-exc/.

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