It has been a brutal May for most investors. The Dow is down about -10% so far as of the opening bell today, the S&P 500 is down -11% and the Nasdaq off -12%. Low risk trading strategies are crucial to stock investing as a result of these harsh stock market conditions.
The best investment strategy is investing money in the best stock picks that pay you no matter what happens to the broader indexes.
My recommendation to you: Hide out in great blue chip stocks with upside potential for shares and a healthy dividend to help you ride things out when the market gets rocky.
My top stock along these lines for June is Dr. Pepper Snapple Group (DPS).
DPS products include not just its namesake drinks but also Yoo-hoo chocolate milk, to Penafiel mineral water sold in Mexico and a host of other beverages. When the company announced its earnings for the first quarter, during the May 6 massive sell-off, it was one of the few companies to end the day up thanks to both increased revenue and positive earnings. This shows me that Dr. Pepper Snapple has staying power.
Related Article: 7 Low-Risk Dividend Stocks with High Yields
True, with a yield of less than 3% there are a number of other dividend stocks with higher yields than Dr. Pepper Snapple. However, those companies may not have the same upside share potential as DPS.
Take dividend stock bellwether AT&T (T), which is consistently one of the
top dividend stocks in the Dow and currently boasts a dividend yield of about 7%. Dr. Pepper Snapple is up 26% year-to-date as of the opening bell, compared with a -15% slide in AT&T. Obviously the bigger dividend doesn’t offset that disparity.
The earnings of this beverage blue chip prove it also has staying power. Dr. Pepper Snapple has topped Wall Street estimates in each of the last four quarterly reports, with an earnings surprise that averages over 11%. Not bad for a large cap stock with wide analyst coverage.
Related Article: Top 25 Dividend Stocks in the S&P 500 Index
What’s more, Dr. Pepper Snapple Group Inc. boosted its quarterly dividend by 67% just last week to 25 cents a share. If you get in to this stock over the next several weeks and become a shareholder of record before June 21, you will be eligible for the July 9 payout.
As unfortunate as the recent volatility has been on Wall Street, it has served up a very clear reality check to investors.
Put plainly, if you thought that the bull market was going to keep chugging along from the March 2009 lows without a hitch, you got another thing coming.
Buying a dividend stocks like Dr. Pepper Snapple is just one of low-risk trading strategy.
For other tactics, check out a complete article about 7 low-risk trading strategies for June
As of this writing, Louis Navellier was recommending DPS to subscribers of his Blue Chip Growth investment newsletter.
