Interest rates are likely to remain low, what with the global economy still on shaky ground, and the Federal Reserve essentially pushing back any thoughts of a rate hike thanks to the fallout from the Brexit vote.
And once again, dividend stocks look very, very appealing.
Of course, not every stock with a yield is a no-brainer buy. Many stocks have been driven higher in the past few weeks, shrinking yields in now overbought companies. Several other dividend stocks have sky-high but unsustainable yields that might not even exist in a few years.
However, the following group of dividend stocks offers a proper blend of positive traits: good yields, yes, but also sustainable businesses and some near- or long-term tailwinds. In a couple of cases, recent underperformance has plumped up yields while also presenting a rebound opportunity.
In no particular order, here’s a look at nine dividend stocks you can feel comfortable buying with your eyes closed.
Dividend Stocks to Buy With Both Fists: Carnival (CCL)
Dividend Yield: 3%
Cruise ship operator Carnival Corp (NYSE:CCL) suffered a 6% loss right after the Brexit vote as investors worried about the impact that the United Kindgom’s exit from the European Union would have on travel. CCL has yet to recover from this loss, trading at under $46 per share.
However, Carnival is a good buy for dividend investors on this dip.
Shares yield slightly more than 3% right now, and the company is trading at just 16 times earnings and less than 12 times next year’s estimates — a favorable number compared to industry peers. Meanwhile, the firm’s payout ratio is just 43%, so not only is this dividend secure, but CCL has plenty of room to raise it in the future.
Yes, the current economic climate doesn’t bode well for vacation spending, and global terror attacks don’t either. But investors looking down the road should consider riding out the choppy waters, enjoying a good dividend until the rebound comes.
Dividend Stocks to Buy With Both Fists: Unilever (UN)
Dividend Yield: 3%
Consumer goods giant Unilever N.V. (ADR) (NYSE:UN) is another stock that was hit hard by the Brexit vote, though unlike Carnival, Unilver’s share price has since recovered.
Based in the Netherlands, UN is very exposed to the turmoil in Europe, but the firm’s business selling essential goods like food and personal care items is unlikely to be impacted much by anything, even continued economic struggles in the region. Unilever’s brands include Axe body washes, Dove body care products and Hellmann’s mayonnaise, among others.
UN shares aren’t trading at a discount, but given the stock’s solid dividend and the company’s space in the consumer staples sector, expect Unilever to remain in favor as long as global economic uncertainty persists.
Dividend Stocks to Buy With Both Fists: Qualcomm (QCOM)
Dividend Yield: 3.5%
Chipmaker Qualcomm, Inc. (NASDAQ:QCOM) offers one of the best dividend payouts in the tech space today. The firm’s dividend yield of 3.5% on a payout that’s less than half Qualcomm’s earnings makes for one of the safest big yields in technology.
QCOM is facing some obstacles at the moment, with a slowdown in smartphone sales and exposure to China weighing on its bottom line. However, the firm has begun to focus on designing chips for the Internet of Things and data centers, both promising areas for growth.
The firm’s most recent earnings beat has made shares more expensive, but the company’s P/E of 18 is still below average for the industry.
Dividend Stocks to Buy With Both Fists: IBM (IBM)
Dividend Yield: 3.5%
Over the past few years, International Business Machines Corp. (NYSE:IBM) has been struggling to grow its revenues, and its latest release showed no changes on that front, with the company suffering its 17th consecutive quarter of sales declines.
And yet, IBM still should be considered a buy for long-term investors, thanks in part to its thick 3.5% yield. That should be enough compensation while IBM finally figures out a turnaround. IBM’s Watson supercomputer has the potential to disrupt both the healthcare and cybersecurity markets, and the company’s efforts to grow its cloud computing arm appear to be paying off.
These areas — dubbed “strategic imperatives” by management — have been growing rapidly. Although they represent only a small fraction of the company’s overall revenues, the strategic imperatives generated $8.3 billion last quarter, a 12% increase on a year-over-year basis.
Dividend Stocks to Buy With Both Fists: Wells Fargo (WFC)
Dividend Yield: 3.2%
So far, 2016 has been a rough year for banks — Wells Fargo & Co (NYSE:WFC) included. With interest rates unlikely to rise and instability across the globe weighing on investors’ confidence, banking stocks have taken it on the chin — but have become relatively cheap in the process.
Specifically, Wells Fargo has shed 11% so far this year, but now trades at just 12 times earnings.
While WFC is far from a growth engine, the bank is a solid bet for long-term dividend investors. That’s because Wells Fargo is one of the most conservatively run banks in the U.S. WFC was able to slog through the financial crisis without ever reporting an annual loss, making it a good bet in the financial sector as banks around the world absorb the Brexit shockwaves.
Dividend Stocks to Buy With Both Fists: Coca-Cola (KO)
Dividend Yield: 3.1%
When thinking about dividend stocks, The Coca-Cola Co (NYSE:KO) can not be ignored.
The beverage company has been a favorite of billionaire investor Warren Buffett’s, who says he would never sell KO shares, and for good reason. Coca-Cola has a stable of can’t-miss brands that powers a financially stable company that pays a bulletproof dividend.
In fact, KO has consistently raised its payout every year for the past 54 years.
Shares of KO aren’t trading at a massive discount right now, but it doesn’t need to. Coca-Cola not only continues to lead the soda world with its legacy namesake brand, but it also boasts more than 500 sparkling and still brands. The company has a lot of exposure to high growth in emerging markets, and KO also has been undergoing a restructuring phase designed to cut down on costs and improve marketing efforts.
Dividend Stocks to Buy With Both Fists: General Motors (GM)
Dividend Yield: 4.8%
Automaker General Motors Company (NYSE:GM) has been beaten up amid a rocky 2016 that has GM shares off 6% for the year-to-date.
Investors are missing out on a wild bargain, though. GM stock currently trades at a mere 4 times earnings, and a strong dedication toward healthy dividend payouts has GM yielding nearly 5% right now.
Under CEO Mary Barra, General Motors has navigated its way out of a poor situation in which a defective ignition switch resulted in more than 100 deaths — and GM was charged with concealing facts and wire fraud in connection to the case. Now, Barra looks to move ahead by making major strides in self-driving car technology, electric vehicle sales and ride-sharing.
Dividend Stocks to Buy With Both Fists: Helmerich & Payne (HP)
Dividend Yield: 4.4%
Oil and gas stocks have taken a beating over the past year as global oversupply has pushed prices downward. While the market is still struggling with rising inventories and uncertainty about the future, many believe that the industry has already hit rock bottom and is ripe for a turnaround.
That means long-term investors would be wise to start buying oil and gas stocks now, especially those like Helmerich & Payne, Inc. (NYSE:HP) that pay a hefty dividend.
Helmerich & Payne is a contract driller that, like most other energy stocks, took a licking in 2014. However, shares have rebounded strongly in 2016, up 17%, and the company has about $950 million in cash and investments versus about $530 million in debt, so this company hasn’t become the horror story that has emerged across other energy stocks.
The firm’s recovery depends heavily on oil and gas producers starting to drill. However, HP has been able to differentiate itself by offering a top-of-the-line fleet of rigs that are capable of shale drilling.
It may take some time, but HP is likely to recover alongside the oil market.
Dividend Stocks to Buy With Both Fists: Apple (AAPL)
Dividend Yield: 2.3%
Apple Inc.’s (NASDAQ:AAPL) dividend yield of 2.3% is the lowest on this list, but nonetheless, Apple has earned a place among the top dividend stocks to buy now.
Apple has lost some 20% over the past year as investors have worried about declining iPhone sales, and shares now trade at just 11 times earnings. Meanwhile, while iPhone sales have been slowing, we’re not too far from the next stage in the upgrade cycle, with the iPhone 7 likely coming this September.
And as long as growth remains a problem, expect Apple to dip into its endless war chest and cash flows to continue paying back shareholders by both bolstering the dividend (Apple’s payout ratio is a mere 22%) and buying back even more shares.
As of this writing, Laura Hoy was long AAPL and UN.