The market is getting a bit frothy here. The low-volatility summer is giving way to a higher volatility fall and that is going to play havoc with your blood pressure if you’re overly exposed to pure growth stocks.
Aside from keeping your blood pressure under control, income stocks are valuable in this type of market because they offer a safe money alternative when things get dicey.
Remember, the Federal Reserve is on the verge of raising rates and Europe and Japan central banks are also changing their buyback strategies. This is very likely to hit the stock market as well as the bond market pretty hard.
Rock-solid income stocks will give you shelter from the storms. And, as more people pile in once the Fed pulls the trigger, you will reap the rewards on both the growth and income sides.
Below are eight dividend stocks that make the grade. These aren’t trades, these are investments and will help keep you and your portfolio well protected — and rewarded — over the long term.
Dividend Stocks to Buy: AT&T Inc. (T)
AT&T Inc. (NYSE:T) is better known for being the original “Ma Bell,” or the landline telephone era as it is for being a telecom disruptor.
Usually, its strategy has been to wait to see what innovations small firms are exploring, see how the market reacts and then buy the ones that are promising. That was reason enough to pick up satellite TV provider DirecTV.
But T is showing a disruptive side these days. It has recently announced it is planning on making web streaming the primary platform for TVs as soon as 2020. When a company this size makes a statement like that, it’s a very big deal.
AT&T has also revealed a new strategy that would allow low-cost, multi-gigabit online speeds to underserved communities by putting wireless antennas on electrical poles. It’s call Project AirGig and could be a serious disruption to internet access.
All this and one of the nation’s top mobile network. Can it get any better? How about a rock-solid nearly 4.7% dividend yield on top of all that? Not bad at all.
Dividend Stocks to Buy: Procter & Gamble (PG)
Procter & Gamble Co (NYSE:PG) is one of the world’s most dominant consumer staples and consumer discretionary companies. Brands like Braun, Oral-B, Gillette, Dawn, Bounty, Crest, Scope, Vicks and Tide are just the tip of the brand iceberg PG manages.
It’s no surprise then that PG is a dividend aristocrat — that means it has delivered dividend growth every year for at least the past 25 years. That’s a very impressive record.
It’s especially impressive because its dividend growth comes from growing sales, not convoluted stock buybacks and derivatives. This is a foundation stock that is a great buy whenever you choose to put it in your portfolio; one of the few buy and hold stocks left in the market.
And it’s a safe bet it’s 3% dividend is reliable and growing.
Dividend Stocks to Buy: Lockheed Martin (LMT)
Lockheed Martin Corporation (NYSE:LMT) is one of the world’s top defense companies.
And as you know, in the U.S. the defense sector has been hamstrung by spending cuts brought on by Congress’ sequestration vote a couple years ago.
But the pendulum swings both ways. And now, after long conflicts in Iraq and Afghanistan, it’s time to rebuild the armed forces at home. And considering the numerous regional conflicts around the world, many other nations are also rebuilding and re-equipping their militaries.
Defense exports are up already this year. And LMT’s equipment is on the top of many of our allies’ lists. Add to that the fact that the U.S. is entering into a growth supercycle in military spending and you can expect LMT to benefit mightily from both trends.
The stock is up 13% year to date and is still delivering an attractive nearly 3% dividend.
Dividend Stocks to Buy: Korea Electric Power (KEP)
Korea Electric Power Corporation (ADR) (NYSE:KEP) is a very interesting utility. KEP has been around for more than a century but it’s looking like a hot tech stock right now. The stock is up 29% year to date and is still throwing off a huge 5% dividend.
Korea is a relatively small nation, with a population just north of 50 million. But it has some of the most advanced and available telecommunications in the world. The average internet speed is significantly faster than it is in the U.S.
And all that tech needs electricity. This is an interesting indirect play on tech as well as a direct play on Asia’s long-term economy. Some of the largest electronics makers are also Korean companies that export their wares around the world.
Dividend Stocks to Buy: Prologis (PLD)
Prologis Inc (NYSE:PLD) is a real estate firm that has focused its properties on one of the major trends of the century — global trade.
PLD is now the world’s leading owner, operator and developer of industrial real estate. That means warehouses and distribution centers for foreign companies looking to move some logistical operations to the U.S., to U.S. firms looking to grow their markets abroad.
While drones may be the “next big thing” in logistics, the industry’s bread and butter is operating a network of distribution centers that cater to the unique needs of specific industries and clients. PLD does this better than anyone.
The stock is up 27% year to date and it is still providing a respectable 3.1% dividend yield. PLD is a good investment through the end of the decade.
Dividend Stocks to Buy: WEC Energy Group (WEC)
Technically, WEC Energy Group Inc (NYSE:WEC) isn’t a utility. That has been a mixed blessing in the past couple of years since it relies on electric and natural gas distribution in the Midwest (Wisconsin, Illinois, Michigan and Minnesota) for its revenue. Given the stagnant economy and low natural gas prices, it hasn’t been a great market.
But the situation is turning around. Natural gas prices are hovering around $3 per million BTUs and the economy is perking up. This is good news for WEC since it thrives when demand for its energy products is rising.
This increased optimism may explain part of its 23% run this year so far. But even after the rally, it’s still providing a 3.1% dividend.
Dividend Stocks to Buy: Entergy (ETR)
Entergy Corporation (NYSE:ETR) is a electric utility (power production and distribution on retail and wholesale levels) a natural gas distribution company and an operator and manager of nuclear facilities around the U.S.
Its power business is focused in Arkansas, Mississippi, Texas and Louisiana. ETR will be the beneficiary of two trends that are unfolding now. First, as a utility, it will see an influx of investors once the market starts to heat up.
Second, ETR’s nuclear business is a unique business that holds promise as U.S. regulators push toward cleaner energy production. Many utilities have gotten out of the nuclear power business, which has helped ETR build a solid book of business maintaining and decommissioning nukes.
The stock is up nearly 20% year to date yet is still providing a healthy 4.2% dividend.
Dividend Stocks to Buy: Kimco Realty (KIM)
Kimco Realty Corp (NYSE:KIM) is a real estate investment trust. That means it develops, owns and operates properties for it clients. In the case of KIM, it specializes in open-air shopping centers.
You may have heard that enclosed shopping malls are dying all around America as many big retail “anchor” stores are shuttering operations to remain competitive in the internet age. But there’s a renaissance in strip malls, or perhaps strip malls 2.0.
And KIM has another ace up its sleeve. Its clients are some of the most solid brands in the business, so there’s little concern they will be moving out before their lease is up. KIM’s client list includes Marshall’s, TJMaxx, Bed, Bath & Beyond, Home Depot, Wal-Mart and Kohl’s to name a few.
As a REIT, it passes it profits through to shareholders in the form of a dividend, which now sits at 3.4%. This is a good time to be a REIT and its 13% move this year shows that smart investors are already moving into KIM.
Louis Navellier is a renowned growth investor and the editor of Louis Navellier’s Dividend Growth. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, DividendGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters