12 Best Dividend Stocks for the Next 12 Months

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dividend stocks - 12 Best Dividend Stocks for the Next 12 Months

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Finding the best dividend stocks involves looking beyond the next few weeks and thinking about a long-term investment. After all, if you’re only in a dividend stock for a short time then you may not get the full yield that’s based on a full year of payouts.

And heck, if you don’t pay attention to dividend dates, you may not get a single payment!

It’s much better, then, to focus on the best dividend stocks for the next year instead of just the next month. That is the only way to ensure that you get a full battery of payments from your investments, and that you maximize the income potential of your portfolio.

In truth, all investors are too short-sighted with their portfolios. They fear short-term volatility, and make rash decisions. But particularly if you’re a dividend investor, thinking in any less than 12-month increments can be very detrimental to your performance.

To help you make the most of 2018, then, here are 12 dividend stocks that will continue to profit for the next 12 months, not just the short term.

Dividend Stocks to Buy Now: Enterprise Products Partners (EPD)

Dividend Stocks to Buy Now - Enterprise Products Partners (EPD)
  • Sector: Energy
  • Market Cap: $52 billion
  • Yield: 7%
  • YTD Return: -10% vs. 17% for the S&P 500

Pipeline operator Enterprise Products Partners L.P. (NYSE:EPD) is a great example of the income potential in energy stocks. While exploration and production companies have to take on big debts on the hopes that they will strike enough oil to turn a profit, EPD is just a middleman between those producers and the marketplace. That insulates it from the volatility of energy prices, and allows for a more reliable revenue stream.

In addition to the reliable revenue stream of its business, EPD also boasts an impressive scale that should be attractive to low-risk investors. The energy company operates more than 49,000 miles of pipeline, 260 million barrels of crude oil storage and another 14 billion cubic feet of natural gas storage.

Currently, Enterprise Products offers a great yield of 7%, and has a strong track record of raising distributions over time, too. It’s this constant and growing payout that is the hallmark of a good MLP investment.

Dividend Stocks to Buy Now: Ladder Capital (LADR)

  • Sector: REITs
  • Market Cap: $2 billion
  • Yield: 9.2%
  • YTD Return: 1% vs. 17% for the S&P 500

Ladder Capital Corp (NYSE:LADR) is not your typical real estate investment trust. Unlike other stocks that own shopping malls or office parks, LADR doesn’t own physical properties. Instead, it invests as a third party in these real estate holdings either through lending, equity investments or other financing.

This makes Ladder Capital more of a financial stock than a real estate play in a way, since its stock is tied to the performance of its underlying investments in properties. But the difference is that while banks can operate with a bit more flexibility, the designation as an REIT demands that the firm delivers 90% of taxable income back to shareholders. That is a mandate for big dividends, with LADR being a pass-through for shareholders who want to share in the fruits of its investments.

Those investments are looking pretty strong, too, with loans and investment in properties that span the country from New York to L.A. Those deals collectively deliver a more than 9% dividend to shareholders via the interest on those loans and other capital appreciation. And as the American economy continues to thrive with low unemployment, high consumer confidence and a roaring stock market, these investments are sure to keep delivering.

This is a great cyclical dividend play for the next few years as a result of rising rents and property values in 2018.

Dividend Stocks to Buy Now: AbbVie (ABBV)

Dividend Stocks to Buy Now: AbbVie (ABBV)
  • Sector: Healthcare
  • Market Cap: $153 billion
  • Yield: 3%
  • YTD Return: 52% vs. 17% for the S&P 500

AbbVie Inc (NYSE:ABBV) was spun off of Big Pharma mainstay Abbott Laboratories (NYSE:ABT) in 2013, and it is the drug-focused arm of the previous company. It’s home to current blockbusters, including psoriasis treatment Humira as well as a research-driven drugmaker looking for the next generation of big-name cures.

Analysts are projecting revenue growth at ABBV of almost 10% this year and next, and profit expansion of 15% or better both years thanks to a strong pharmaceutical portfolio. And that success has translated into generous dividends, as the company has ramped up its payout from 40 cents after its initial spin-off to 64-cents-per-share just four years later.

With decent profit growth resulting in continued dividend growth, investors can enjoy not just a robust payout now, but the hopes of continued payouts from this healthcare giant going forward.

Dividend Stocks to Buy Now: Southern Company (SO)

Dividend Stocks to Buy Now: Southern Company (SO)
  • Sector: Utilities
  • Market Cap: $51 billion
  • Yield: 4.5%
  • YTD Return: 4% vs. 17% for the S&P 500

Southern Co (NYSE:SO) is one of the largest utilities in the U.S., serving 19 states through various subsidiaries. While its oldest core holdings, including Alabama Power and Georgia Power, are electric utilities, the company’s Southern Company Gas operates a massive natural gas distribution business from Maryland to Florida and its Southern Telecom is a play on fiber optics in the Southeast as well.

SO stock offers scale and stability, and is a consistent dividend payer that has mailed check to shareholders since 1982. On top of that, Southern Company has raised dividend payouts at least once each year since 2001 even as it has continued to expand aggressively into other businesses and geographies.

Utility stocks are some of the safest bets out there thanks to geographic monopolies and a highly regulated industry that doesn’t allow for new entrants or much competition. As one of the nation’s leading utilities with a reliable customer base, SO is sure to prosper in 2018.

Dividend Stocks to Buy Now: Phillips 66 Partners (PSXP)

Dividend Stocks to Buy Now – Phillips 66 Partners (PSXP)

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  • Sector: Energy
  • Market Cap: $5 billion
  • Yield: 5.8%
  • YTD Return: -7% vs. 17% for the S&P 500

Many of the most successful MLPs have been created by large energy companies that want the benefit from the unique structure of this kind of business. It’s often a win-win for both the primary stock that is the general partner as well as for the new partnership that has been created, and that’s exactly the case with Phillips 66 Partners LP (NYSE:PSXP) and its corporate parent ConocoPhillips (NYSE:COP).

Spun off in 2013, Phillips 66 Partners consists of pipelines, terminals and other midstream assets that help power the broader ConocoPhillips business. The tax benefits and a generous yield of over 5% kicked back to COP as a major investor make it great for the parent, but the MLP benefits nicely too. Consider PSXP received more than $2.3 billion in projects from its parent company last year alone!

Phillips 66 Partners has raised its distribution for 16 consecutive quarters since entering public markets, and is clearly committed to delivering consistent income to its shareholders.

Dividend Stocks to Buy Now: Medical Properties Trust (MPW)

Dividend Stocks to Buy Now – Medical Properties Trust (MPW)

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  • Sector: REITs
  • Market Cap: $5 billion
  • Yield: 7%
  • YTD Return: 12% vs. 17% for the S&P 500

Medical Properties Trust, Inc. (NYSE:MPW) is a fast-growing REIT seeing brisk expansion of its funds from operations — the most important measure we can get from this special class of tax-sheltered companies. That reliable and growing flow of cash also helps fuel reliable and growing dividends, to the tune of 7% currently.

But it’s not just the income potential that’s worth a look here. Aging baby boomers are increasing demand for care in the U.S., inflationary trends guarantee pricing power in the sector, and even in an economic downturn you’ll see Americans cut back on everything but their healthcare.

MPW is well-positioned to capitalize on this trend thanks to its ownership of community hospitals and acute-care centers — and a recent acquisition of 11 more facilities will certainly boost its numbers in the year ahead.

Dividend Stocks to Buy Now: Altria (MO)

Dividend Stocks to Buy Now: Altria (MO)
  • Sector: Consumer staples
  • Market Cap: $129 billion
  • Yield: 3.9%
  • YTD Return: -2% vs. 17% for the S&P 500

Altria Group Inc (NYSE:MO) may strike some as a no-growth company without much upside. However, this pick is not just a dividend stock; consider that over the past five years, it has actually outperformed the S&P 500 in share price performance alone thanks to aggressive buybacks and shrewd management of profitability.

And of course, MO stock is a go-to for dividend investors after 48 consecutive years of increases in its payout. Those increases aren’t a penny here and there, either — as evidenced most recently with an 8% bump in 2017 from 61 cents to 66 cents.

Yes, traditional tobacco products are on the outs. But keep in mind that Altria is not merely Philip Morris USA — the name behind iconic cigarette brands like Marlboro and Parliament. Altria also dabbles in smokeless products and even wines via producer Ste. Michelle. This provides an added level of long-term stability.

Shares haven’t done much lately in 2017, but with a forward price-to-earnings ratio of less than 18 and reliable profit growth ahead in 2018, I’d bank on Altria regardless of short-term market trends.

Dividend Stocks to Buy Now: Cisco (CSCO)

Dividend Stocks to Buy Now: Cisco (CSCO)

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  • Sector: Technology
  • Market Cap: $186 billion
  • Yield: 3.1%
  • YTD Return: 25% vs. 17% for the S&P 500

When investors look for reliable dividend stocks, often they overlook the tech sector. That’s in part because even tech companies like Apple Inc. (NASDAQ:AAPL) that pay some kind of dividend still offer less than 10-year Treasuries — or on the flip side, because many tech stocks that do yield a decent amount don’t have much to offer investors beyond their dividends.

But Cisco Systems, Inc. (NASDAQ:CSCO) stands apart. Not only does the IT giant currently offer an attractive dividend, with payouts that have jumped from 6 cents in 2011 to 29 cents a quarter at present, it also has a good growth story to tell after an impressive earnings report before Thanksgiving. Not only did it beat on earnings and boost its outlook, but the company showed Wall Street it is effectively transitioning away from networking hardware and into cloud-based solutions that are the norm in 2017. Shares are up about 20% in the last three months as a result.

These structural improvements at CSCO bode well for 2018 and beyond. And given Cisco’s commitment to increased dividends and deep pockets with some $72 billion in cash and investments in the bank, you can be certain this company will keep rewarding shareholders for the next decade to come.

Dividend Stocks to Buy Now: Diageo (DEO)

Dividend Stocks to Buy Now: Diageo (DEO)
  • Sector: Consumer staples
  • Market Cap: $87 billion
  • Yield: 2.3%
  • YTD Return: 35% vs. 17% for the S&P 500

Diageo plc (ADR) (NYSE:DEO) is a world leader in the spirits business, with mega-brands including Johnnie Walker whisky, Smirnoff vodka, Tanqueray and Guinness beer, among a host of others. And thanks to a focus mainly on liquor, DEO stock has been largely insulated from the shakeup we’ve seen in the beer biz as craft brews have eroded share.

For instance, even as Anheuser Busch InBev NV (ADR) (NYSE:BUD) has struggled since 2015 despite a $200 billion operation with some of the biggest mainline beers on the planet, Diageo has slightly outperformed the market thanks to modest but consistent growth.

As a “sin stock,” Diageo also has the unique benefit of seeing stable or even increased demand during hard times. After all, why give up your cocktails if the market is crashing, hurricanes are bearing down on your house and North Korea is thinking of detonating a nuke?

Dividend Stocks to Buy Now: Dominion Energy (D)

  • Sector: Utilities
  • Market Cap: $52 billion
  • Yield: 3.7%
  • YTD Return: -10% vs. 17% for the S&P 500

Dominion Energy Inc (NYSE:D) is a safe play for a host of reasons. But chief among them are the facts that it is a low-risk utility stock with reliable operations and a significant yield.

Dominion generates electricity mainly in the mid-Atlantic region of the U.S. from North Carolina to Pennsylvania and distributes natural gas across a wide swath of the American West. The consistent cash flow from these operations has fueled consistent dividend payouts for almost 90 years, and has allowed Dominion to grow payouts substantially over time; distributions were 39.5 cents quarter at the end of 2008 and are now 77 cents, an increase of about 95% in about nine years.

The icing on the cake is that Dominion is one of the most adaptable and diversified utilities in the U.S., with numerous nuclear and renewable power generation facilities in its portfolio. This isn’t just good as a hedge against the long-term decline of fossil fuels, but also a bridge to new business. One recent headline that should really pique investor interest is a recent contract to provide renewable energy to a Facebook Inc (NASDAQ:FB) data center in Virginia.

That kind of willingness to meet big corporations where they live is a strong sign that Dominion is forward-thinking and isn’t just sitting back collecting monthly checks from customers.

Dividend Stocks to Buy Now: Merck (MRK)

Dividend Stocks to Buy Now: Merck (MRK)

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  • Sector: Healthcare
  • Market Cap: $151 billion
  • Yield: 3.4%
  • YTD Return: -6% vs. 17% for the S&P 500

Merck & Co., Inc. (NYSE:MRK) continues to see growth as its drugs look to fight common American health conditions. Its blockbuster diabetes drug Januvia, which helps lower blood sugar, accounts for some $4 billion in annual sales and its Zetia cholesterol medication racks up over $2 billion in annual sales.

And it’s not done, either, with a strong product pipeline that includes cancer drug Keytruda. The pipeline could open avenues to much bigger revenue after a very nice showing so far in 2017. The marriage of so-called “maintenance” drugs to provide regular revenue will fuel dividends now, and new drugs could yield continued dividend growth going forward.

With one of the biggest and most stable brands in medicine, this healthcare stock is a great long-term play for dividend investors. The healthcare company has paid consistent dividends since 1970, and is a rock-solid bet for the coming year.

Dividend Stocks to Buy Now: Procter & Gamble (PG)

Why PG Stock Quietly Became a Buy
  • Sector: Consumer staples
  • Market Cap: $1225 billion
  • Yield: 3.1%
  • YTD Return: 6% vs. 17% for the S&P 500

You couldn’t have a list of safe-haven investments without Procter & Gamble Co (NYSE:PG), one of the most reliable consumer names on the planet.

Powered by amazing brands from Dawn dish soap to Gillette shaving products to Crest toothpaste, P&G has its fingerprints all over the typical household. And best of all for low-risk investors, these products will keep selling no matter what the macro picture is like because people still need to clean their bodies and their kitchens regardless of where the S&P is headed.

It also has a consistent commitment to dividends, increasing its payout for the last 60 straight years, and has been generous with those increases to boot; distributions have roughly doubled in the last decade, meaning P&G dividend hikes are in the ballpark of 10% each year.

Yes, shares have been rangebound for a few years now. But a recent proxy fight with activist investor Nelson Peltz has shaken the company awake. And even if the tally in the voting has been disputed by P&G, the message from its investors is crystal clear: pay more attention to the bottom line and to delivering real shareholder value. That should usher in some important changes that help this stock remain dominant as we enter 2018.

As of this writing, Jeff Reeves did not have a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/11/12-best-dividend-stocks-next-12-months/.

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