Growth has been the big story for a very long time. And given some of the recent GDP numbers, as well as the passage of the tax bill in DC, growth seems to be on track for some time to come.
But there are a couple things that investors may want to bear in mind as we enter 2018.
First, the Federal Reserve is starting to raise rates again. And it’s expecting at least three increases in 2018.
Second, the Fed is stopping its buying of mortgage-backed securities.
The latter is an entirely new occurrence for the market, since quantitative easing (buying the mortgage-backed securities) was an entirely unique situation when it began nearly a decade ago.
The one thing that will almost surely happen is interest rates will rise. And whatever effect that has on the economy and investing, it will help making income investing cool again.
And if the growth stocks cool off as money goes into bonds and the economy slows, income stocks could be the next hot sector. For that reason, below are my seven dividend stocks that make the grade.
Regardless of what happens, these will be winners.
Dividend Stocks to Buy: AT&T (T)
Dividend Yield: 5.1%
AT&T Inc. (NYSE:T) has scored a significant victory in the recent FCC ruling repealing the current net neutrality laws. But there will still be legal wranglings from those who oppose the repeal, so there won’t be much excitement in the stock until the smoke clears.
However, T’s merger deal with Time Warner Inc (NYSE:TWX) that was held up by the Justice Department looks like it may go T’s way eventually.
But the thing about AT&T is, it’s so big it will find a way to thrive, regardless of what gets thrown its way. As the tide of deregulation grows, T will be along for the ride.
Right now, the stock is off 9% year to date as most analysts focus on mobile numbers. But the next leg up with be about content and streaming. And until that happens, its rock-solid 5.1% dividend will help.
Dividend Stocks to Buy: Oneok (OKE)
Dividend Yield: 5.7%
ONEOK, Inc. (NYSE:OKE) is one of the top midstream energy service providers in the U.S.
Basically, midstream companies are pipeline firms that, in the case of OKE, distribute natural gas and natural gas liquids (NGLs) from the drill sites to distribution centers and refineries.
OKE makes its money on the volume of gas and NGLs it moves through its pipes rather than the price of natural gas. That means when the economy is expanding, so is its business, as well as OKE’s stock price.
With operations in most of the major shale regions and headquartered in Oklahoma, a major hub for natural gas and NGLs, OKE is a very smart way to play the comeback in the U.S. energy sector. Its 5.7% dividend makes the wait worthwhile.
Dividend Stocks to Buy: Gramercy Property Trust (GPT)
Dividend Yield: 5.5%
Gramercy Property Trust (NYSE:GPT), a real estate investment trust (REIT), is a global investor in single-tenant industrial properties.
This has two advantages over many REITs. First, it isn’t in the retail space — shopping malls — so it doesn’t have an issue with the vagaries of brick-and-mortar shopping trends.
Second, it is focused on what promises to be one of the hottest sectors in REITs in coming years. Industrial facilities are the key to same-day delivery operations, which is a major push for most retailers, whether online or from storefronts.
And it’s likely beyond the major logistics companies, retailers and grocers will be investing heavily in this new infrastructure to stay ahead of the curve for customers.
All that growth and a 5.5% dividend are a great place to start the ride.
Dividend Stocks to Buy: B&G Foods (BGS)
Dividend Yield: 5.1%
B&G Foods, Inc. (NYSE: BGS) produces and distributes shelf-stable and frozen products. Its brands run from B&M beans to Ortega Mexican products to French’s, Skinnygirl, Emeril’s, Spice Islands and Weber as well as many more.
And even in that small sampling, you see the challenge that BGS and every other competitor face in this sector — the way to navigate the solid old brands and the new hot brands.
BGS has done a good job of navigating these treacherous waters, but this sector, as well as consumer staples in general, have been under a lot of pressure since they aren’t really big-growth firms.
But it has a solid base of institutional investors and a good size chunk of inside investors, which is always a good sign. Its nearly 5.3% dividend is also very helpful.
Dividend Stocks to Buy: Cheniere Energy Partners (CQP)
Dividend Yield: 6.3%
This is one of the newest export terminals for liquified natural gas (LNG). And that makes it a potential gold mine. It’s the first export facility to open in the U.S. in decades.
Before unconventional drilling methods became available, the assumption was that the U.S. needed more import terminals to supplement the country’s energy requirements.
Now that we can drill into the vast amounts of natural gas in the U.S. shale deposits, exporting the gas became the priority. But these terminals take years to build and Sabine Pass was one of the first new one online. As the economy revives, so will CQP stock’s fortunes and its 6.2% dividend.
Dividend Stocks to Buy: The Carlyle Group (CG)
Dividend Yield: 5.5% over the past 12 months
The Carlyle Group LP (NASDAQ:CG) is a global alternative asset management firm.
For decades, CG was only accessible to the rich and powerful global elite. It was a place where Saudi royalty and U.S. dynasties would put their money for safe long-term returns.
But as the financial markets changed, so did the way these blue-blood investors invested. And CG changed with the times as well.
It invests in projects, property and investments on every level. It also still maintains a relatively boutique flavor in this sector, with a market cap around $7 billion. But it still performs as solidly as ever, up 48% year to date and delivering a 5.5% dividend.
It may not be flashy, but who needs flashy with this kind of performance?
Dividend Stocks to Buy: Williams Partners (WPZ)
Dividend Yield: 6.2%
Williams Partners LP (NYSE:WPZ) is major midstream energy company that is based in the hub of U.S. energy distribution, Oklahoma.
Midstream players are basically pipeline companies and WPZ specializes in moving natural gas and natural gas liquids (NGLs) from the wellheads to storage facilities and refineries.
This sector of the energy industry is usually the leading indicator on the energy industry and the broader economy in general. Midstream firms make their money moving product, not on the price of the products.
That means, when demand is expanding — a sign that the economy is growing — midstream firms are getting more business. For products like NGLs, certain chemicals that are derived from natural gas and used to make plastics, paints and other items, as the economy grows industrial firms start ordering in advance of demand and the first place that shows up is in business like WPZ.
Plus, as a limited partnership, you’re considered an owner and get “paid” in the form of a dividend. Right now that’s a 6.2% paycheck.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. 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, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.