Yes, October was a tough month for a lot of stocks, especially headline growth stocks. But it all this enthusiasm about growth, income stocks don’t get the coverage — or respect — that they deserve.
One takeaway from the October correction was that it pays to diversify in volatile markets. While it’s nice to ride the growth stock wave, when it breaks, it can be stressful. And you never know when that next wave will come again.
Now, we’re in a strong economy, so that next wave is never usually far behind. But all the same, having solid, long-term stocks that will continue to throw off inflation-beating dividends makes growth stocks’ volatility a lot easier to manage.
What’s more, it gives you exposure to sectors worth your attention but not on growth investors’ radar.
The 10 dividend stocks that make the grade are below. My Portfolio Grader has earmarked these stocks as great choices right now.
Stage Stores (SSI)
Dividend Yield: 11.6%
Stage Stores Inc (NYSE:SSI) might not be a household name, but some of the retailers it owns might be: Bealls, Goody’s, Palais Royal, Peebles and Stage. It operates these brands in 42 states with over 800 stores.
While SSI has only been around since 1988, Palais Royal and Bealls were started in the 1920s. In ’88 the three Bealls brothers merged the two companies and added other brands along the way.
These are smaller department stores for smaller markets, and they primarily focus on women’s fashion. For example, an average Macy’s (NYSE:M) was 250,000 square feet. The new ones it is building are around 150,000 square feet. SSI properties are less than 20,000 square feet and their discount stores are 55,000 square feet. This focus allows SSI just stick to the one thing it’s been doing for decades.
And as the economy continues to rebound, SSI is sure to benefit. Plus, its market cap is only $50 million, so it will move quickly when it moves.
SSI stock is about even over the past 12 months, its dividend is the most eye-catching piece — it currently sits at 11.6%.
Dividend Yield: 6.1%
Gannett (NYSE:GCI) is a major media company that is most famous for its national newspaper USA TODAY. It also owns regional papers like the Detroit Free Press, Des Moines Register, El Paso Times and scores of local papers throughout the US.
By vertically integrating the publishing business, GCI can also offer advertisers a much broader array of options beyond their local or regional audiences. It’s a smart strategy for the digital age.
GCI stock has had a volatile year, largely because it is still trying to keep advertisers in a subscription-based model, where advertisers are limited to how many subscribers GCI can capture.
But with social media companies’ privacy issues becoming more of an issue, and the value of “real” news becoming of growing importance, GCI should be a winner in the news space — and the advertising space.
Right now, GCI is also delivering a very respectable 6.1% dividend yield, so you’re certainly well paid for your patience.
STAG Industries (STAG)
Dividend Yield: 5.4%
STAG Industrial Inc (NYSE:STAG) is the first of a number of firms structured as real estate investment trusts (REITs) featured here. It’s likely they have made the list is because this is a strong market for select real estate sectors and will continue to be into 2019 and beyond.
STAG focuses on single-tenant industrial properties around the U.S. This is an interesting market for one fundamental reason — e-commerce.
You see, as more consuming is happening online, it’s less necessary to have brick and mortar stores than it is to have warehouses and shipping facilities strategically located near customers. And big companies like Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT) want them as close to the “last mile” as possible so they can expand same-day delivery.
STAG should do well as long as the economy remains strong. And its 5.4% dividend yield is a solid anchor to strong long-term business.
BP Midstream Partners (BP)
Dividend Yield: 6.7%
BP Midstream Partners LP (NYSE:BPMP) is a limited partnership spinoff from parent company, integrated oil firm BP (NYSE:BP). Basically, big firms will spin off pieces of their broader business into specific sectors, which helps them manage the volatile energy markets better.
As a limited partnership, stockholders are considered direct owners and the dividends are technically distributions of the net income the company makes.
BPMP focuses on the midstream sector of the energy business. That means it is essentially a pipeline subsidiary of the parent, that also takes business from other firms as well.
This is a solid sector, since it is more demand driven than price driven. As long as energy demand is good, BPMP will do well. And its 6.7% dividend is certainly an attractive kicker.
Life Storage (LSI)
Dividend Yield: 4.2%
Life Storage (NYSE:LSI) began in the self-storage business in Florida in 1985 and is now one of the largest in the US. It currently has nearly 750 self-storage units in 28 states across the US.
Structured as a REIT, is currently delivering a 4.2% dividend and the stock is up about 8% year to date.
In late October, it announced its Q3 earnings and beat on both earnings and revenue. This is a bullish sign that even in a transitional year when housing starts are slowing, demand in its markets continues to grow.
What’s more, it wasn’t just a couple markets that moved the needle for LSI. Most of its properties are seeing increasing revenue.
Realty Income (O)
Dividend Yield: 4.2%
Realty Income Corp (NYSE:O) is a REIT that is all about generating income for its shareholders. It distributes its income on a monthly rather than quarterly basis, which can be very helpful for investors who are income-focused because it allows them to diversify their cash flow from their dividend stocks.
Right now, O is generating a 4.2% annual dividend and the stock is up 10% in the past 12 months. This is a very bullish sign given the slack that we’ve seen in the real estate sector recently.
But O’s client list isn’t too worried about short-term issues like that. They are moving into properties for the long haul. Names like Walgreen’s (NASDAQ:WBA), 7-Eleven, FedEx (NYSE:FDX) and Dollar General (NYSE:DG) fill out their top 20 tenants.
And O is proud of the fact that it has a compounded average annual return of 15.9% since 1994.
Simon Property Group (SPO)
Dividend Yield: 4.2%
Simon Property Group (NYSE:SPG) is the largest REIT in the world and the largest shopping mall operator.
In a time when we’re constantly hearing about the death of shopping malls and the sluggishness of the real estate sector, it would seem kind of crazy to have this stock in this article.
But the fact is, SPG is doing better than anyone expected. The stock is up nearly 15% in the past year and that doesn’t include its 4.2% dividend. JP Morgan (NYSE:JPM) just raised its rating on the stock from neutral to overweight in early October.
The fact is, while some shopping malls have become empty shells on the outskirts of towns, others are thriving. SPG has done a very good job of diversifying its portfolio and focusing on locations where people see malls as destination locations rather than just a collection of stores. Its next moves in Asia could be huge.
Dividend Yield: 4.1%
CubeSmart (NYSE:CUBE) is a self-storage company that is structured as a REIT. It owns and manages more than 800 properties around the US. Its $5.4 billion market cap makes it a decent sized player in the sector.
There are two things going for CUBE right now. One is, as the U.S. workforce continues to shift to second- and third-tier cities and states that companies see as tax advantaged, the movement of workers continues to be a trend. People are still moving around for opportunities and need storage during that transition.
Second, REITs are gaining more attention on Wall Street and CUBE is now in the mix with other REITs. That means when fund managers are building out their REIT funds or consumer funds, CUBE is getting added to that shopping list.
Essentially flat for the year, CUBE has a solid 4.1% dividend.
Dividend Yield: 4%
Macy’s is one of those legacy department store retailers that seemingly had everything going against it just a couple years ago.
We saw the swoon of stores like JC Penney (NYSE:JCP), Sears (OTCMKTS:SHLDQ) and others. We saw the collapse of the anchor stores in shopping malls. It seemed more a “when” not “if” M was going to join the ranks of the demise of department stores.
But Macy’s didn’t sit around and bemoan its fate. It got to work closing stores and reinventing its business model. It boosted its online game. And it leveraged its high-end stores Bloomingdales and Bluemercury.
And it has paid off. M stock is up 49% year to date and over 100% in the past 12 months. And it’s still providing a solid 4% dividend. Remember Rowland Macy launched his company in 1929, so it knows how to find success in transition.
AMC Entertainment (AMC)
Dividend Yield: 5.3%
AMC Entertainment Holding (NYSE:AMC) has been around for nearly 90 years, so it has seen the adoption of plenty of technologies that were supposed to supplant the movie-going audience.
Most recently it has been the streaming services, with huge libraries of original content and other content that people can stay home and watch on giant 4k televisions with theater-style sound systems. As usual, this was assumed to be the beginning of the end for theater companies.
But that hasn’t been the case. If anything, customers are now interested in having their movie theater experience more like their home experience and they will pay for it. They want better food and beverages. Better seating, even reserved seating.
In September, private equity firm Silver Lake invested $600 million in AMC to help upgrade and transition AMC’s theaters to keep pace with changing tastes. We have to wait and see if it can pull this off long-term, but AMC has a long track record of giving its customers — and investors — what they want.
The stock sold off after its latest earnings report after EPS missed estimates … but revenues met expectations, the Stubs program is looking solid and AMC saw record third-quarter attendance.
Not only are analysts still on board, but AMC stock has a 5%-plus dividend and is up around 4% for the year.
Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, 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.