This year has been an interesting one in the markets. Growth has been generous in different sectors, bonds have rallied along with stocks, and tech and income stocks have both been rallying.
Throughout it all, investors are rooting for the Federal Reserve to lower interest rates, which would be a sign of a slowing economy.
Simply put, it’s getting a bit frothy.
One way to navigate through all this is to take the opportunity to transition toward income.
The reasoning is straightforward: If rates are lowered, income stocks are usually in sectors where that is a bullish thing. If the economy slows, it’s good to be in sectors that are longer term in nature and are built to handle market cycles better than growth-only stocks.
These seven dependable dividend stocks below are prime examples of the kind of stocks you want in your portfolio for the good times, and the less-than-good.
Specialty insurance is all about insuring properties that carry unique risks that generally aren’t covered by typical property and casualty insurance. These would include operations, maritime, aviation, logistics or energy assets that have their own specific risks and vary by asset.
Each of those categories — as well as others — breaks down even further, but the larger point is, JRVR is a niche player in important sectors for the global and domestic economies.
Reinsurance is a way for other insurers to hedge their risk on certain properties or reduce their overall exposure on a large policy. They sell a stake of the original policy to reinsurers.
With a solid 2.5% dividend and a year to date return of 32%, JRVA is a top player in this growing sector.
This is an innovative approach that takes advantage of the ability of companies to operate in an open market for energy. Usually utilities have a deregulated division that operates in these types of sectors. GNE is a 15-year-old company that has seized the opportunity to compete in smaller markets where it can operate more effectively than larger utilities.
It operates in 13 states now and has opportunities in another 15.
Currently its market cap is around $303 million, so growth has been its core driver. GNE stock is up 81% year to date, but its nearly 2.7% dividend is a nice investor-friendly backstop.
JPMorgan Chase (NYSE:JPM) is the biggest bank in the U.S. and one of the 10 biggest banks in the world.
That certainly puts it in a different class than many financial stocks. What it also means is it can diversify its risk much better than U.S.-only banking stocks. If rates drop here, JPM can access overseas markets for great opportunity.
It also has a very active and successful trading desk, which helps make money on all the money it has sitting around. This is a key factor in looking at cash-heavy financial businesses like banking and insurance.
It’s not just about writing loans and getting more savings accounts. It’s about making money on money — without overextending the risk on those investments like the financial meltdown in 2008.
JPM is a well-respected leader post-crash and continues to lead the way in the financial sector. It’s up 18.5% year to date but also delivers a rock-solid, inflation-beating 3% dividend.
Its network has 202 markets in 43 countries in North America, Asia, and Europe with 57,400 miles of long-haul fiber and 33,400 miles of metropolitan service for 820 metropolitan rings.
This is the raw fiber optic power that commercial IP providers use to build out their networks. That means it’s the lifeblood of the connectivity that the globe has come to expect. And that includes mobile networks.
Plus, with a nearly 3.9% dividend, it’s a great long-term holding. And the fact that the stock is up 38% year to date with plenty of growth to come isn’t a bad deal either.
According the Council on Foreign Relations website, there are four critical conflicts and 12 significant conflicts relative to U.S. interests going on in the world right now. And that means the U.S. is involved by active means or by helping arm and support one side in the conflict.
But weapons and systems aren’t just about putting out fires, they’re about preventing them as well. And the U.S. is spending big on defense now that the spending caps have been removed. Within the next year or so, the defense budget just for the U.S. will be more than $1 trillion.
Unsurprisingly, given this big growth, LMT is up 40% year to date yet it still delivers a 2.4% dividend.
VOC Energy Trust (NYSE: VOC) is basically set up as landlord for 820 wells in Kansas and Texas that produce oil, natural gas and oil equivalents.
The wells contribute a chunk of their revenue to the holding company (the trust) like rent. The trust then distributes that net income to trustholders (i.e., shareholders).
Essentially, like with real estate income trusts (REITs) and master limited partnerships (MLPs), investors are paid as investors in the company through generous dividends that rise and fall relative to business.
Right now, the dividend is a stunning 12.6%. Just remember, the energy markets are dynamic and VOC has a $93 million market cap, so it can be volatile. Also, don’t chase the stock, since the share price is spiky.
For example, its year to date performance is up 44% but its 12-month performance is -8%. But given the bullish outlook for energy, this is the good side of the trend right now.
It has more than 2,200 branches and 894 onsite locations across the U.S. — and that doesn’t include its growing e-commerce business. Last year, it made about $5 billion in sales.
If America is growing, so is FAST. It supplies all the industries that go along with a growing economy. And the fact that it has been around more than 50 years means it knows how to grow in good times and bad.
Part of that is its diverse product selection. By catering to different industries, if manufacturing slows, real estate development may be growing. Accessing a variety of opportunities keeps FAST in play.
FAST stock is up 18% year to date which is a respectable return in this sector. And its solid 2.7% dividend reflects a company that values its shareholders.
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.