It’s inevitable: no matter where you turn, growth stocks generate the most headlines. Typically, these are companies involved in next-generation technologies. As a result, they simply attract risk-takers wanting to speculate on the next big thing. However, investors with longer-term and more realistic goals should consider dividend stocks.
For one thing, dividend stocks obviously provide passive income. Therefore, they provide a platform of stability which will likely come at a premium. We all know that this is the longest-running bull market in history. Therefore, the best stocks to buy might not be related to companies that move under risk-on environments.
Second, many if not most dividend stocks are levered toward secular industries that feature consistent demand irrespective of economic conditions. Areas such as consumer staples, healthcare, and even energy are increasingly becoming safe bets because they represent unavoidable expenditures. That’s a key concept to consider as the ugly U.S.-China trade war rages on.
Finally, the Federal Reserve is all but incentivizing dividend stocks. Although the economy is doing well on paper, the Fed will likely lower benchmark interest rates at July’s end. Essentially, the central bank is determined to nip any sign of a broader slowdown in the bud.
Under such circumstances, it’s almost criminal not to consider dividend stocks to buy. Here at the best ones to buy, divided among investments appropriate for conservative, balanced, and speculative portfolios.
Home Depot (HD)
Whenever discussions arise about safe dividend stocks to buy, Home Depot (NYSE:HD) immediately rises near the top. Obviously, the company generates strong secular demand. Recession or not, people still have to renovate their properties or rebuild after a calamitous weather-related event. Thus, HD stock steadily inches higher, even though it’s hardly the sexiest name.
That said, HD stock is enduring a rare PR crisis. Billionaire co-founder Bernie Marcus recently pledged his support for President Donald Trump’s re-election bid. After the initial word got out, the social media circus responded with outrage, calling for a Home Depot boycott.
But is this enough of a reason to dump HD stock? Absolutely not! No matter what the circumstance, Home Depot is easily one of the best stocks to buy. Perhaps folks should realize first and foremost that this is America. The beauty about living in this country is that the people can vote for whomever they want.
Secondly, Home Depot’s business is largely Amazon (NASDAQ:AMZN)-proof. With products like power tools or kitchen tiles, you really want to try before you buy. Right now, e-commerce just doesn’t suit this consumer need, which bolsters the case for HD stock.
TD Ameritrade (AMTD)
Under almost any circumstance in the pre-mass digitalization era, TD Ameritrade (NASDAQ:AMTD) represented one of the best dividend stocks to buy. For one thing, AMTD stock brought steady capital returns, and for good reason: if you want to build wealth, the equity markets offered a simple and intuitive platform.
But in the current era where millennials reign in the workforce, AMTD stock doesn’t seem like such a smart bet. That’s because millennials eschew the markets for cash, more so than any other generation. And why? Primarily, most millennials came of age during the 2008 financial crisis. Understandably, that event scarred young workers and put them off investing.
So why even mention AMTD stock? Because no matter what happens, we’ll always have a stock market. I’m saying this even though I personally hold cryptocurrencies in high regard.
Moreover, emerging and transformative investments like legal marijuana have enticed young buyers. As our own Will Ashworth reported, millennials consider companies like Aurora Cannabis (NYSE:ACB) among the best stocks to buy. Therefore, we haven’t heard the last from AMTD stock.
Unilever (NYSE:UN) represents the more traditional route of safe dividend stocks to buy for purely obvious reasons. As a producer of common household goods such as soap, deodorant, and skincare products, UN stock rides on secular demand. Even in a recession, you still need to take care of yourself.
And the latter point is especially compelling for investors seeking the best stocks to buy in a possible downturn. Although the fact that we’re on the longest bull market in history is an oft-discussed topic that may have lulled some to ignore the implications, a correction can come at any moment. If it does, passive-income generating investments like UN stock will probably suffer the least damage.
Plus, you can have confidence in Unilever’s solid financials. Sure, it doesn’t have the cool factor of a fast-rising tech upstart. However, with UN stock, you get robust net income, which in turn helps generate consistently strong free cash flow.
Where the market is right now, stability and trust may come at a premium. Therefore, keep UN stock close to your chest.
One of the most compelling dividend stocks to buy, Welltower (NYSE:WELL) is a real-estate investment trust specializing in senior care. In addition to this critical provision, Welltower brings to the table other highly-demanded services such as post-acute care and outpatient medical solutions. As a result of its diverse portfolio, WELL stock has jumped about 20% year-to-date.
If you follow demographic trends, you’ll recognize very quickly how much potential upside this company has. Earlier this year, I discussed the generational tailwinds that should drive WELL stock higher over the longer-term. Primarily, baby boomers are the largest living generation in the U.S. Logically, as more of these people transition to retirement, they’ll require senior-care services.
Of course, the countering argument against WELL stock is that a majority of Americans are not prepared for retirement. This includes a great number of baby boomers.
Certainly, that’s an issue for WELL stock. But at the same time, an increasing number of millennials support their senior parents or even grandparents. Therefore, in my opinion, the long-haul picture for Welltower remains robust.
Exxon Mobil (XOM)
Historically, Exxon Mobil (NYSE:XOM) has been one of the best stocks to buy, to the chagrin of drivers everywhere. Unlike many other investments, XOM stock is perpetually stuck in an awkward situation. If Exxon Mobil shares rise, it obviously pleases stakeholders. However, the lift also implies that gas prices have spiked, drawing scorn from the public.
Now, XOM stock has another challenge, but one that’s more impactful than road-raging drivers: the advent of electric vehicles. Companies like Tesla (NASDAQ:TSLA) have demonstrated that EVs can transition effectively from conceptual drawings to the production floor. Despite the rumblings in the TSLA share price, Tesla EVs have dominated the California luxury-auto market.
Naturally, this presents a dark cloud over XOM stock. But should stakeholders worry?
They should, but maybe not for a while. Although EV automakers have forwarded profound innovations, it will take time for societies to catch up. For instance, the U.S. transportation network is largely fossil-fuel based. Transitioning this network to an electrical-based infrastructure will probably take decades. That’s why you’re safe with XOM stock for now.
Another high-profile name mired in an awkward circumstance is AbbVie (NASDAQ:ABBV). Ordinarily, top-shelf pharmaceutical specialists experience generally steady market increases due to their critical, and sometimes life-saving products. However, ABBV stock hasn’t been among the best stocks to buy this year; indeed, it’s very much the opposite.
Since January’s opening price, ABBV stock has shed an alarming 25%. What’s more, shares were holding steady between late January until late June. That was when AbbVie’s management team disclosed their intent to buy out Allergan (NYSE:AGN). Investors didn’t like the move, which would balloon the acquiring company’s debt to unsightly levels.
Also weighing on ABBV stock throughout this year is the specter of federal regulation. Specifically, rising drug prices have rankled patients. Aggressively, politicians from both sides of the aisle have directed criticism at drug-makers and our failing healthcare system.
Still, AbbVie has such a broad and viable drug pipeline that I think these issues will eventually fade. Plus, the dividend yield for ABBV stock stands at a remarkable 6.2%.
If you’re looking for high-yielding dividend stocks to buy, telecom giant AT&T (NYSE:T) is a name that comes up often. With a yield of more than 6%, T stock provides a lot of safety buffer, especially if we head into a recession. That said, the company also attracts a lot of criticism.
Even though I’m a fairly recent shareholder, I can’t say that I completely disagree with the naysayers. What comes up most often is that T stock has an extremely heavy debt load. In addition, as our own Vince Martin noted, AT&T is a low-growth entity. At some point, if core financial metrics don’t improve, that lofty dividend may not last.
However, as InvestorPlace contributor Laura Hoy explained, T stock might work out for those willing to exercise patience. For instance, management is focusing on profitability as opposed to market share. And as the 5G rollout becomes an increasing reality, AT&T should experience a sizable demand lift.
Altria Group (MO)
As with AT&T, Altria Group (NYSE:MO) attracts investors for its massive 6.4% dividend yield. But in recent years, MO stock hasn’t really belonged on a list of best dividend stocks to buy. Although Altria — which is most famous for the iconic Marlboro brand — is a vice play, it has one crucial problem: people aren’t smoking like they used to.
That’s especially true for millennials, who have largely shunned the behavior. Logically, this is a huge headwind for MO stock, which explains its volatility. However, what I like here is that management hasn’t given up. They’re going after what millennials do like, and that’s weed.
In the tail end of 2018, Altria made headlines when it invested $1.8 billion in Cronos Group (NASDAQ:CRON). But once was massive optimism has faded this year. Did Altria make a mistake?
I don’t think so. Marijuana firms have suffered because of legal and administrative challenges beyond their control. But once these obstacles fade, cannabis should rise. Therefore, I wouldn’t give up yet on MO stock.
AMC Entertainment (AMC)
If you’re basing your dividend stocks to buy on irrelevancy, AMC Entertainment (NYSE:AMC) would probably jump to the top of the list. When you have streaming companies like Netflix (NASDAQ:NFLX) dominating in-home entertainment, AMC stock seems anachronistic. Also, it doesn’t help that the company’s cineplexes are almost always located in shopping centers, which themselves are fading.
So why gamble on AMC stock, especially since it has lost so much money? Unlike other risky names, I know the pain because my stake isn’t in the black. However, I genuinely believe that the markets are overreacting to bad news. For instance, it’s not the company’s fault that most of this year’s top draws will be released toward the latter end of this year.
Beyond that, AMC stock offers an experience that you can’t replicate in the living room. And relative to other forms of entertainment, the box office is cheap. That’s going to play a major role if the economy stumbles into a recession.
As of this writing, Josh Enomoto is long T stock and AMC stock.