8 Stocks to Buy Offering Both Dividends and Growth

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stocks to buy - 8 Stocks to Buy Offering Both Dividends and Growth

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At this juncture, dividend stocks to buy have unusually strong appeal. Currently, we’re dealing with a U.S.-China trade war that is again escalating, with the White House rumored to be considering de-listing Chinese companies from U.S.-based exchanges. Moreover, we have global economic concerns in addition to deteriorating conditions in the Middle East.

However, offering payouts isn’t enough for many investors. While a stable dividend can protect against downside risk, or mitigate the pain if volatility occurs, arguably most people consider stocks to buy for capital gains. After all, if mere protection was the end goal, investors can elect the long-term track record of government bonds. In fact, Neil George, editor of Profitable Investing, has quite literally written the book on income investing, Income for Life: 65 Income Streams Anyone Can Collect.

Fortunately for those who want their cake and eat it too, there are dividend-bearing stocks to buy that also offer a growth narrative. While several of these names tend to do one better than the other, these hybrid investments can offer stability for your portfolio, especially during periods of uncertainty.

With that, here are eight stocks to buy that offer a mix of dividends and growth.

Microsoft (MSFT)

Microsoft Stock  
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If you’re looking for dividend stocks to buy that also have strong growth potential, Microsoft (NASDAQ:MSFT) is a safe bet. You might call it a lazy pick, but frankly, I don’t care. As an iconic consumer technology giant with disruptive flair, MSFT stock will likely remain relevant for years to come.

Based on consensus estimates, Microsoft has a growth estimate of 13.4% for next year. Additionally, growth for the next five years is forecasted to be 14.5% per annum. Although the current dividend yield is nothing to write home about at just under 1.5%, it’s still better than many tech firms offer. Plus, with consistently positive free cash flow, the payout is easily sustainable.

But what I really dig about MSFT stock as one of the hybrid growth and dividend stocks to buy is the underlying company’s indispensable nature. It dominates the PC operating system, which is still a viable, professional market. Moreover, its strong venture into the cloud with the Azure platform ensures we’re going to be talking about MSFT stock for quite some time.

International Business Machines (IBM)

IBM
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As a robust candidate for dividend stocks to buy, International Business Machines (NYSE:IBM) may only raise a few eyebrows. But as a growth name? Admittedly, that’s where IBM stock may draw many snickers. Based on the current price point, “Big Blue” hasn’t gone anywhere since early this decade.

On paper as well, IBM stock doesn’t generate much excitement. Covering analysts project the growth estimate for next year as 4.9%. Over the next five years, we’re possibly looking at 2.2% per annum. Again, IBM lags in the growth narrative. However, it currently pays out a dividend yield of 4.5%, which isn’t chump change.

That sort of yield is what Neil’s Income for Life book wants to help ordinary investors acheive, whether they’re looking for additional streams of income or a fully-capable source of consistent revenues.

Now, I’m not here to question the consensus growth picture. However, I am optimistic than most about the longer-term prospects of IBM stock. Specifically, I think the markets are downplaying the importance of the company’s Red Hat acquisition. With it, it can drive hybrid cloud solutions that feature a mix of on-premise and cloud network functions.

Dollar General (DG)

Dollar General (DG)
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Under a decisively robust economy, Dollar General (NYSE:DG) may not make much sense. With unemployment near all-time record lows, consumers don’t have the incentive to go bottom barrel with their shopping. However, the August jobs report was disappointing. Further, the ongoing U.S.-China trade war, along with other global economic risks suddenly make DG stock quite interesting.

In late August, Dollar General, along with rival Dollar Tree (NASDAQ:DLTR) produced strong results for their respective quarterly earnings reports. Currently, covering analysts are projecting growth estimate for next year to hit 11.5%. They’re also forecasting 10.5% growth over the next five years per annum.

Unfortunately, the one major knock against DG stock is that it only has a dividend yield of 0.80%. Nevertheless, Dollar General is one of the stocks to buy for likely growth with some modest passive income protection. And look at it this way: neither Dollar Tree nor Ollie’s Bargain Outlet (NASDAQ:OLLI) pays out anything.

Lockheed Martin (LMT)

Lockheed Martin
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Given increasing geopolitical tensions, Lockheed Martin (NYSE:LMT) is a smart bet among stocks to buy. Not only do you have growth potential for obvious national security demand, but Lockheed also pays a dividend. Granted, it’s not the greatest yield at 2.3%. However, recent developments have made LMT stock worryingly relevant.

I say this because of the terrifying prospects of hypersonic missiles. According to The New York Times, hypersonic missiles can travel at more than 15 times the speed of sound. Presently, we do not have a defense system that can stop this threat. About the only thing we can do is apply the principle of mutually assured destruction: we develop them so that no one else will think about launching them at us.

Fortunately, Lockheed Martin is at the frontline of our hypersonic missile efforts. In August, the company won a contract to develop the weapons system for this next-generation missile. Moreover, we can expect the federal government to continue fattening Lockheed’s wallet: this is an area in which we cannot afford to come in second place. Therefore, keep LMT stock on your short list of growth and dividend stocks to buy.

Some of Neil’s winners in his income portfolio include:

  • 500% gain in Microsoft
  • 346% in Nestle
  • 450% in NextEra Energy
  • 302% in Dominion Energy
  • 329% in BCE Inc.

Claim your free copy of George’s Income for Life here.

Delta Air Lines (DAL)

Delta (DAL)
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Among growth stocks to buy that also provide relatively generous payouts, Delta Air Lines (NYSE:DAL) checks off many boxes. But I’ll be frank: DAL stock is risky at this juncture. Therefore, the fact that on paper, it does both capital returns and passive income so well may be a liability.

That said, I’ll lay out the opportunity for your consideration. According to covering analysts, Delta may hit a growth rate of 5.1% next year. Over the next five years, analysts project robust growth of 14.1% per annum. For comparison, in the previous five years, the growth rate was only 9.2% per annum. Obviously, this bodes well for DAL stock if the economy holds up.

Unfortunately, that’s a big if. We all know from the last recession that the downturn hit investments like DAL hard. However, the airliner industry has learned to make their products more efficient; in other words, they cram you into the airplanes like sardines. That newfound skill may help them navigate future turbulent air.

Wheaton Precious Metals (WPM)

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Anything involving precious metals is bound to have some speculative risks. Nevertheless, I’m very much digging established mining companies like Wheaton Precious Metals (NYSE:WPM). Technically, WPM stock isn’t a mining investment, but rather, a streaming one. That means Wheaton gets a cut of the production of the mines it invests in. Under this arrangement, WPM should experience reduced volatility compared to other commodities-based stocks to buy.

More importantly, WPM stock is a comprehensive investment. Covering analysts project next year’s growth estimate at nearly 36%. Plus, they forecast 14.1% growth over the next five years per annum. That compares very favorably to the near 6% losses seen per annum in the past five years.

I concede that Wheaton’s dividend yield of less than 1.4% isn’t exactly going to make you quit your day job. However, with so much uncertainty clouding our economy and monetary policy, gold and silver are likely to rise. And that translates to strong capital returns for WPM stock, along with some passive income.

AMC Entertainment (AMC)

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If you look at the equity performance of AMC Entertainment (NYSE:AMC), you won’t see much growth happening. According to critics, AMC stock faces a tough industry transition. Never before have consumers enjoyed so many options for entertainment. Therefore, plowing into the cineplex industry seems a gamble.

And I’m going to be completely frank: it absolutely is a gamble. However, there are a couple of components that make AMC stock very interesting. First, the company pays out a generous 7.4% dividend yield. Of course, such a high payout is often a warning about the stability or viability of the target investment. But in this case, I believe the criticisms are somewhat exaggerated.

Yes, options like streaming certainly compete with cineplexes. But in a world where it costs an arm and a leg to attend an NFL game, the box office offers cheap entertainment for the whole family. Further, if we hit a recession, Hollywood tends to do well because it offers escapism at reasonable prices. Thus, don’t overlook AMC among your stocks to buy.

GameStop (GME)

GameStop Stock: Is The Tide Turning For GME Stock?
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Usually for my stories regarding stocks to buy, I like to put a speculative name at the tail end. And boy, do I have a wild one for you.

Not too long ago, short-seller Michael Burry of “The Big Short” fame announced he was going long this time. That in itself raised some eyebrows. But the company he was targeting, GameStop (NYSE:GME), made people wonder if Burry lost his mind.

Although I’m a big fan of “The Big Short” along with the genius that is Burry, I must admit this: the critics were well within their right to question his call. Just look at the stats for GME stock. Shares have lost nearly 56% this year. Additionally, GME has a dividend yield of more than 27%. That’s a larger yield than the profit magnitude of many growth stocks to buy!

However, I like to believe that there’s a method to Burry’s madness. With GME stock, most analysts may be overstating the influence of online gaming platforms. Moreover, they may also be dismissing the fundamental value of GameStop; that is, a quick and easy way to buy second-hand games for cheap.

By no means is GME stock a sure bet. However, it is the ultimate contrarian bet for the exceptionally risk-tolerant investor.

Neil George, also affectionately known as “Professor Income,” started as a finance researcher and asset manager at Marrill Lynch. Soon after, Neil began managing a fixed-income fund worth more than a billion dollars. What he discovered is that he would rather help Main Street get rich than see another Wall Street hotshot make another million.

Some of his suggestions include the following:

  • Setting up a perpetual income stream dubbed a “money ladder”
  • Issue “micro-loans” and earn as much as 10% back.
  • Piggyback on Canadian social security to earn up to $2570, even if you don’t live in Canada!

If you’re ready to hear what Neil’s secret to passive and active income investing is, you can read his book — Income for Life — and it costs absolutely nothing aside from your time.

As of this writing, Josh Enomoto is long gold and silver bullion and AMC stock.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.


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