7 Fundamentally Solid Dividend Stocks to Buy

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dividend stocks - 7 Fundamentally Solid Dividend Stocks to Buy

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Yes, the markets are roaring back and even first-quarter earnings are looking better than expected.

But even as businesses open up and the novel coronavirus fades, we’re not headed back to normalcy quickly. It’s going to take a while.

Also, all measures of performance are in an odd spot. How do you calculate what good earnings are after a complete economic shutdown? It’s all going to be guesswork. And that means volatility.

What you want to have in your portfolio are solid stocks that will be there come what may and pay you a little for owning them. These are long-term positions that offer total returns — dividends and capital gains — not sexy stocks that will rally 6% in a day, then fall 10% and then rally 5%.

The seven fundamentally solid dividend stocks to buy now are screened by my Portfolio Grader I use to find Growth Investor plays and represent some of the best long-term buys in the markets today.

  • Easterly Government Properties (NYSE:DEA)
  • Frontline (NYSE:FRO)
  • Carlyle Group (NYSE:CG)
  • Unum Group (NYSE:UNM)
  • Huntsman (NYSE:HUN)
  • Dominion Energy (NYSE:D)
  • Xerox (NYSE:XRX)

Dividend Stocks: Easterly Government Properties (DEA)

Dividend Stocks: DEA

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Dividend Yield: 3.9%

Easterly Government Properties is a shining example of the kind of stock I’m talking about today.

It’s a real estate investment trust (REIT) that has one of the most reliable tenants in the world — the U.S. government.

It’s based in Washington, D.C. and leases Class A properties to government agencies. DEA operates 72 properties for 32 agencies with nearly 7 million square feet of space.

DEA has been around since 2011, so it’s relatively new in the REIT space. But this is a very unique niche with a serious competitive moat.

Currently it has a solid 3.9% dividend, which shouldn’t be affected by any of the economic issues visited upon the broader economy. The stock is up 50% in the past 12 months, so there’s some significant growth there as well.

Frontline (FRO)

Dividend Stocks: FRO

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Dividend Yield: 17.1%

Frontline is a commodity shipping company that ships dry and wet cargo. That basically means it has ships that will carry iron ore or coal (dry cargo) as well as oil and liquified natural gas (wet cargo). It carries a variety of other products as well.

Shipping is a very cyclical business and that tends to be reflected in its dividend as well.

When the economy is going strong, shipping firms are in demand and the stock rises as the dividend falls. When it gets seasonally slow — usually summer — the dividend rises as the stock falls.

But that cycle has been affected by Covid-19. That’s why FRO stock has a 17.1% dividend right now. But as the global economy comes back online, that dividend will shrink as the stock rises.

This is a seasonally volatile industry, but there’s a lot of upside at this point, and FRO has become a “strong buy” in my stock-picking system in this market. And that huge dividend should keep you happy as growth picks up.

Carlyle Group (CG)

Dividend Stocks: CG

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Dividend Yield: 3.9%

Carlyle Group is an asset management company. That means it uses private investors’ money to run its investment operations. Those include private equity, real estate, global credit and investments.

It has been around since 1987 and has a very blue-chip client list of global leaders and royal families that want a solid place to park their money and get a consistent long-term return.

For the rest of us, we can ride their coattails by owning the company at large.

It has grown from a boutique private firm into a powerful global company with a $9 billion market capitalization. And the entire time it has kept investors’ money safe and productive.

It delivers a healthy 3.9% dividend and the stock is up 24% in the past year.

Unum Group (UNM)

Dividend Stocks: UNM

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Dividend Yield: 6.7%

Unum Group specializes in supplemental insurance benefits. Basically, it offers long-term and short-term disability insurance, as well as group life and accidental death and dismemberment policies. It also owns Colonial Life, which is a health insurance provider.

Insurance is always a corner of the market I like to monitor for Growth Investor plays. This particular company has been operating since 1848, so it has seen global and national events over that time, including some of the biggest market dislocations before the Great Depression.

Currently, it operates mainly in the U.S. and the United Kingdom.

While the job market has shrunk during this period, UNM sits on piles of cash since many of its policies don’t pay out as regularly as broader health insurance companies do. This protects it from some the damage in the markets right now.

The stock has been hammered in recent months, off 35% in the past 3 months, and 53% over the past 12 months. But its dividend is now sitting at a rich 6.7% and given its long track record, there’s little chance it will cut that dividend.

And as the market recovers, the stock will recover as well, making up lost ground quickly.

Huntsman (HUN)

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Dividend Yield: 3.9%

Huntsman is a chemical manufacturer in Texas that focuses on the plastics, automotive and construction industries.

And earlier this month is made 50 tons of hand sanitizer and distributed it to hospitals and pharmacies for free.

It was founded in 1970 by Jon Huntsman and remains a family-run company in its second generation.

The company’s client list reads as a “Who’s Who” of industrial blue-chip players across various industries. And it has made solid in-roads to China and other nations beyond U.S. shores over the years.

This is a cyclical business, so it has suffered in the current environment. It’s off 22% in the past 12 months. But in the past month the stock is up 16%, which shows there are buyers moving in while it’s on sale. It delivers a solid 3.9% dividend.

Dominion Energy (D)

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Dividend Yield: 4.8%

Dominion Energy is a big electric utility that has service operations in Virginia, West Virginia, the Carolinas and Ohio. It also has some operations as far away as Wyoming and Utah.

Dominion also has an unregulated natural gas business, with one of the few liquefied natural gas export terminals in the country, at Cove Point, Maryland. This has enormous potential, not just for Dominion’s own natural gas supplies but collecting fees from other suppliers looking to export their LNG.

It is also investing heavily in renewable energy resources. Its balance between regulated and unregulated businesses allows it to maintain a solid growth rate and dividend, with a growth kicker when times are good.

Right now, it’s a flight-to-safety stock for many, so it isn’t cheap here. But it still delivers a generous 4.8% dividend and is up slightly in the past 12 months. And I’ve got even better growth and income plays for you now.

Xerox (XRX)

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Dividend Yield: 5.6%

Xerox was once so popular and ubiquitous that its name was synonymous with making a copy — as both a noun and a verb. You Xeroxed the report and handed out Xeroxes of that report.

But those days are long behind it. From running the Palo Alto Research Center (PARC) where Steve Jobs got the ideas for a mouse and the graphical user interface for Apple (NASDAQ:AAPL), it failed to keep up with the times and couldn’t take advantage of its own research.

And while it made some efforts to regain its vaulted position, the world of copiers and digital printing wasn’t where the big money was headed.

In 2018, the company was going to allow itself to be sold to Fujifilm (OTCMKTS:FUJIY), but investor Carl Icahn and others stepped in and fought the sale. Late last year it tried a hostile takeover of HP (NYSE:HPQ), but Covid-19 brought an end to that effort.

It still sports a $3.9 billion market cap and has sold off more than 50% in the past year. But with a revived board and management — and Icahn’s backing — there’s still hope it can build a solid company through acquisitions.

The stock has a 5.6% dividend, which is far better than a money market account.

Legacy tech is tricky, though, if what you’re looking for is growth. That’s why I’m looking in a completely different group, where my favorite stock offers both dividends and huge growth opportunities.

The AI Master Key

If artificial intelligence (AI) sounds futuristic, even far-fetched — well, keep in mind, you’re already using it every day. If you’ve ever used Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Assistant or Apple’s (NASDAQ:AAPL) Siri … if you’ve had Netflix (NASDAQ:NFLX) recommend a movie or Zillow (NASDAQ:Z) recommend a house … even an email spam filter … then you’ve used artificial intelligence.

In this new world of AI everywhere, data becomes a hot commodity.

As scientists find even more applications for artificial intelligence — from hospitals to retail to self-driving cars — it’s incredible to imagine how much data will be involved.

To create AI programs in the first place, tech companies must collect vast amounts of data on human decisions. Data is what powers every AI system. As one AI researcher from the University of South Florida puts it, “data is the new oil.”

To cash in, you’ll want the company that makes the “brain” that all AI software needs to function, spot patterns and interpret data.

It’s known as the “Volta Chip” — and it’s what makes the AI revolution possible.

You don’t need to be an AI expert to take part. I’ll tell you everything you need to know, as well as my buy recommendation, in my special report for Growth Investor, The A.I. Master Key. The stock is still under my buy limit price — so you’ll want to sign up now. That way, you can get in while you can still do so cheaply.

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Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


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