Every day it seems like market averages are hitting new highs. That’s certainly comforting in one sense. But it can also be disquieting. The Dow Jones Industrials keeps powering on alongside the S&P 500 and Nasdaq 100, but how long can it continue?
There’s talk of a reckoning. But any drop will be temporary. The markets have been in rally mode since the pandemic began, so now, with vaccines in hand and a plan already in motion to distribute them, isn’t the time for the markets to start worrying.
But it’s still a good time build up on part of your portfolio that likely hasn’t had much attention — total return stocks. These provide both growth and shareholder-friendly dividends. With CDs not paying as much at present, these companies can be a good alternative to sitting on too much cash.
Here are the 7 best dividend stocks on the market today:
- Clorox (NYSE:CLX)
- Cummins (NYSE:CMI)
- BlackRock (NYSE:BLK)
- Bunge (NYSE:BG)
- Kroger (NYSE:KR)
- Texas Instruments (NYSE:TXN)
- Packaging Corp of America (NYSE:PKG)
Think of these stocks as a bank account with slightly more risk, but a lot more upside. Let’s dive in.
Founded in 1913, CLX sold just a single product for more than five decades before beginning to diversify. That’s pretty amazing given that today, no one considers bleach to be a product with that kind of growth potential.
But it was an all-in-one product that came at a time when the U.S. was starting to see the benefits of cleanliness as a public health issue. And not long after its launch the value of disinfectant for the troops in WWI.
Since then, it has become one of those products that every household has a bottle or two around somewhere. And Clorox’s product line now consists of more than a dozen similarly popular brands.
By avoiding adding a lot of food brands to its focused product mix, it can keep margins comfortably high on relatively low-priced products.
CLX is also a dividend aristocrat. That means its dividend has risen every year for more than 25 years. CLX has raised its dividend for more the 40 years in a row.
The stock is up 24% in the past year and boasts a 2.2% dividend. It’s a great value.
If you’ve ever glanced over as a massive pick-up truck has pulled up next to you at a light with a throaty rumble, you may have noticed a badge on that truck stating it’s Cummins diesel powered.
CMI is one of the top diesel engine makers in the US. Since 1919 this company has been making diesel engines for heavy-, medium- and light-duty vehicles as well as other components. It also makes natural gas-powered engines as well.
In 2019, it bought Hydrogenics, a leading hydrogen fuel cell maker. That’s right, CMI is focused on the future and not just its signature diesel powerhouses. This has been a big help as more institutional investors are looking for environmentally friendly alternatives. And trucks and SUVs are the top-selling models for U.S. carmakers.
CMI stock is up 46% in the past year, but it’s still a good value and delivers a 2.2% dividend even after the run.
When you’re the company that the Federal Reserve turns to in a national financial crisis, you must have a good reputation for being able to manage big challenges and solve in a responsible way.
That’s BLK. When the pandemic hit and the Fed and U.S. Treasury needed a company to manage all of the bonds and stocks that the government had bought to prop up the markets, it turned to BLK to build the portfolios and manage the assets.
The thing is, BLK does this for governments, corporations and institutions all around the world. It also offers ETFs for individual investors as well as a variety of money management services.
It’s a class act that has $7.8 trillion of assets under management. And it’s still a good value. The stock is up 37% and delivers a steady 2% dividend.
While none of the stocks here appear on the modern Dow Jones index’s core 30 stocks, that doesn’t mean they aren’t at the heart of U.S. and global production chains.
Bunge was founded in 1818 in New York and is one of the world’s leading agricultural commodity companies. Whether it’s fertilizer, edible oils, wheat, sugar or bioenergy, BG is involved in a big way.
Bunge currently works with more than 70,000 farmers, has 31,000 employees 360 support terminals worldwide. It is putting food on tables all around the world. And a reliable food supply is crucial not only during the pandemic, but afterwards as well.
The stock is up 23% in the past year but trading at a P/E of 20 and delivers a generous 2.9% dividend.
Speaking of food, Kroger is the largest grocery store chain in the U.S. During the pandemic, that created a lot of challenges as well as opportunities for the company. Managing a large employee base during a pandemic was a challenge to say the least. Also working through the logistics of moving food to stores through a vast and complex supply chain is tough on a good day.
What’s more, as stores shut down to bare bones staff, KR had to figure out how to compete on the delivery and pick-up side of the business, a segment it was only slowing moving into.
But this chain started in Ohio in 1883, so it’s seen its fair share of challenges in the markets around the country. It’s a tough, low-margin business and KR has it figured out. It adapted quickly and is back on track.
The stock is up 17% in the past 12 months, yet it’s trading at a P/E of 8.7 — the Dow Jones Industrials’ average P/E is 29. And KR has a 2.2.% dividend.
Texas Instruments (TXN)
During the tech boom over the past year, chip stocks have been front and center. Yet few people hear about Texas Instruments.
Maybe it’s because the demographic that watches financial news only thinks about calculators in the 1970s (although kids still use TIs today in class!). Or maybe it’s because there are cooler names out there. In the Dow Jones 30, there are a number of tech companies and even one chip company, but it’s not TXN.
The fact is, TXN is much more an industrial chipmaker than many of the more popular names. It sticks to building the essential components in a massive array of electronics, but it sticks to analog and embedded processors — the workhorses of tech.
But the fact is, the more electronic devices there are, the more they need analog and embedded processors. It isn’t sexy, but it is an essential part of the tech world.
The stock is up 34% in the past 12 months and has a solid 2.3% dividend. It’s a great long-term tech choice if you don’t want a lot of drama with your tech stocks.
Packaging Corp of America (PKG)
A relative youngster compared to many of the companies here (established in 1959), this company does exactly what it says it does: it makes packaging materials for shipping.
Obviously, this year has certainly been good for PKG. But the fact is, this is a very steady industry all the time, given the fact that the more people there are, the more packages are shipped to help meet consumers’ and commercial needs. It’s not just the boxes and bags that show up on your doorstep. It’s also the crates and boxes that show up in warehouses that are stored until they’re boxed up again and shipped to a consumer or downstream commercial location.
This year, when e-commerce had watershed growth on the consumer side certainly helped business, but business is always solid. This isn’t sexy stuff but it’s important stuff. And PKG is one of the leaders in the business. What’s more, due to its steady nature, PKG offers a 2.8% dividend after a stock run of 33% in the past year.
Disclosure: On the date of publication, Louis Navellier has positions in CLX, BG, KR, and TXN in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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.