Now that football is back, I’m reminded that defense wins championships.
When we see broad market sell-offs, the best strategy is typically to take a look at tried-and-true dividend investing.
Today, I’ll show you some of the best dividend stocks to buy. One of them has an 8% yield.
Large companies with solid dividends may not give you great stories to tell around the water cooler (if we ever gather around the water cooler again). But they won’t cause you nightmares either.
Legendary trader Stanley Druckenmiller said last week that he has no idea what the market might do in the next few months. However, he thinks it could be tough to make money in the next three to four.
Valuations, especially in tech stocks, are flirting with dot-com bubble levels. And a lot of good news appears to be baked into the price of many of these stocks.
If you are not old enough to remember that episode of market history, the downside potential of a tech wreck is fodder for nightmares.
That can be true in the stock market as well. When we have seen a run like the one since the lows in March, playing defense with dividend stocks makes a lot of sense.
If it will be tough to find gains for a few years, as Druckenmiller suggests, let’s get paid up front.
Looking at mega-cap stocks, the four largest U.S.-based companies have an average dividend yield well over 6%. That is more than three times the yield of the S&P 500 and close to 10 times the minuscule yield of the Nasdaq 100.
Our first dividend stock today has raised its dividend consistently for 36 years…
Most Reliable Dividend Stock Ever
AT&T Inc. (NYSE: T) sounds like a boring old telephone company. The truth is it’s one of the companies leading the way to 5G. It also has a robust entertainment business with Direct TV and Warner Media. COVID-19 has a limited impact on AT&T and may actually give the bottom line a boost.
The real story with AT&T for investors is that the stock is yielding about 7% at the current price. The dividend has been raised every year for 36 years.
You don’t have to lose sleep worrying about what the stock market is doing. The dividend payment will hit your account every quarter. Even if we see a steep market sell-off, we can be pretty sure that AT&T will survive and rally when the market does.
This next dividend stock has raised its dividend consistently for 25 years…
Collect 5% with This Dividend Stock
The second-largest high dividend stock is pharmaceutical giant AbbVie Inc. (NYSE: ABBV).
In addition to its already formidable line up of drugs, AbbVie completed a $63 billion acquisition of Allergan in May, adding Botox and other blockbuster beauty drugs to the roster.
I am an advocate of one simple fact when it comes to investing in a financial crisis: There is always money in vanity. So, I expect that Botox demand – and the related cash flow of the increasingly popular treatment – to remain solid over the decade ahead.
AbbVie is also one of the companies working on a coronavirus vaccine, so that could provide a catalyst for a big move higher.
The stock is yielding over 5% at the current price. The payout has been hiked every year for more than 25 years.
Our next one has hiked its dividend consistently for just as long, but it pays a little more…
High-Yield Tech Dividend Stock
International Business Machines Corp. (NYSE: IBM) is often thought of as your grandfather’s tech stock. It has been there, done that, and been around forever.
That’s kind of the point. When we buy high-dividend stocks in times of confusion, we want to own companies that will still be there when the dust settles. Just like with AbbVie and AT&T, no matter what’s happening in the world, that dividend check is going to hit the account every quarter.
It is also worth mentioning that with the acquisition of RedHat, IBM became a leader in open-source computing, and the business is growing like crazy.
What if I told you IBM expects to have a functioning quantum processor with more than 1,000 qubits (apparently that’s a lot) by the end of 2023?
IBM has a lot of exciting things going on, but more importantly, the stock yields 5.34%.
IBM has also raised the payout every year for more than 25 years.
Now, here’s our best dividend stock today with an 8% yield…
Best Dividend Stock to Buy Today
Finally, we have the dividend King.
Altria Group Inc. (NYSE: MO) is in the cigarette business, and the biggest knock on the company is that people are quitting the habit.
While that may be true, people are also vaping and looking for lower-risk alternatives, like heated tobacco products. Altria also happens to own the most dominant brands in what’s left of the cigarette business.
And if you don’t think Altria has plans in place to be a major player when cannabis becomes legal on a federal level, I am pretty sure you are badly mistaken.
The stock yields 8% right now, which is competitive with the highly touted S&P 500 Index fund’s long-term return.
Altria has raised its dividend every year for 51 years now.
It is hard to say what the stock market might do for the rest of the year or into 2021.
After a lightning-fast rise of over 50% off the lows and the economy still struggling, it makes sense to bring the defense on the field. High quality, high dividend stocks are the defense.
— Garrett Baldwin