You don’t need the luck of the Irish to find these winners.
Any investor concerned about a long-term diversified portfolio is going to have dividend stocks as central part of the strategy. The universe for dividend stocks is absolutely enormous, but investors have been forced to go further out on the risk curve to find yield, since interest rates have been exceptionally low for many years.
The problem, therefore, is finding dividend stocks that are both quality companies and are not outrageously overvalued. That can be a real challenge, but this month I’ve found five that fit the bill.
One of my all-time favorite hotel REITs in on sale right now, and that’s Ashford Hospitality Trust (NYSE: AHT). The company owns a geographically diverse portfolio of hotels, which is also diversified in terms of service level.
With a hotel REIT, there are two primary issues: management and debt. Ashford has been public for some 10 years, and its CEO has been in the hotel business for over 25 years. That kind of savvy proved to be essential during the financial crisis.
Where many other hotel REITs had to stave off bankruptcy, Ashford cut expenses and retained its liquidity. It constantly refinances its debt and engages in hedges and maturity alterations to keep costs low.
Ashford is trading at only $9.70 per share, and pays a 4.8% dividend.
You certainly have heard of Tupperware Brands Corporation (NYSE: TUP), which has been around forever, and continues to diversify away from those plastic containers that grandma always used.
Tupperware has moved into beauty and personal care products, with 3 million sales agents across the world selling its products. The company is struggling a bit with currency issues, but its core model remains solid. It trades at 13 times earnings, on a long-term projected dividend-adjusted growth rate of 16%. That 4% yield makes it a go-to value play right now.
Realty Income Corporation (NYSE: O) may have set the standard for a REIT that pays on monthly basis, as it has been doing so continuously for 46 years. The company has over 4,000 properties, which it leases to big-time companies like Walgreens (NYSE: WBA), FedEx (NYSE: FDX), Family Dollar (NYSE: FDO) and Regal Cinemas (NYSE: RGC). These are the kind of companies that will pay the rent on time.
There are few REITs with management this good and this focused. They are prudent with their capital allocation and stick to their strategy of diversifying across 35 retail industries. And they obviously do all they can to protect the dividend, which is 4.7% – incredibly high for a REIT with this long a history.
ExxonMobil (NYSE: XOM) is the ultimate energy stock, and the crash in oil prices gives you a chance to jump in to the venerable winner at a 20% discount to its recent highs.
The 3.2% yield is absolutely rock solid. While other energy companies are going to struggle to pay on high-yield junk bonds, ExxonMobil can ride along on its $13 billion in annual free cash flow and stay perfectly solvent.
Retire on Just These Three Stocks
Ian Wyatt has found 3 stocks that pay dividends so big — you can retire on them. The Wall Street Journal calls them, “mega-dividends.” These stocks have a history of consistently RAISING their dividends… quarter after quarter. In fact, one of these cash-cranking companies hiked its dividend 10-fold! So, if these ever-increasing payouts sound good to you… Click here for all the details.