Here are the best dividend stocks to buy in a risky environment
After the big shock in March, many investors are still
looking for defensive stocks to buy now. Of course, in the most extreme
example, you can elect to go all into cash. However, history has proven that to
be the worst thing to do. Instead, this is a good time to consider dividend
aristocrats.
First, market uncertainty incentivizes stable dividend
stocks to buy now. How so? Passive-income generating companies typically
perform better than high-flying growth names during bearish phases.
For one thing, investors can still collect their payouts
even if their portfolio isn’t doing too well. Moreover, organizations that have
a history of consistent payouts tend to be levered toward secular or otherwise
steady industries.
And there’s no better paragon of stability than dividend
aristocrats. For those who are unfamiliar with the term, dividend aristocrats
have three main requirements: they must be equities traded in the S&P 500,
have 25 years-plus of dividend increases and meet size/liquidity benchmarks.
However, a word of caution. Just because you put dividend
aristocrats in your list of stocks to buy now doesn’t guarantee a smooth ride.
If the markets turn volatile, you can expect virtually all names to incur red
ink.
But the major selling point is magnitude. With dividend
aristocrats, you’re limiting your potential losses due to the robustness of the
target company. Better yet, the volatility provides a rare discount for these
stalwarts of industry.
So with that in mind, here are eight stocks to buy now with
a long track record of payouts:
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