Focus on Dividends

August 21, 2020

Should You Buy Target (TGT) Stock?

In 2017, Target (ticker: TGT) announced it would invest $7 billion over three years to "adapt to rapidly evolving guest preferences."

Target positioned this investment to improve customer shopping. We're in 2020 now, three years later, and "the investment has been proven to create an incredible upside," says Scott San Emeterio, CEO of BallStreet Trading in New York City.

The retail giant's 2017 initiative was essentially a euphemism for investing in its e-commerce operations to combat Amazon.com (AMZN) in the digital retail sales and delivery space.

Target's digital offerings during the global health crisis puts it on par with Walmart (WMT) and Amazon, San Emeterio says, and the company has the numbers to show for it.

Target released its second-quarter results in August and reported overall sales growth of 24.3%, compared with last year.

"(It's) the strongest the company has ever reported," according to the company's earnings report, with digital sales increasing by nearly 200%.

That said, the Minneapolis-based big-box retailer still faces an extremely tough, slug-it-out operating environment, competing directly against the likes of Macy's (M), Kohl's (KSS), Walmart and Best Buy (BBY), as well as digital sales giant Amazon. While its recent earnings report illustrated just how well Target's investments in e-commerce are faring, the company is still feeling the effects of the global pandemic on its bottom line.

How have Target's efforts panned out, and where is the company headed from here? What can investors expect from retail's sleeping giant? Let's take a look:

August 20, 2020

8 Dividend Stocks That Look Too Generous

These high-yield dividend stocks could be in trouble thanks to the coronavirus

With interest rates near zero, many investors are turning to dividend stocks for income. And for some investors, the higher the yield, the better.

But it’s important to remember that in the equity market, just as in the bond market, higher yield usually means higher risk. The biggest risk is a dividend cut, which usually provides the proverbial double whammy.

After all, not only does the payout get reduced, but capital usually is lost as well. Investors in widely held names like General Electric (NYSE:GE) and Anheuser-Busch InBev (NYSE:BUD), to name just two, have learned that lesson in recent years.

It’s not just a reduced dividend that can cause problems. Cash returned to shareholders can’t be used to invest behind the business or pay down debt. For some firms, then, a focus on growing or even maintaining a dividend can have a deleterious impact on growth.

The broad point is that an investor shouldn’t be choosing a stock for its dividend alone. Nor should they see the payout as “free money.” Dividend stocks have their use, but a high dividend on its own doesn’t make a bull case. In fact, for some firms, the dividend can create risks of its own, as is the case for these eight dividend stocks:

August 19, 2020

3 High-Dividend Stocks For Your Retirement Portfolio

It's finally here.

Retirement has arrived, and it's time to look forward to traveling, spending time with the grandkids, and all the things you have been dreaming of doing.

You have worked, scrimped, saved, and invested for a long time to get to this day.

Now you need to set your portfolio up to provide a steady, consistent stream of income.

In years past, you might have been talking to your banker about certificates of deposit or visiting with a local broker to discuss tax-free bonds, but in today's zero interest rate world, that's no longer an option.

You need income to fund your dreams, and your best option is the stock market. Fortunately, high-yield dividend stocks are out there, even in this pandemic-ravaged economy.

The strategy here is to find high dividend-paying stocks in companies you can depend on to make the payments regularly and increase that payment over time. You do not want to lose so much as a minute's sleep worrying about having income coming into your account, which is exactly why you don't want to buy just any old stock with a high yield.

And I'm going to show you exactly how to find these reliable dividends.

Let's look at a few of the best retirement dividend stocks.

August 17, 2020

3 Surging Tech Stocks to Buy Now for Both Growth and Dividends

Stocks surged Wednesday, after slipping to start the week, with the tech-heavy Nasdaq up above 11,000 once again. The mid-week gains were once again driven by the tech titans, including Apple AAPL, Amazon AMZN, and Microsoft MSFT.

Tesla TSLA also soared after it announced a 5-for-1 stock split to help make its shares more attractive to a wider range of investors—Apple announced a split at the end of July. Advanced Micro Devices AMD, Nvidia NVDA, and other recent tech standouts jumped as well.

The positivity marks the extension of the technology sector’s massive run off the market’s March bottom, as the tech space proves increasingly resilient to the coronavirus economic downturn. Wall Street has also been pleased with the better-than-expected second quarter earnings results, along with the improving third quarter outlook.

In recent weeks, there have been more calls about a transition out of tech into undervalued cyclicals, such as travel and leisure, financials, and energy. The move into some of those areas could pay off for investors and it’s a bet on the continued reopening of the economy, as people, businesses, and Wall Street learn to live with the coronavirus.

There are some legitimate valuation concerns on the tech front. But with the don’t fight the Fed mantra etched into the market, cyclicals could start to climb without causing a major tech pullback.

Yet now might be time to be a bit more selective when it comes to buying tech stocks. So today we look at three tech stocks that pay a dividend and are poised to grow during the pandemic and beyond…

August 16, 2020

Buy Verizon for Value and Income

The stock trades with a low price-earnings ratio and offers a yield over 4%. Total returns could reach almost 19% from the current price

The S&P 500 has surged nearly 18% over the past three months, approaching a new all-time high. This has caused the price-earnings ratio for the S&P 500 to cross north of 29 as I write this, which is more than twice the median average of the index since its inception. At the same time, the dividend yield has shrunk below 1.8%.

Finding value and income remains elusive in the current market, but there are stocks that offer the best of both worlds. One name that remains my favorite is Verizon Communications Inc. (NYSE:VZ).

Verizon, which remains the number one phone carrier in the country, trades with a price-earnings ratio that is below its 10-year average and with a yield of more than 4%. Let's look closer at the company to see why it is a solid buy for investors looking for value and income.

Quarterly highlights

Verizon reported second-quarter earnings results on July 24. Revenue declined slightly more than 5% to $30.5 billion, but came in $455 million ahead of what Wall Street analysts had been expecting. Adjusted earnings per share were lower by 5 cents, or 4.1%, to $1.18. Earnings per share results were 3 cents above estimates.

August 14, 2020

Retirement Savers: 3 Dividend Stocks To Boost Fixed-Income

It's never too late to start saving for your retirement. But if you’re just starting to invest for your golden years, the biggest challenge you will face is how to build a portfolio that will help support you well enough when you do begin your post-work life.

During the past decade, interest rates have remained low, which has deprived savers of low-risk investment opportunities. The yield on the US 10-year Treasury note, for example, is less than 1% these days.

The reality in this perpetually low-interest-rate environment is that retirees need to have a good chunk of their portfolio tied to stocks to earn higher total returns. Conservative investors who don’t want to add too much risk to their portfolios will need to identify good quality stocks that have the ability to recover from downturns and still continue to provide regular income.

We've selected three dividend stocks worth reviewing which, in the past, have outpaced inflation and provided reasonable returns over the long term.

August 13, 2020

7 Super Stable Dividend Stocks to Buy Now

Prepare for the next bear market with these super safe dividend stocks

It’s been a long few months for the market as COVID-19 worries have taken the main stage.

Before things tanked, the stock market, as measured by the S&P 500, was up 15% just since October. Some sectors of the economy, like software-as-a-service stocks, were up much more than that. However, those days are over and many investors are looking for a safe harbor.

Even as the markets make their way back, there are lots of people who are understandably gunshy.

One way to deal with this uncertainty is to move into safer dividend stocks. This way, you still have exposure to the stock market as prices begin to recover.

On the other hand, if the market takes another tumble, these defensive names should fall much less than the overall market. Regardless of whatever may come, they’ll kick out a steady income stream that helps buffer your portfolio from market volatility.

August 11, 2020

7 Monthly Dividend Stocks That Will Support Your Retirement

These seven monthly dividend stocks are good values today

It’s no secret that interest rates are slumping. Many banks offer no return on savings accounts nowadays. Even certificates of deposits and government bonds often yield 1% or less in today’s environment. With that in mind, investors are looking to other types of assets to fill the income gap. Monthly dividend stocks are one appealing option. With a nice mix of them, income comes in regularly, offering an ideal paycheck substitute. And many generate yields far higher than fixed income.

Before loading up a portfolio full of monthly dividend stocks, however, do consider this. The dividend stock space tends to be full of small companies with more limited operating histories and less robust financial pictures. The March market collapse was difficult on monthly dividend companies; quite a few either cut or eliminated their dividends.

As such, a prospective investor should consider their investments in the monthly dividend arena closely. The good news, though, is that many monthly dividend companies have continued to prosper despite the novel coronavirus. These seven monthly dividend stocks offer investors a strong income stream today and the possibility of significant capital gains going forward:

August 10, 2020

Why I’m Banking on Exxon Mobil Corporation’s 8.1% Dividend Yield

Can You Really Trust Exxon Mobil Corporation’s 8.1% Dividend?

The COVID-19 pandemic has hammered many businesses. But some businesses have suffered worse than others.

Case in point: Exxon Mobil Corporation (NYSE:XOM). Commodity prices plunged after government lockdowns ground economic activity to a halt. As a result, the energy giant just posted some of the worst financial results in its history.

The company’s drilling business? Profit warning. Exxon’s refining operations? Struggling. The chemicals division? In disarray.

So it’s no surprise to see some analysts questioning the sustainably of Exxon’s dividend. And with a yield approaching 8.1%, it’s clear that some investors on Wall Street don’t trust the payout. Let’s dive into the numbers.

At first glance, you might assume that Exxon Mobil Corporation’s dividend is toast.

The company reported a second-quarter earnings loss of $1.1 billion, the biggest earnings deficit in the firm’s history. The second-quarter release also presented Exxon’s first consecutive quarterly loss in more than 30 years. (Source: “ExxonMobil Reports Results for Second Quarter 2020,” Exxon Mobil Corporation, July 31, 2020.)

Even a rookie financial analyst can see the problem here.

August 9, 2020

3 “Strong Buy” Dividend Stocks Yielding 5% — Or More

Wall Street pros have been taking a careful look of the stock markets in light of the recent gains. The S&P 500 was up 5.5% by the end of July, and the gains have continued into August.

CFRA strategist Sam Stovall sees conditions as overbought, and believes that investors are in for a shock between now and the end of September – in the form of a 5% to 10% sell-off.

Stovall cites a number of factors to support his contention that we’re on the verge of a market cliff, including “tech and large-cap dominance, the concerns surrounding soaring gold prices, the falling dollar, [and] historically low interest rates…” Stovall looks back at his 35 years’ experience on Wall Street, and notes that he typically sees the S&P average drop 1% in August. 2020 is hardly a typical year, however, and Stovall believes the downward pressures will be correspondingly greater.

The upshot is, while increased volatility is almost certainly going to stay with us for a while, it’s time to consider defensive stocks. And that will bring us to dividends. By providing a steady income stream, no matter what the market conditions, a reliable dividend stock provides a pad for your investment portfolio when the share stop appreciating.

With this in mind, we’ve used the TipRanks database to pull up three dividend stocks yielding 5% or more, with a Strong Buy consensus rating and over 20% upside potential.

August 7, 2020

The Best Dividend Stocks to Buy in 9 Sectors

Get a mix of passive income and capital gains from these relevant companies

Although some folks on Wall Street may deny it, I believe there’s overwhelming evidence of a disconnect between investment market valuations and the real economy. Still, that doesn’t mean you can’t profit from the irrational enthusiasm. Better to go with the train than against it. However, at some point, the ride will likely end. When it does, you’ll be glad to have owned dividend stocks.

Sure, these investments aren’t as sexy as the growth names that have generated wild headlines and even wilder performance metrics. However, the mania is reminiscent of the late 1990s/early 2000s dot-com bubble. At the time, merely mentioning the word “internet” aroused intense buyer sentiment. However, the fundamentals came around and rudely ended the party. The same can happen here, which is why you should consider dividend stocks.

With scheduled payouts along with the possibility of capital gains, dividend stocks provide some measure of confidence in this uncertainty. As well, companies that pay dividends tend to be fiscally stable – after all, the passive income must come from somewhere. Therefore, should volatility impact the broader markets, these organizations usually mitigate the storm better than growth firms.

As you dive deeper into the details of this novel coronavirus-driven crisis, the case for dividends only gets stronger. With Congress deadlocked on another round of coronavirus relief, millions of Americans face a bleak future. For instance, eviction moratoriums have expired in several areas, possibly forcing countless shell-shocked households onto the streets.

Also, the expiration of the federal program designed to bolster state unemployment checks – the so-called “plus up” – puts millions of others in dire straits. For our elected officials, saving the American people should be a no-brainer. But because we’re going to play politics until everyone dies, here are nine dividend stocks to consider:

August 6, 2020

20 Dividend Stocks to Fund 20 Years of Retirement

Each of these high-quality dividend stocks yields roughly 4%, and you can expect them to grow their payouts even more. That's a powerful 1-2 combo for retirement income.

The traditional retirement wisdom used to be the "4% rule." You would withdraw 4% of your savings in the first year of retirement, followed by "pay raises" in each subsequent year to account for inflation. The idea? If you're invested in a mix of dividend stocks, bonds and even a few growth equities, your money should last across a 30-year retirement.

But today's world is different. Interest rates and bond yields have been driven into the ground, reducing future expected returns. Exacerbating the problem: Americans are living longer than ever before.

If you're wondering how to retire without facing the uncomfortable decision of what securities to sell, or questioning whether you are at risk of outliving your savings, wonder no more. You can lean on the cash from dividend stocks to fund a substantial portion of your retirement. Indeed, Simply Safe Dividends has even provided an in-depth guide about living on dividends in retirement.

Many companies in the market yield 4% or more. And if you rely on solid dividend stocks for that 4% annually, you won't have to worry as much about the market’s unpredictable fluctuations. Better still, because you likely won't have to eat away at your nest egg as much, you'll have a better chance of leaving your heirs with a sizable portfolio when the time comes.

Here are 20 high-quality dividend stocks, yielding on average well above 4%, that should fund at least 20 years of retirement, if not more. Each has paid uninterrupted dividends for more than two decades, has a fundamentally secure payout and has the potential to collectively grow its dividends to protect investors' purchasing power over time.

August 5, 2020

3 Big Dividend Stocks Yielding Over 8%; Raymond James Says ‘Buy’

Investment firm Raymond James has released its July performance recap, summing up the fourth month of the economic recovery. The firm notes that the early weeks of this recovery cycle showed a V-shaped turnaround for the economy, which has since slowed, taking a “treading water” patter. Raymond James sees defensive stock plays in a strong position, as they have somewhat outperformed since the second week of June.

Raymond James strategist Tavis McCourt sees the slowing pattern as predictable, and linked to the pace of Congressional action on recovery stimulus packages. McCourt writes, “With D.C. negotiating another package, it is likely that high frequency economic data will decelerate in early August before another round of stimulus is signed, but the market clearly believes the likelihood is that more direct support at similar scale is likely through the election.”

This makes defensive stocks part of a consistent strategy, to keep returns coming in for reinvestment. With this in mind, we used TipRanks database to pull up the stats on three stocks that Raymond James analysts have tapped as buying propositions. These are stocks with a specific set of clear attributes, that frequently indicate a strong defensive profile: a high dividend yield -- over 8%; and a considerable upside potential.