Find Saftey in These Top Dividend Aristocrats in This Crappy Market
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In volatile markets like the one we are currently seeing, moving money into strong dividend-paying stocks can protect your nest egg in two ways. Not only are large equity mutual funds rotating money into these "proven" stocks, effectively supporting the stock price, but you get paid to wait for a market recovery.
There are 43 stocks in the popular S&P 500 Dividend Aristocrats index. Here is our view of the top five to own now:
1. The Coca-Cola Company (NYSE: KO) (2.8% Yield). Coke was just added to Goldman's Sachs Conviction Buy list Monday because of its defensive nature in a slow macro environment. They cited: (1) a highly visible, 10% EPS growth outlook; (2) market share momentum in global beverages; and (3) an undemanding valuation (16X NTM P/E), below the historical average (17-18X).
2. Johnson & Johnson (NYSE: JNJ) (3.6% Yield). Brean Murray rates Johnson & Johnson (NYSE: JNJ) a Buy with a $77 price target. The firm believes its time for JNJ to shine. Due to a strong pipeline driving a revenue upswing in pharma, stable MD&D trends, and a trough for consumer sales, Brean Murray sees re-acceleration in its earnings.
3. Wal-Mart Stores Inc. (NYSE: WMT) (2.9% Yield). Where do people shop when money is tight? While the company has been losing foot traffic, this could already be reflected in the stock. Dahlman Rose rates Wal-Mart (NYSE: WMT) at Buy with a $62 price target. The firm notes management has begun feeling the pressure and is turning things around. The company's online segment and the launch of new smaller stores should help drive sales growth in the U.S.
4. Consolidated Edison Inc. (NYSE: ED) (4.5% Yield). With earnings expected to top $3.50 per share, this utility giant has more than enough earnings power to cover its $2.40 yearly dividend. Utilities are always great places to hide in times of market weakness.
5. McDonald's Corp. (NYSE: MCD) (2.9% Yield). McDonald's is growing in good and bad markets. Earlier the fast food giant reported global comps rose 5.1 percent in July, with all key geographies strong. It’s hard to find fault with EPS expected to grow 10 percent or more.
There are 43 stocks in the popular S&P 500 Dividend Aristocrats index. Here is our view of the top five to own now:
1. The Coca-Cola Company (NYSE: KO) (2.8% Yield). Coke was just added to Goldman's Sachs Conviction Buy list Monday because of its defensive nature in a slow macro environment. They cited: (1) a highly visible, 10% EPS growth outlook; (2) market share momentum in global beverages; and (3) an undemanding valuation (16X NTM P/E), below the historical average (17-18X).
2. Johnson & Johnson (NYSE: JNJ) (3.6% Yield). Brean Murray rates Johnson & Johnson (NYSE: JNJ) a Buy with a $77 price target. The firm believes its time for JNJ to shine. Due to a strong pipeline driving a revenue upswing in pharma, stable MD&D trends, and a trough for consumer sales, Brean Murray sees re-acceleration in its earnings.
3. Wal-Mart Stores Inc. (NYSE: WMT) (2.9% Yield). Where do people shop when money is tight? While the company has been losing foot traffic, this could already be reflected in the stock. Dahlman Rose rates Wal-Mart (NYSE: WMT) at Buy with a $62 price target. The firm notes management has begun feeling the pressure and is turning things around. The company's online segment and the launch of new smaller stores should help drive sales growth in the U.S.
4. Consolidated Edison Inc. (NYSE: ED) (4.5% Yield). With earnings expected to top $3.50 per share, this utility giant has more than enough earnings power to cover its $2.40 yearly dividend. Utilities are always great places to hide in times of market weakness.
5. McDonald's Corp. (NYSE: MCD) (2.9% Yield). McDonald's is growing in good and bad markets. Earlier the fast food giant reported global comps rose 5.1 percent in July, with all key geographies strong. It’s hard to find fault with EPS expected to grow 10 percent or more.
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