In the past two months, investors have been reminded of a valuable lesson: stocks may also fall. Both the Dow Jones Industrial Average and the broad-based Standard & Poor’s 500 Index are in a consolidating state, at least 10% below their recent highs, and set a record for the biggest single-day drop in history.
Market disappoints you? Consider dividend stocks.
However, investment strategies to deal with the stock market decline do exist. One of the most successful strategies is the idea of buying high-quality dividend stocks.
Dividend companies provide investors with three major advantages. First of all, they serve as a beacon of profit. In other words, if the board does not foresee sustained growth and/or profitability, then no company will continue to share a certain percentage of profits with investors. Second, the dividends received are a bit of a downside risk that hedge investors may face during corrections and bear markets.
Finally, dividends can be reinvested back into more dividends to pay for stocks to accelerate the creation of wealth. You can use your broker directly or use a dividend reinvestment plan or DRIP. This is how fund managers create wealth for their customers.
In a perfect world, investors want to get the most income from dividends, with minimal risk. Of course, high dividend yields are not necessarily a good sign. Because the rate of return is a function of the stock price, a company that is falling quickly or a business model in trouble may be attracting investors’ unsuspecting profits. Finding high-quality, high-yielding dividend stocks requires a lot of excavation and due diligence – but rewards can be significant.
These high-yield stocks do not care about the stock market correction
Since the stock market hit a record high at the end of January, the following three high-yield dividend stocks reversed the trend and pushed up.
Top Dividend Stocks To Buy For 2018: GlaxoSmithKline
For investors, one of the best performing high-yield stocks in this adjustment is GlaxoSmithKline (NYSE:GSK), a large drug developer. Although health care stocks may have a tendency to synchronize with the market, they are usually inelastic. We can’t choose when we get sick or what diseases happen. This creates a steady stream of revenue opportunities for pharmaceutical and biotech companies.
GlaxoSmithKline’s yield of 7% seems to have benefited from last week’s announcement that it will acquire Novartis’ share in its consumer health joint venture for $13 billion. The transaction is expected to increase its 2018 earnings and improve cash flow. More importantly, GlaxoSmithKline chose to deploy cash internally instead of chasing Pfizer’s expensive over-the-counter business. To make a long story short, Wall Street and investors seem to agree.
Top Dividend Stocks To Buy For 2018: Macy’s
The department store Macy’s (NYSE: M) may be compared to the 2017 dinosaurs, but its 5.3% return this year has found a new life.
Macy’s management understands that in order to compete with e-commerce retail giants, it needs to cut costs and transform business, and its fourth-quarter results released in February show this. The same-store sales growth of 1.3% in the fourth quarter was much higher than expected, and the 20-18 same-store sales growth forecast of 0% to 1% was a noteworthy surprise, indicating that the company is focused on getting the right goods in its department stores.
Macy’s recently benefited from rumors that Donald Trump might follow the online tycoon Amazon.com website (which is the rumor that the president believes that there is insufficient tax payment). Since Amazon represents a major slowdown in the transition of Messi, anything that slows its growth will be seen as a positive one. Messi’s income is only nine times its expected earnings, and may still be on sale.
Top Dividend Stocks To Buy For 2018: Seagate Technology
A few high-yielding technology companies opposed the stock market correction. Seagate Technology (Nasdaq: STX) currently operates at a yield of 4.3%, with strong growth in data storage requirements and strong growth in the second quarter. In particular, Seagate pointed out that the average capacity of each hard disk drive increased from 1.7TB to 2.2TB in the second quarter of 2018. This increase in capacity helps reduce Seagate’s operating expenses while meeting the growing demand for enterprise data centers.