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With the stock market seemingly dropping almost every day lately, investors are concerned and perhaps have become overly negative. It is easy to lose sight of long term goals when the world seems to be full of problems, battling one crisis after another. It often appears that the challenges facing the global economy will never be resolved, but it is important to realize that the world has always had major challenges and economic problems.
In spite of past problems, long term investors have generally done very well, especially those who bought stocks when the markets had just seen a correction and valuations were cheap. Here are several reasons why it makes sense to remain positive on stocks and do some selective bargain hunting, perhaps in some of the names below:
1. The price of oil is dropping. Oil prices were well over $110 earlier this year but have dropped significantly to about $93 per barrel. Lower oil prices reduces manufacturing costs for many companies, it also lowers shipping expenses. Lower prices at the fuel pump helps consumer confidence and spending. The less money consumers spend on gas, the more they have to spend on clothing, entertainment, electronics, and vacations.
2. The markets were able to close above a key support level on the S & P index around 1249. CNBC's Guy Adami points out that: ”The last time the market hit this level the market ricocheted higher and there’s nothing to suggest it can’t happen again, especially if the market gets positive data on Friday,” A CNBC article goes on to say: "Adami thinks another bull signal is emerging. At 1249 we may be looking at a double bottom of the March lows. A double bottom is typically a very bullish sign." See the article here.

3. Stocks are at historically cheap levels: The forward price to earnings ratio for the S & P index is about 12.7. This is far below historical averages.
4. Interest rates are extremely low and likely to stay low for the foreseeable future. Low rates are good for consumers, businesses and the real estate market. Low rates are also good for stocks, and many major companies pay dividends that far exceed what investors can make elsewhere.
5. Many market gurus and analysts believe the markets are set to end the year higher. David Kotok, Chairman & Chief Investment Officer of Cumberland Advisors thinks the market will rally about 15% by year end and says: "We are putting in place a bottom on the stock market," Read that and more on his thoughts here.
Here are a number of stocks that can pay dividends and provide potential gains for investors:
Kraft Foods, Inc. (KFT) is a leading maker of snacks, candy, juices, and many other food products worldwide. This company owns many well known brands such as Oscar Mayer, Maxwell House, Trident, Dentyne, Hollywood, Halls, Jacobs, Nabisco, Oreo, LU and others. Food companies have strong pricing power in times of inflation and food products are always in demand. The dividend at Kraft pays you more than most other investments.

Here are some key points for KFT:
  • Current share price: $34.30
  • The 52 week range is $28.85 to $36.02
  • Earnings estimates for 2011: $2.23 per share
  • Earnings estimates for 2012: $2.50 per share
  • Annual dividend: $1.16 per share which yields 3.3%
Annaly Capital Management, Inc., (NYSE:NLY) is a mortgage real estate investment trust (REIT) company, based in New York. Annaly pays a dividend of about $2.60 annually which is equivalent to a yield of around 14%. This dividend is so generous, it makes sense to have at least some money invested here.
Here are some key points for NLY:
  • Current share price: $17.93
  • The 52 week range is $14.05 to $18.79.
  • Earnings estimates for 2011: $2.53 per share
  • Earnings estimates for 2012: $2.38 per share
  • Annual dividend: $2.60 per share which yields 14.9%
Molson Coors Brewing Company (NYSE:TAP) makes, markets and distributes some of the top beer brands such as Coors Light, Molson, Carling, Pilsner, Keystone Light. The company also brews or distributes products under license from third parties, including major brands like Heineken, Amstel Light, Asahi, Miller Lite, Milwaukee's Best, Foster's and others. Beverage companies are generally very stable even in difficult economic times and this stock looks like a solid value.

Here are some key points for TAP:
  • Current share price: $44.20
  • The 52 week range is $42.50 to $51.11
  • Earnings estimates for 2011: $3.67 per share
  • Earnings estimates for 2012: $3.95 per share
  • Annual dividend: $1.28 per share which yields 2.9%
Merck and Company, Inc. (NYSE:MRK) is a global pharmaceutical giant. Pharmaceutical companies generally have strong pricing power in times of inflation and therefore can raise prices. Pharmaceutical products are in demand even when the economy is weak and this is why investors often seek drug companies as a safe harbor in tough times. This stock has dropped recently and looks like a bargain now.

Here are some key points for MRK:
  • Current share price: $32.70
  • The 52 week range is $30.70 to $37.68
  • Earnings estimates for 2011: $3.74 per share
  • Earnings estimates for 2012: $3.85 per share
  • Annual dividend: $1.52 per share which yields 4.5%
Johnson & Johnson (NYSE:JNJ) is a global maker of health care and medical products. This company owns well known brands such as Listerine, Motrin, Band-aid, Reach, Splenda, Tylenol, Lubriderm, Sudafed and many more. These types of products remain in high demand regardless of the global economic situation and the dividend pays you to wait for better times and stock valuations. This stock has dropped with the market recently and is giving long term investors a solid value.
Here are some key points for JNJ:
  • Current share price: $63.41
  • The 52 week range is $56.9 to $68.05
  • Earnings estimates for 2011: $4.95
  • Earnings estimates for 2012: $5.26
  • Annual dividend: $2.28 per share which yields 3.5%
Chevron Corporation (NYSE:CVX) is one of the largest integrated oil and gas companies worldwide. Chevron is well diversified in the energy sector, generating revenues from many sources including from oil, natural gas, refining, etc. Demand for oil will only rise with a worldwide population increase and even though oil demand may drop in a weak global economy, it is still a must have product. This stock has come off recent highs, but may drop further with the price of oil. It would be a great long term buy under $100 per share.

Here are some key points for CVX:
  • Current share price: $102.76
  • The 52 week range is $70.96 to $109.94
  • Earnings estimates for 2011: $12.99 per share
  • Earnings estimates for 2012: $12.93 per share
  • Annual dividend: $3.12 per share which yields 3%
Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.
Source: 5 Reasons to Stay Positive on Stocks and the Best Dividend Stocks to Buy Now