Seeking Alpha
Value, growth at reasonable price, deep value, contrarian
Profile| Send Message|
( followers)  
Everyone loves a bargain and with all the volatility currently evident in the markets, more investors are turning to dividend stocks. September is historically one of the toughest months for the market. When you combine that with a number of potential events such as the increasing risk of a global recession or a possible debt default or banking collapse coming from Europe, chances are fairly high for more major market drops. It makes sense to have cash ready and prepare for some bad days in the coming weeks.
One specific high risk event for the market will likely occur on September 7, 2011. This is when Germany's highest court will rule on whether the German government is breaking the law by funding bailouts of other European countries. While it is not expected to rule against the bailout, any surprise verdict could be very troubling and it does show the growing opposition to future bailouts. You can read more on the German court ruling here. Another big issue is whether more countries will ask for collateral for bailout loans from countries like Greece. Finland is asking for collateral and now other countries want the same. If this new demand kills the current bailout plan, the markets will be a tough place to be. Read more about Finland demanding collateral here. One thing investors can expect is volatility and that means potential buying opportunities. Here are some high quality dividend stocks to consider if the markets correct in the next few weeks:

Merck and Company, Inc. (NYSE:MRK) is a global pharmaceutical giant. 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 from recent highs of about $36. It dipped to around $30.50 recently, and it could test that level again soon in any market pullbacks.

Here are some key points for MRK:
  • Current share price: $32.90
  • The 52 week range is $29.47 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 4.6%
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 14.8%. Around August 8th, NLY dropped to about $16.50, I am ready to buy if it tests that level again soon.

Here are some key points for NLY:
  • Current share price: $17.42
  • 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 14.4%
Intel Corporation (NASDAQ:INTC) is a leading maker of chips used in notebooks, netbooks, desktops, mobile phones, consumer electronics devices, etc. Many investors are waiting for a further drop in tech stocks since they historically bottom out in the 3rd or 4th week of September. Piper Jaffray thinks the chip makers could warn or miss and in a recent Barrons.com article it states: “We would expect companies that gave normal seasonal guidance to report weak results or miss estimates,”. Read more here. If Intel warns or misses estimates, there could be a much better short term buying opportunity coming soon.

Here are some key points for INTC:
  • Current share price: $19.99
  • The 52 week range is $17.60 to $23.96
  • Earnings estimates for 2011: $2.38 per share
  • Earnings estimates for 2012: $2.50 per share
  • Annual dividend: 84 cents per share which yields 4.2%
Amerigas Partners, LP (NYSE:APU) is a leading distributor of propane gas in the United States. This company distributes propane gas to about 1.3 million residential, commercial and other customers through a nationwide network of distribution points. This stock offers a generous dividend. These shares dipped to about $38 in early August; if it drops to that level again it would be a solid buying opportunity.

Here are some key points for APU:
  • Current share price: $42.95
  • The 52 week range is $36.76 to $51.50
  • Earnings estimates for 2011: $2.97 per share
  • Earnings estimates for 2012: $3.03 per share
  • Annual dividend: $2.96 per share which yields 6.8%
National Grid (NYSE:NGG) operates an electricity transmission network in England, Scotland, Wales, and the Eastern United States. They also operate a gas national transmission system in Great Britain, and storage facilities for liquefied natural gas amongst other things. This company pays a very generous dividend and can raise prices as inflation rises in the future. In early August, NGG shares fell to the $46 range and a retest of that level could be coming especially if problems in Europe get worse.

Here are some key points for NGG:
  • Current share price: $50.36
  • The 52 week range is $41.17 to $52.18
  • Earnings estimates for 2011: $4.07 per share
  • Earnings estimates for 2012: $4.51 per share
  • Annual dividend: $3.80 per share which yields 7.6%
Vodafone Group PLC (NASDAQ:VOD) provides mobile communications services including voice, data, Internet, etc., and is based in Europe. If European problems get worse, this stock is likely to revisit lows of about $25.50 made in early August. Buying around $25 would give investors a yield of about 8% which will pay you to wait for better times.

Here are some key points for VOD:
  • Current share price: $26.44
  • The 52 week range is $23.41 to $29.75
  • Earnings estimates for 2011: $2.92 per share
  • Earnings estimates for 2012: $3.25 per share
  • Annual dividend: about $1.92 per share which yields 7.2%
Energy Transfer Partners (NYSE:ETP) provides natural gas pipeline and transportation services, and sells propane in the United States. This stock offers a strong dividend payout and yields over 8%. In early August, ETP shares traded around the $41 to $42 level and a market correction could give investors another chance to buy at that level.

Here are some key points for ETP:
  • Current share price: $44.56
  • The 52 week range is $40.25 to $55.50
  • Earnings estimates for 2011: $2.12 per share
  • Earnings estimates for 2012: $2.67 per share
  • Annual dividend: $3.58 per share which yields 8%
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.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: 7 High Quality Dividend Stocks To Buy During The Next Correction