In a highly volatile market investors are looking to settle into stable stocks that pay a dividend. Hiding out in a high yield stock is always a great alternative to trying to time the market’s lows or dealing with the stressful swings. All 7 of these stocks are on the S&P’s Dividend Aristocrat list, meaning they have increased their dividend for 25 years or more. They also all have a dividend yield of 3% or more.
With GDP forecasted at 2% in 2012 we can expect these stable stocks to continue to perform. Investing in what people need verses what they want has been a successful strategy over the last year. Each of these stocks specializes in the need category.
Procter & Gamble (NYSE:PG)
Procter and Gamble is a household name. Most of us have at least one of their products in our kitchen or bathroom. Rougemont recently pointed out that CEO Robert McDonald bought $400k worth of shares on October 30th. It’s always nice to see a CEO putting his own cash to work in the company he or she manages.
PG has a dividend yield of 3.3% with a 5 year dividend growth rate over 11% and a payout ratio of just 55%. The company has increase dividends for 57 consecutive years and has been paying dividends to it’s shareholders for over 100 years.
Abbott Laboratories (NYSE:ABT)
While you might not have an Abbott lab product in your house this company’s services still fall into the need category. Vatalyst talked about their plans to split their company into two separate businesses. One will focus on pharmaceuticals while the other will handle their medical device business.
ABT is a very strong dividend stock, one of the highest on our safe dividend stocks list. That’s because it has a dividend yield of 3.5%, a 3 and 5 year dividend growth rate right at 10% and a 3 year net income growth rate of 8.6%. ABT has raised it’s dividend for 57 consecutive years and has been paying dividends since 1926.
Johnson & Johnson (NYSE:JNJ)
If you follow dividend paying stocks you are very familiar with Johnson and Johnson and its dividend fundamentals. Income investors might be tired of hearing about this stock but get bored with JNJ. They have been able to maintain a steady net income growth rate of 8% over the last 3 years and have a 5 year dividend growth rate over 10%.
JNJ currently pays an annual dividend of $2.28 giving it a 3.5% dividend yield, which is above its 5 year dividend yield average of 3%. They have raised their dividend for the last 48 years and have been paying dividends since 1944.
Just like Proctor and Gamble there is a good chance you have a Kimberly-Clark product in your house, especially if you have young children. Kimberly-Clark specializes in personal care, tissue and healthcare products.
KMB is currently yielding 4% which is slightly above its 5 year average of 3.7%. Their 3 year net income growth rate is flat but they have been growing their dividend at about 8% over the last 5 years. This is reflected in their increasing payout ratio which is now above 60%. Earnings growth will be key for Kimberly Clark but the dividend remains relatively safe at these levels.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.