Retirement Strategies: Corrections Are Great For Dividend Investors

Includes: CVX, GE, JNJ, KO, MCD, PG, T, XOM
by: Regarded Solutions

Let's face it, nobody ever wants the stock markets to go down. We all want stocks to fly and everything to continue going up forever, right? Well, at least I do. January showed us that the reality is that nothing will go up forever and at some point, just about every stock will drop.

The point is that it is NOT the end of the world, and can be great for retired dividend seeking investors who have the dry powder and who invest in the largest blue chip mega cap stocks on the planet, that pay us to hold shares! It stands to reason that folks who might have missed the run-up, or those just getting started, or even current investors seeking some bargains, would embrace the sell-offs as opportunities to buy some great companies.

Let's Look At Some Of The Bluest Of Blue Chip Dividend Stocks

I would argue that not one of these companies will disappear, and will continue to increase their dividends year in and year out. That of course will mean more income for retired folks, better opportunities for those planning for the future, and those just beginning their investing journey.

Using just two barometers, current yield and forward PE, the following enormous companies are now sitting with better dividend yields than just one month ago!

AT&T (NYSE:T), Exxon Mobil (NYSE:XOM), Johnson & Johnson (NYSE:JNJ), Coca-Cola (NYSE:KO), Procter & Gamble (NYSE:PG), General Electric (NYSE:GE), McDonald's (NYSE:MCD), and Chevron (NYSE:CVX).

T 5.50% 12.48
XOM 2.80% 11.83
JNJ 3.10% 14.09
KO 3.00% 17.04
PG 3.10% 16.51
GE 3.60% 13.81
MCD 3.50% 14.85
CVX 3.60% 9.72

There are dozens more companies that have become "accidental" high yielders, but I happen to like the diversity of owning these as core stocks for a dividend portfolio, as well as the global footprint of most of them, the brand name recognition, the dividend track records of each of them (yep, I know about GE), the sheer size and reach of each of these companies, and of course the dividend yield.

If you look back at the history of these stocks, they have produced income for people who need it to pay expenses, or to reinvest to build wealth exponentially. If investors know why they are investing, they might have a completely different view of market corrections.

Quite frankly, they might even look forward to them! I am not talking apocalypse folks, I am talking about normal bull market corrections that I happen to believe we are now finally seeing. The correction or pullback might not even be over, but what it can do is shake the weak hands out, drop the prices of great stocks lower, reduce the forward PE to very attractive historical levels, and of course the most important aspect, have a higher yield for greater income, as more shares can be purchased for less money.

Focus And Discipline

It does require that investors know what they are investing for, having a plan, staying focused, and having the discipline to follow through. Deviating or becoming fearful is a battle we all face, but all I can say is that for every seller there is a buyer (especially in the stocks I noted), and just as stocks will never go up forever, they also have never gone down forever, in the history of the world.

Buying the dips and adding to the core does work, and can offer everyone a more secure financial future.

Think about it.

The Bottom Line

I am not suggesting that everyone just charge the mountain at full speed at plop down every penny on every stock today. Make believe you are shopping in a retail store for something you need. Walk slowly up and down the aisle until you spot what you are seeking, and it happens to be on sale.

I am pretty sure your face will light up and you will know exactly what you want to do.

Disclaimer: The opinions of this author are not suggestions to either buy or sell any security. Please do your own research prior to making any investment decisions.

Disclosure: I am long T, XOM, JNJ, GE, CVX, KO, MCD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.