A Diversified Dividend Portfolio That Can Weather The Economic Storm

Includes: BT, DUK, ED, PAYX, PM, SNY, STX
by: Simon Monger

The world’s economies don’t seem to be improving very much: European leaders can’t seem to get ahead of market expectations; the few positive economic indicators in the U.S. are being overshadowed by larger signs of a slowdown; emerging markets are preoccupied with inflation concerns that may hamper growth. Even commodities seem to be a little too volatile for investment.

Investors looking for a safe-haven may want to take a look at the only things that seem to be making money during these chaotic times – U.S. large cap stocks. According to Bloomberg data, S&P 500 index companies saw their cash, equivalents and short-term marketable securities increase 63% to $2.77 trillion between Q2 of 2008 and Q2 of this year.

Here are seven of our top dividend stock picks:

  1. BT Group plc (NYSE:BT) – With a 4.05% dividend yield, BT Group is one of the world’s largest communications companies trading with a market capitalization of $22.66 billion and a P/E of just 9.29x. And despite a small hiccup earlier this year, the firm is still in the black year to date.
  2. Seagate Technology plc (NASDAQ:STX) – After jumping sharply higher last week on better-than-expected earnings news, Seagate Technology still offers a dividend yield of 4.67%. Some investors are betting that this disk drive manufacturer will turn around, making it a great dividend and growth play.
  3. Phillip Morris International Inc. (NYSE:PM) – Smoking may not be healthy for consumers, but this tobacco company stock has been great for shareholders with its 4.4% dividend yield. The stock has steadily outperformed expectations and is up nearly 20% year-to-date.
  4. Paychex Inc. (NASDAQ:PAYX) – Those that are bullish on an eventual recovery should check out Paychex’s 4.45% dividend yield. The payroll outsourcing provider could see higher growth if an economic recovery materializes in the U.S. and offers a solid dividend in the meantime.
  5. Sanofi SA (NYSE:SNY) – Sanofi offers a solid 4.95% dividend yield and a healthcare play that won’t be going away anytime soon. The company seems to be recovering from a drop earlier in the year and has below-average volatility with a 0.89 beta coefficient.
  6. Duke Energy Corporation (NYSE:DUK) – Duke Energy is one of the strongest performing stocks in the energy sector. It offers a 4.89% dividend yield. With a still-modest P/E of 13.37x, the $27.1 billion company offers both growth and a dividend kick.
  7. Consolidated Edison Inc. (ED) – Consolidated Edison is one of the largest providers of electricity in the U.S. with a 4.02% dividend yield. The company has been consistently beating expectations and has moved up more than 20% since the beginning of the year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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