5 Safe And Cheap Dividend Stocks To Invest This Month (Retirement Series)

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Includes: ABBV, HD, LYB, MPC, T
by: Financially Free Investor
Summary

The markets have strongly recovered from a near-bear market scenario on Christmas Eve last year. We still do not have a clear trend yet, though sentiment has vastly improved.

Irrespective of market direction or sentiment, it's always a good idea to keep your wish list ready by separating the wheat from the chaff.

This is part of our periodic series, where we highlight five companies that are large-cap, relatively safe, dividend-paying companies and also offer large discounts to their historical norms.

We go over the filtering process to select just five such stocks from more than 7,500 companies that are traded on the U.S. exchanges, including OTC networks. The selected five companies, as a group, would offer an average of 25% more dividends compared to the beginning of last year.

On Christmas Eve last year, the broader market as represented by S&P 500 had closed -19.8% below its all-time peak, just a hair above the official bear market scenario of -20%. The markets have rallied back strongly since then and almost 14% up since then. Some see this to be a clear sign that bulls are back in control, while others believe it to be a bear market bounce rally. We may not have a clear trend yet; nonetheless, there is no denial that sentiment has vastly improved.

Irrespective of the market's gyrations, we remain on the constant lookout for companies that may be trading cheap on a relative basis to the overall market as well as to their respective 52-week highs. We also look at the sustainable dividend payout. You may decide to buy or not to buy based on your market perception and personal situation, but you should keep your buy-list handy and dry-powder ready so that you are able to use the opportunity when the time is right.

This article is part of our periodic series where we scan the entire universe of roughly 7,500 stocks that are listed and traded on the US exchanges, including over-the-counter (OTC) networks. We usually highlight five stocks that may have temporary difficulties and/or lost favor with the market and offering deep discounts on a relative basis. Please note that these are not recommendations to buy but should be considered as a starting point for further research.

We start with a fairly simple goal. We want to shortlist five companies that are large-cap, relatively safe, and dividend-paying companies trading at relatively cheaper valuations in comparison to the broader market. The objective here is to highlight and bring to the notice of the value-oriented readers some of the DGI companies that may be offering juicy dividends due to a temporary decline in their share prices. The excess decline may be due to industry-wide decline or some kind of one-time setback like missing quarterly earnings expectations. We adopt a methodical approach to filter down the 7,500-plus companies into a small subset. Also, to select five stocks, we will choose two or three stocks that have high current yields and the rest that have had high dividend growth.

Note: Please notice that when we use the term "safe" regarding stocks, it should be interpreted as "relatively safe" because nothing is absolutely safe in investing. Also, in our opinion, for a well-diversified portfolio, one should have 15-20 stocks at a minimum.

Goals for the selection process

We want to emphasize our goals before we get to the actual selection process. Our primary goal is income, and the secondary goal is to grow capital. These goals are by and large in alignment with most retirees and income investors as well as DGI investors. A balanced DGI portfolio should keep a mix of high-yield, low-growth stocks along with some high-growth but low-yield stocks. However, how you mix the two will depend upon your personal situation, including income needs, time horizon, and risk tolerance.

A well-diversified portfolio would normally consist of many more than just five stocks and preferably a few stocks from each sector of the economy. However, in this series of articles, we try to shortlist and highlight just five stocks that may fit most income and DGI investors but, at the same time, are trading at attractive valuations. However, as always, we recommend you do your due diligence before making any decision on them.

Selection Process

The S&P 500 (NYSEARCA:SPY) yields just about 2%. If we are dividend and income investors, we should logically look for companies which pay yields that are at least better than the S&P 500. Of course, higher the better, but at the same time, we should not try to chase high yield. If we try to filter for dividend stocks paying 2% plus dividend yield, there are nearly 2,000 such companies trading on US exchanges, including OTC networks. If we further limit our choices to companies which have a market cap of at least $20 billion and daily trading volume in excess of 100,000 shares, the number comes down to little over 250 companies.

We also want stocks that are trading at relatively cheaper valuations, so we will apply an additional filter with a forward P/E of no more than 20. But that's not enough since a P/E of 20 is not really that cheap. So, in our quest for not paying too high a price, we add one more criterion that the close price is at least 15% below the 52-week high. After applying these additional criteria, we get a set of 118 companies.

Criteria to Shortlist

  • Market-cap >= 20 billion
  • Dividend yield >= 2.0%
  • Dividend growth past 5-years >= 0%
  • Forward P/E <= 20
  • Distance from 52-Week High < -15%.

Below is the complete list of 118 companies that we got by using the above criteria, sorted on the ticker/symbol.

Company Name

Ticker

Market Cap ($ Billion)

Div. Yield %

5 Yr Hist. Div. Growth %

(01/18/2019)

52 Week High

Distance from 52-wk High

AbbVie Inc.

ABBV

134.6

4.78%

17.54

89.5

123.21

-27.36%

Ambev S.A.

ABEV

74.7

3.11%

3.47

4.75

7.39

-35.72%

American International Group

AIG

39.1

2.90%

27.42

44.16

64.8

-31.85%

The Allstate Corporation

ALL

29.5

2.15%

12.27

85.7

104.43

-17.94%

Applied Materials, Inc.

AMAT

34.2

2.24%

7.79

35.71

61.61

-42.04%

Atlas Copco AB

ATLKY

21.5

3.60%

12.60

25.6

47.53

-46.14%

Aviva PLC

AVVIY

21.8

4.11%

9.99

10.855

15.15

-28.35%

AXA SA

AXAHY

57.1

5.27%

7.65

23.37

33.84

-30.94%

Allianz SE

AZSEY

92.0

3.37%

16.03

20.9

25.47

-17.94%

Bayer Aktiengesellschaft

BAYRY

63.0

2.99%

3.52

19.04

33.71

-43.52%

BlackRock, Inc.

BLK

66.2

2.98%

10.43

419.45

593.26

-29.30%

Bristol-Myers Squibb Co.

BMY

81.8

3.27%

2.42

50.12

68.98

-27.34%

BNP Paribas SA

BNPQY

60.5

6.13%

23.51

24.245

42.6

-43.09%

Bank of Nova Scotia (The)

BNS

67.8

4.51%

2.83

55.24

66.49

-16.92%

BT Group PLC

BT

30.6

3.57%

2.38

15.4

18.89

-18.48%

The Blackstone Group L.P.

BX

21.8

7.78%

0.43

32.91

39.69

-17.08%

Citigroup Inc.

C

162.2

2.85%

152.15

63.12

80.08

-21.18%

Canon, Inc.

CAJ

30.4

4.07%

0.92

28.17

40.22

-29.96%

Caterpillar Inc.

CAT

80.6

2.52%

5.61

136.6

170.89

-20.07%

Carnival Corporation

CCL

28.9

3.64%

14.53

54.88

71.94

-23.71%

Colgate-Palmolive Co.

CL

54.3

2.68%

3.83

62.63

77.5

-19.19%

Canadian Imperial Bank of Commerce

CM

36.6

4.95%

4.52

82.7

99.1

-16.55%

Comcast Corporation

CMCSA

168.2

2.10%

12.14

36.21

42.99

-15.77%

Cummins Inc.

CMI

24.2

3.03%

12.13

150.56

192.5

-21.79%

Canadian Natural Resources

CNQ

33.2

3.67%

6.31

27.5

37.5

-26.67%

Credit Agricole SA

CRARY

33.2

4.49%

14.99

5.825

9.56

-39.07%

Continental AG

CTTAY

30.6

2.53%

11.91

15.31

30.75

-50.21%

CVS Health Corporation

CVS

66.8

3.05%

16.11

65.52

83.63

-21.65%

Delta Air Lines, Inc.

DAL

33.0

2.91%

61.29

48.11

60.71

-20.75%

Danone

DANOY

46.0

2.92%

7.89

14.22

17.45

-18.51%

Discover Financial Services

DFS

22.3

2.41%

12.68

66.37

81.31

-18.37%

Deutsche Post AG

DPSGY

36.4

4.64%

6.54

29.525

50.13

-41.10%

Dow Chemical Company (The)

DWDP

135.2

2.62%

0.12

58.06

77.02

-24.62%

iShares MSCI Emerging Mkt ETF

EEM

31.6

2.10%

1.27

41.55

52.08

-20.22%

Emerson Electric Co.

EMR

39.9

3.08%

2.28

63.68

78.52

-18.90%

Equinix, Inc.

EQIX

30.1

2.43%

31.32

374.67

455.43

-17.73%

Eaton Corporation, PLC

ETN

31.1

3.67%

6.83

71.87

88.5

-18.79%

Ford Motor Company

F

34.1

6.99%

3.57

8.58

13.1

-34.50%

General Dynamics Corporation

GD

49.9

2.21%

10.71

168.58

229.95

-26.69%

Gilead Sciences, Inc.

GILD

89.5

3.30%

26.60

69.18

88.8

-22.09%

General Mills, Inc.

GIS

25.9

4.51%

5.29

43.47

60.2

-27.79%

Corning Incorporated

GLW

24.5

2.35%

14.77

30.63

36.13

-15.22%

Halliburton Company

HAL

28.3

2.23%

2.84

32.25

56.83

-43.25%

The Home Depot, Inc.

HD

202.8

2.29%

21.44

179.58

213.85

-16.03%

Honda Motor Co., Ltd.

HMC

52.9

2.63%

0.08

29.76

36.73

-18.98%

Honeywell International Inc.

HON

105.0

2.31%

13.19

141.85

167.34

-15.23%

Hewlett Packard Enterprise Co

HPE

20.5

3.07%

59.28

14.68

19.41

-24.37%

International Business Machines corp

IBM

112.5

5.07%

9.86

123.82

169.12

-26.79%

Industria de Diseno Textil SA

IDEXY

84.8

2.24%

14.81

13.61

18.12

-24.89%

Imperial Tobacco Group PLC

IMBBY

30.9

10.29%

0.24

32.375

43.68

-25.88%

Imperial Oil Limited

IMO

22.0

2.06%

5.12

28.03

34.16

-17.94%

ING Group, N.V.

ING

46.5

3.71%

28.11

11.94

20.57

-41.95%

Intesa Sanpaolo SpA

ISNPY

37.0

7.36%

39.03

13.98

23.75

-41.14%

Illinois Tool Works Inc.

ITW

45.3

2.93%

18.60

136.67

178.88

-23.60%

Johnson Controls International

JCI

30.2

3.18%

9.49

32.73

41.43

-21.00%

Kellogg Company

K

20.6

3.77%

3.79

59.43

74.84

-20.59%

The Kraft Heinz Company

KHC

58.0

5.26%

4.33

47.53

80.27

-40.79%

Komatsu Ltd.

KMTUY

24.1

2.78%

9.69

25.56

39.95

-36.02%

Lockheed Martin Corporation

LMT

80.5

3.11%

10.57

282.87

361

-21.64%

Lowe's Companies, Inc.

LOW

76.3

2.02%

22.19

94.98

116.84

-18.71%

Lam Research Corporation

LRCX

22.9

2.98%

48.32

147.55

228.65

-35.47%

Las Vegas Sands Corp.

LVS

45.2

5.20%

9.33

57.7

81.27

-29.00%

LyondellBasell Industries N.V.

LYB

33.7

4.55%

14.87

87.86

121.49

-27.68%

Lloyds Banking Group PLC

LYG

53.5

3.74%

21.41

2.97

4.19

-29.12%

MetLife, Inc.

MET

44.7

3.71%

5.76

45.31

54.77

-17.27%

Manulife Financial Corp

MFC

31.7

4.72%

8.50

16.1

21.99

-26.78%

3M Company

MMM

114.0

2.78%

10.79

195.86

258.63

-24.27%

Altria Group, Inc.

MO

90.8

6.62%

10.34

48.31

71.56

-32.49%

Marathon Petroleum Corp.

MPC

45.7

2.78%

19.03

66.09

86.39

-23.50%

Morgan Stanley

MS

75.2

2.75%

40.63

43.69

58.91

-25.84%

M&T Bank Corporation

MTB

23.2

2.42%

5.55

165.59

196.81

-15.86%

Mitsubishi UFJ Financial Group

MUFG

69.5

3.01%

2.13

5.3

8.07

-34.32%

National Australia Bank Ltd.

NABZY

48.4

7.61%

0.35

9.05

12.02

-24.71%

Nordea Bank AB

NRDBY

36.9

7.53%

11.65

9.1

12.85

-29.18%

Nissan Motor Co.

NSANY

32.9

4.65%

16.53

16.835

21.9

-23.13%

Northern Trust Corporation

NTRS

20.2

2.41%

9.85

91.16

111.63

-18.34%

Nippon Telegraph and Telephone Corp

NTTYY

82.0

2.96%

13.07

41.44

49.2

-15.77%

Occidental Petroleum Corp.

OXY

50.6

4.65%

1.81

67.03

86.48

-22.49%

POSCO

PKX

20.5

2.45%

5.92

58.75

92.78

-36.68%

Philip Morris International Inc.

PM

114.7

6.18%

3.50

73.79

110.6

-33.28%

PNC Financial Services Group

PNC

57.8

3.03%

15.64

125.25

162.45

-22.90%

Prudential Financial, Inc.

PRU

38.1

3.90%

12.78

92.26

126.02

-26.79%

Phillips 66

PSX

43.9

3.36%

13.22

95.3

123.34

-22.73%

QUALCOMM Incorporated

QCOM

67.0

4.49%

10.83

55.27

75.09

-26.39%

Reckitt Benckiser Group PLC

RBGLY

54.8

2.23%

0.86

15.515

21.48

-27.77%

Royal Caribbean Cruises Ltd.

RCL

22.9

2.56%

25.03

109.35

134.98

-18.99%

Royal Dutch Shell PLC

RDS.A

254.7

5.23%

0.25

61.07

73.64

-17.07%

Royal Dutch Shell PLC

RDS.B

261.6

5.99%

0.25

62.72

76.69

-18.22%

Repsol SA

REPYY

26.2

4.42%

3.67

17.14

20.41

-16.02%

Raytheon Company

RTN

47.1

2.10%

8.59

165.41

228.13

-27.49%

Sampo PLC

SAXPY

26.0

5.46%

8.65

23.205

29.92

-22.44%

Southern Copper Corporation

SCCO

25.0

4.96%

31.67

32.29

57.34

-43.69%

Societe Generale Group

SCGLY

26.3

6.39%

27.49

6.5

11.72

-44.54%

Siemens AG

SIEGY

97.4

2.95%

2.54

57.305

77.05

-25.63%

Schlumberger Limited

SLB

61.9

4.47%

4.39

44.73

79.79

-43.94%

Sun Life Financial Inc.

SLF

22.2

4.13%

4.01

36.8

44.15

-16.65%

Sumitomo Mitsui Financial Group Inc

SMFG

51.2

3.31%

0.87

7.24

9.6

-24.58%

China Petroleum & Chemicals

SNP

96.6

5.22%

3.52

79.75

105.5

-24.41%

SunTrust Banks, Inc.

STI

27.3

3.29%

26.84

60.72

74.71

-18.73%

State Street Corporation

STT

27.1

2.64%

11.33

71.3

112.71

-36.74%

Suncor Energy Inc.

SU

51.0

3.39%

4.98

32

42.27

-24.30%

Sysco Corporation

SYY

32.6

2.49%

5.07

62.68

75.78

-17.29%

AT&T Inc.

T

190.1

6.59%

2.03

30.96

39.16

-20.94%

TE Connectivity Ltd.

TEL

27.9

2.17%

11.37

81.25

105.75

-23.17%

Target Corporation

TGT

36.9

3.62%

8.24

70.68

89.26

-20.82%

T. Rowe Price Group, Inc.

TROW

23.2

2.90%

10.32

96.61

126.24

-23.47%

The Travelers Companies, Inc.

TRV

32.8

2.48%

9.06

124.01

150

-17.33%

Taiwan Semiconductor Manufacturing Co.

TSM

191.1

2.81%

24.67

36.84

46.38

-20.57%

Tyson Foods, Inc.

TSN

22.3

2.46%

39.77

60.96

81.13

-24.86%

Texas Instruments Inc.

TXN

95.5

3.10%

21.20

99.42

119.89

-17.07%

UBS Group AG

UBS

52.5

5.07%

25.38

13.61

20.89

-34.85%

United Parcel Service, Inc.

UPS

87.3

3.58%

7.39

101.6

134.01

-24.18%

United Technologies Corp.

UTX

91.2

2.58%

4.34

113.9

142.08

-19.83%

Telefonica Brasil S.A.

VIV

21.0

5.82%

3.81

12.45

17.2

-27.62%

Valero Energy Corporation

VLO

35.0

3.87%

31.50

82.59

124.44

-33.63%

Walgreens Boots Alliance, Inc.

WBA

68.3

2.43%

6.47

72.43

85.69

-15.47%

Wells Fargo & Company

WFC

243.9

3.44%

4.65

50.01

65.93

-24.15%

Exxon Mobil Corporation

XOM

309.3

4.49%

4.37

72.99

89.07

-18.05%

Narrowing Down to About Two Dozen

While narrowing down the list to a couple of dozen names, we will follow a two-step process. We would like to have a few companies with an emphasis on high current-yield as well as a few others with high dividend growth potential. As you would see below, the process of narrowing down out of the above list (of 118 names) can be a bit subjective. While making our selection, we will discard any company if we feel its dividend history is not long enough, or the credit rating is not good enough, or maybe the safety of its dividend is in question. Also, we would like to select only one company from a single sector/industry segment.

Two-Step process:

High Current Yield: We first sort this list on current yield and select the top 10 companies. Not every high-yielding company makes the cut. We discard companies if the safety of their dividend may be in question or their dividend histories are not long enough (not necessarily dividend growth).

Selected companies on High Yield:

BX, OTCPK:NABZY, F, MO, T, RDS.B, LVS, ABBV, MFC, LYB

Ticker

Div. Yield %

No of years - Div. Growth (history)

5 Yr Hist. Div. Growth %

Last Close

(01/18/2019)

52 Week High

Distance from 52-week High

BX

7.78%

2 (11)

0.43

32.91

39.69

-17.08%

NABZY

7.61%

0 (36)

0.35

9.05

12.02

-24.71%

F

6.99%

6

3.57

8.58

13.1

-34.50%

MO

6.62%

49

10.34

48.31

71.56

-32.49%

T

6.59%

34

2.02

30.96

39.16

-20.94%

RDS.B

5.99%

2 (13)

0.25

62.72

76.69

-18.22%

LVS

5.20%

6

9.33

57.7

81.27

-29.00%

ABBV

4.78%

6

17.54

89.5

123.21

-27.36%

MFC

4.72%

5

8.50

16.1

21.99

-26.78%

LYB

4.55%

8

14.87

87.86

121.49

-27.68%

High Dividend Growth: We sort our extended list once again, but this time on "five-year dividend growth rate." We select the 14 most compelling companies with recent dividend growth rates that have been impressive.

Selected companies on High-Dividend-Growth:

DAL, HPE, LRCX, MS, TSN, GILD, VLO, ING, MPC, HD, MFC, ABBV, ITW, TXN

We look at the payout ratio for these 14 companies and use the combined weight of both the 5-year dividend growth and the payout ratio. They are listed below in the order of derive combined weight, as below:

Ticker

Div. Yield %

5 Yr Hist. Div. Growth %

Distance from 52-week High

No of yrs (Div Growth)

Payout Ratio

Debt/Asset

Rating

Payout Ratio, Div-Growth

DAL

2.91

61.29%

-20.75%

5

21.17%

0.16

BBB-

140.12%

HPE

3.07

59.28%

-24.37%

3

28.44%

0.22

BBB

130.84%

LRCX

2.98

48.32%

-35.47%

4

31.03%

0.22

BBB+

117.29%

MS

2.75

40.63%

-25.84%

5

24.11%

0.22

A+

116.52%

TSN

2.46

39.77%

-24.86%

7

25.26%

0.34

BBB

114.51%

GILD

3.3

26.60%

-22.09%

3

33.78%

0.43

A

92.82%

VLO

3.87

31.50%

-33.63%

8

39.06%

0.18

BBB

92.44%

ING

3.71

28.11%

-41.95%

3

35.78%

0.15

A-

92.33%

MPC

2.78

19.03%

-23.50%

7

28.03%

0.35

BBB

91.00%

HD

2.29

21.44%

-16.03%

9

42.03%

0.45

A

79.41%

MFC

4.72

8.50%

-26.78%

5

34.90%

0.02

A

73.60%

ABBV

4.78

17.54%

-27.36%

6

48.97%

0.61

A-

68.57%

ITW

2.93

17.35%

-23.60%

43

49.72%

0.48

A+

67.63%

TXN

3.1

19.71%

-17.07%

15

56.40%

0.27

A+

63.31%

Narrowing Down to 10 Companies

From the above, we have a total of 24 companies. Since ABBV and MFC appear in both, we can eliminate the duplicates, and we have 22 names left. From this list, we eliminate any company that has a dividend growth history of fewer than 5 years, even if their dividend history is much longer. There are 7 such companies. This leaves us 15 names. Since both VLO and MPC are from the same industry-segment, we keep MPC, though we like both. We also removed LVS as we think it is a bit high risk. We removed MO as well due to uncertainties (and risks) coming from tougher regulations on e-cigarettes. This leaves us 12 names, all have investment grade credit rating (BBB or above), except DAL which has BBB-, so we remove DAL as well. Since MS and MFC are both from the financial sector, we keep MS (leaving out MFC). The final 10 are listed below.

Ticker

Div. Yield %

5 Yr Hist. Div. Growth %

Distance from 52-wk High

No of yrs

Payout Ratio

Asset

Ratio

Rating

Payout Ratio, Div-Growth

MS

2.75

40.63%

-25.84%

5

24.11%

0.22

??

A+

116.52%

TSN

2.46

39.77%

-24.86%

7

25.26%

0.34

0.41

BBB

114.51%

MPC

2.78

19.03%

-23.50%

7

28.03%

0.35

1.57

BBB

91.00%

HD

2.29

21.44%

-16.03%

9

42.03%

0.45

1.11

A

79.41%

LYB

4.55

14.87%

-27.68%

8

36.55%

0.11

0.46

BBB+

78.32%

ABBV

4.78

17.54%

-27.36%

6

48.97%

0.61

1.54

A-

68.57%

ITW

2.93

17.35%

-23.60%

43

49.72%

0.48

3.16

A+

67.63%

TXN

3.1

19.71%

-17.07%

15

56.40%

0.27

1.17

A+

63.31%

F

6.99

9.22%

-34.50%

6

46.98%

0.59

0.85

BBB

62.24%

T

6.59

2.02%

-20.94%

34

57%

0.34

1.47

BBB

44.87%

Final Step: Narrowing Down to Just 5 Companies

This final step is really not all that important. We think each of the above 10 companies is good enough to make to our list. The readers could select any of the 10 names according to their own choosing or as many as they like. However, if we had only 5 spots to fill and that was our goal, we would select the following. This is highly subjective and based on our perception based on valuations, yields, and safety. The readers could differ with the selections, and they may come up with their own set of five companies. Here's what we selected:

Final List: MPC, HD, ABBV, LYB, and T

It goes without saying that each company comes with certain risks and concerns, but we think they may be overblown and should be temporary. We think these companies would form a solid group of dividend companies that would be appealing to income-seeking investors or anyone above 50 years of age. They all have at least five years of dividend history, investment grade debt-rating (BBB or higher), and trading on an average of -25% discount from their 52-week highs. Their average dividend/income (as a group) is very attractive at 4.27%, which is nearly 25% higher than what it was a year ago at the beginning of the last year. Though we selected five stocks based on several criteria, however, there are many other stocks on the extended list that may be equally appealing.

Below is a snapshot of five companies showing their current discount and dividend yield compared to last year, i.e., January 2018.

Ticker

Company name

Industry Segment

Close Price on 01/22/2019

52-Week High

Difference/ Discount

MPC

Marathon Petroleum Corp.

Energy/Refinery

64.82

88.45

-26.72%

HD

The Home Depot, Inc.

Retail/Home Improvement

177.11

215.43

-17.79%

ABBV

AbbVie Inc.

Healthcare

88.66

125.86

-29.56%

LYB

LyondellBasell Industries N.V.

Chemicals (specialty)

85.8

121.95

-29.64%

T

AT&T Inc.

Communications/Media

30.58

39.29

-22.17%

Average

89.39

118.20

-24.37%

Ticker

S&P Credit

Rating

Dividend Yield on 01/18/2019

Dividend Yield, Last year (Jan. 2018)

Difference

in Yield

MPC

BBB

2.84%

2.38%

16.1%

HD

A

2.33%

1.89%

18.6%

ABBV

A-

4.83%

2.89%

40.2%

LYB

BBB+

4.66%

3.21%

31.2%

T

BBB

6.67%

5.19%

22.2%

Average

4.27%

3.11%

25.7%

Conclusion

As of January 2018, the average dividend yield of these five stocks was 3.11%. In the meantime, all five of these companies have raised their dividend payouts. If you were to buy these five companies today and invest equal amounts, you would get roughly a 4.27% dividend, which is over 25% gain over what it was at the beginning of last year. Price wise, they are on an average -25% below their 52-week highs and -13% below prices in January last year. Again, not much has changed with regard to the fundamentals or the quality of these companies. So, we think that this group makes an excellent watch list for further research.

Disclaimer: The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock. The author is not a financial advisor. Please always do further research and do your own due diligence before making any investments. Every effort has been made to present the data/information accurately; however, the author does not claim 100% accuracy. The stock portfolios presented here are model portfolios for demonstration purposes.

Disclosure: I am/we are long ABT, ABBV, JNJ, PFE, NVS, NVO, CL, CLX, GIS, UL, NSRGY, PG, KHC, ADM, MO, PM, BUD, KO, PEP, D, DEA, DEO, ENB, MCD, BAC, UPS, WMT, WBA, CVS, LOW, AAPL, IBM, CSCO, MSFT, INTC, T, VZ, VOD, CVX, XOM, VLO, ABB, ITW, MMM, LYB, HCP, HTA, O, OHI, VTR, NNN, STAG, WPC, MAIN, NLY, ARCC, DNP, GOF, PCI, PDI, PFF, RFI, RNP, STK, UTF, EVT, FFC, HQH, KYN, NMZ, NBB, JPS, JPC, JRI, TLT. 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.