The Best Dividend Stocks To Buy Before The Christmas Rally

Dec. 23, 2019 5:20 AM ETCCL, EXPD, FDX42 Comments


  • Stocks are up 3.5% in December, 8% in the last three months and 31% YTD.
  • Yet, the six trading days following Christmas historically bring 0.75-1.5% further gains, about 1,000% greater than any other six-day period of the year.
  • With the S&P 500 now 16% historically overvalued, pullback/correction risk is highly elevated and it's more important than ever to allocate your savings reasonably and prudently.
  • Carnival Corp., FedEx and Expeditors International are three quality dividend stocks that are trading at reasonable to attractive valuations and should deliver both steady dividend growth over time as well as 10+% CAGR long-term total returns.
  • The rest of this article walks you through a prudent method of screening quality dividend stocks for valuation, so you can always know the best companies to entrust your hard-earned savings at any given time.
  • Looking for a portfolio of ideas like this one? Members of The Dividend Kings get exclusive access to our model portfolio. Get started today »

(Source: imgflip)

Due to reader requests, I've decided to break up my weekly "Best Dividend Stocks To Buy This Week" series into two parts.

One will be the weekly watch list article (with the best ideas for new money at any given time). The other will be a portfolio update.

To also make those more digestible, I'm breaking out the intro for the weekly series into a revised introduction and reference article on the 3 rules for using margin safely and profitably (which will no longer be included in those future articles).

To minimize reader confusion, I will be providing portfolio updates on a rotating tri-weekly schedule. This means an update every three weeks on:

The Santa Claus Rally Is A Real Thing...

With the stock market up so strongly over the past three months, many investors consider this a "Santa rally".

(Source: YCharts)

Actually, as Mark Hulbert points out in this article, the Santa rally is a statistical anomaly in which the six trading days following Christmas are about 50% more likely to see stocks advance.

That probability will fluctuate between 70% and 85%, depending on whether or not the market is up in December (it's up 3.5% this December). What's more, the historical gains of the Santa rally are 1000% greater than those in any other six-day period.

The stock market normally goes up (75% of all years since 1926), but the probability of stocks going up in any six-day stretch is 55%. 70-85% probability of stocks going up is statistically significant, and thus why

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This article was written by

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Maximize your income with the world’s highest-quality dividend investments

Adam Galas is a co-founder of Wide Moat Research ("WMR"), a subscription-based publisher of financial information, serving over 5,000 investors around the world. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps.

The WMR brands include: (1) The Intelligent REIT Investor (newsletter), (2) The Intelligent Dividend Investor (newsletter), (3) iREIT on Alpha (Seeking Alpha), and (4) The Dividend Kings (Seeking Alpha).

I'm a proud Army veteran and have seven years of experience as an analyst/investment writer for Dividend Kings, iREIT, The Intelligent Dividend Investor, The Motley Fool, Simply Safe Dividends, Seeking Alpha, and the Adam Mesh Trading Group. I'm proud to be one of the founders of The Dividend Kings, joining forces with Brad Thomas, Chuck Carnevale, and other leading income writers to offer the best premium service on Seeking Alpha's Market Place.

My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives.

With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and safe and dependable income streams in all economic and market conditions.

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

Additional disclosure: Dividend Kings owns CCL and FDX in two of our portfolios.

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