The best Dividend Stocks Of 2020 (So Far)
At the start of the year, stock prices were at their best. A country like America, for example, was enjoying one of its longest bullish runs in the market. This run stretched over eleven years, and the American economy was doing so well. At that time, the unemployment rate was under 3.5 percent, which was at its lowest in over fifty years. Fast forward a few months, and you will notice that interest rates have crashed to zero levels, unemployment rates have hit an all-time low, and the ten-year Treasury is yielding lower than 0.7 percent. As investors are struggling to find other sources of income, the U.S news has pointed out some of the best dividend stocks that are available in 2020. The offers individually give a potential for yields and high capital appreciation that the ten years Treasury cannot give. The list is a little more stable than the stock market itself in recent times.
Hello, esteemed readers, my name is Antoaneta, and in this article, we will be looking at some of the best dividend stocks in this year of economic recession. The market is a little volatile, and investors are beginning to panic, but shrewd investors can see the light at the end of the tunnel. Some of these stocks include:
- AbbVie (ABBV)
- AT&T (T)
- Discover Financial Services (DFS)
- Johnson & Johnson (JNJ)
- Brookfield Renewable Partners (BEP)
- Healthpeak Properties (PEAK)
- NetEase (NTES)
- Intel Corp. (INTC)
- McDonald’s (MCD)
- Novartis (NVS)
AbbVie (ABBV): With a market capitalization of $109 billion, a dividend yield of 6.5 percent, and a payout ratio of 81%, AbbVie is one of the only two names in this list that made the list of the best dividend stocks in 2019. AbbVie is a mega-cap pharmaceutical that makes Humira, one of the best selling drugs worldwide.
The company’s returns in 2019 were jeopardized by the surprise $63 billion buyouts of Botox-maker Allergan (AGN) at a hefty markup of 45%. There was worry that the ABBV was paying too much for Allergan, but things turned around for good in the stock market after some time. Even after coronavirus inspired a sell-off, shares were more than 15% above the 2019 lows. ABBV pays a hefty dividend and has spiked its annual payout for the last 47 years.
AT&T (T): With a market capitalization of $215 billion, a dividend yield of 7%, and a payout ratio of 108%, AT&T is an elite member of dividend aristocrats. It is a part of the S&P 500 companies that raised dividends for the last 25 years. As a big player in the wireless business, AT&T’s power is not rivalled by many. After a surprise hangover post-acquisition in 2018, shares rebounded the following year. Due to the nature of the bear market in 2020, T stock trades have reached levels that haven’t been reached since 2012, making it tempting for investors.
Discover Financial Services (DFS): With a market capitalization of $11.3 billion, a dividend yield of 4.6%, and a payout ratio of 19%, DFS is the fourth biggest credit card company. This company grows steadily year in, year out. Its former 2.1% dividend doubled to 4.6% after a decline in share price during the first quarter of the year 2020. However, there is room to increase payout, since the company needs just a fifth of its annual earnings to fund dividends. The potential for higher capital appreciation makes DFS enter this list. It’s stock 4.2 ratios of price to earnings is below its standard P/E ratio of 10.8, and its price to earnings to growth ratio of 0.4 shows some extreme values.
Johnson & Johnson (JNJ): With a market capitalization of $346 billion, a dividend yield of 3%, and a payout ratio of 66%, JNJ is one of the leading companies in the U.S, with the ability to outperform the market, as health care stocks outperform in recessions and bull markets. With its size, diversification, and dividend increase streak of 57 years, JNJ was up by about 7% in the first quarter of 2020. That increase is set to get better as JNJ is grooming a leading candidate in the vaccine creation for COVID-19.
Brookfield renewable partners (BEP): With a market capitalization of $7.4 billion, a dividend yield of 5.3%, and a payout ratio of 89% of FFO, BEP is one of the leading energy stocks to buy in 2020. It is also an MLP, allowing BEP to avoid corporate taxes through mandatory dividend payments. BEP can be seen as a hybrid of sorts between utility and energy companies. The company aims to spike distribution from 5-9% annually.
Healthpeak properties (PEAK): With a market capitalization of $12 billion, a dividend yield of 5.9%, and a payout ratio of 84%, PEAK is different from the other members of the list. It is an investment trust of real estate, and avoids corporate taxes. PEAK has a rule of distributing about 90% 0f its income to shareholders annually, and also specializes in senior housing, high quality care for health, life sciences, and medical offices. Due to its potential to stabilize, and build a broader portfolio, it is one of the best stocks of 2020.
Intel Corp. (INTC): With a market capitalization of $235 billion, a dividend yield of 2.5%, and a payout ratio of 26%, INTC, a semiconductor producing giant and member of DOW 30, made the list for two consecutive years. The company is trying to reposition and reinvent itself in data, as its data centres are responsible for more than 33% of the revenue. It has recorded 4 straight years in record revenue, and is now a well-priced stock.
McDonald’s Corp (MCD): With a market capitalization of $125 billion, a dividend yield of 3.1%, and a payout ratio of 60%, MCD has a great staying power. The giants of fast-food have grown dividend payout for 43 years and outperformed S&P by 46% during the 2008 recession. Investors are very willing to pay for cash cows in MCD, making it a great dividend stock for 2020.
Novartis (NVS): With a market capitalization of $183 billion, a dividend yield of 3.8%, and a payout ratio of 56%, Novartis is a Swiss drugmaker that cuts a blue-chip stock to buy in 2o2o. Revenues of this company grew with fast-selling drugs like Cosentyx and Entresto giving its portfolio a boost. NVS also made some acquisitions in 2018. Its most recent buy, The Medicines Co., developed a cardiovascular and cholesterol drug that is making waves.