Top dividend stocks to weather market volatility
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Since the beginning of 2022, we have seen significant volatility in stock markets. Many of the tech stocks dubbed “the future” have fallen significantly, particularly in the renewable energy, cannabis and buy-now-pay-later (BNPL) sectors. As a result, many portfolios heavily weighted towards such “growth” stocks would have suffered significant losses. This reaffirms the importance of diversifying and buying dividend stocks, as they can offer investors safer income streams compared to highly volatile growth companies.
In addition to this volatility, investors today may favor companies with earnings now rather than far in the future due to rising inflation and rising interest rates. We witnessed this in real-time as the NASDAQ 100 (a proxy for technology stocks) officially entered a bear market (down 20% or more) from its November 2021 peak. This could, I believe, benefit the three companies mentioned below.
5 stocks for trying to build wealth after 50
Markets around the world have been rocked by the current situation in Ukraine… and with so many great companies trading at prices that look like “discount bin” prices, now could be the time for savvy investors, potential bargains close.
But whether you’re a newbie or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect in such unprecedented times.
Fortunately, The Motley Fool UK’s team of analysts have shortlisted five companies that they believe STILL have significant long-term growth prospects despite the global upheaval…
We’re sharing the names in a special FREE investment report you can download today. We think these stocks could be a great fit for any well-diversified portfolio aiming to build wealth in your 50s.
The first stock to add to my portfolio is sleeve, which should continue to benefit from high oil prices and the clean energy transition. Oil companies are under pressure from investors to be cautious about investing in new oil exploration, which means a sustained higher oil price is likely. Since the market crash in March 2020, the price of oil is up over 300%, and while oil companies cut their dividends in the aftermath of the crash, I believe that’s unlikely given the huge energy spending required to fuel the transition to renewable energy (since all machines, means of transport, etc. still need oil).
Lockheed Martin (NYSE:LMT) is a defensive company in the truest sense of the word. It manufactures fighter jets and other military weapons, as well as other combat machines. The company has secured revenue as most of its business comes from government contracts. This allows it to pay a 2.6% dividend as it generates significant free cash flow from sales of its military equipment. The company has also been able to invest its profits in space exploration, a fast-growing niche. This offers investors the benefit of secured earnings at a reasonable price-to-earnings ratio of 16x, along with an exciting growth perspective for Lockheed’s business. The company should also benefit from increased government spending on defense due to the Russia-Ukraine war.
Finally, Regeneron Pharma (NASDAQ:REGN) and Bristol Myers Squibb are both extremely cheap, diversified “Big Pharma” companies with strong free cash flow. Both companies’ share prices have remained strong during this year’s market sell-off as investors seek defense in assets with safer revenue streams. Regeneron was underestimated by the market due to the patent expiration of its drug Eylea, used to treat retinal diseases. Once drug patents expire, general pharmaceutical companies can replicate these drugs at a fraction of the price, rendering them worthless to the company that developed them. Some of those patents don’t expire until 2030, and the company has a huge pipeline of potential drugs that could bring more revenue in the future. Both companies have recently seen momentum in their stock prices, and I view them as long-term holdings in my own portfolio.