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Wall Street recently saw the best January in nearly 30 years. Both the S&P 500 and Dow advanced more than 7% last month, registering their biggest gains since January 1987 and January 1989, respectively. And it was widely anticipated that the positive earnings season and the Fed’s dovish stance will provide momentum to stocks in February.
However, worries over U.S.-China trade relations and slower global economic growth laid the base for a tumultuous February. In fact, a gauge of stock market gyration, known as Wall Street’s fear gauge, recently suggested that the markets are walking a tightrope.
With the month expected to be rough, investing in sound dividend paying stocks seems judicious. Such stocks provide steady income and cushion one’s portfolio against market risks.
What’s Dragging the Market?
Trade war concerns arise after National Economic Council Director Larry Kudlow said at an interview with Fox Business Network that there is a long way to go before both the United States and China strike a trade agreement. He said that there was a “pretty sizable distance” before reaching a deal.
Kudlow further said that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin’s next visit to China may possibly not result in some of the agreement even being drafted. He added that “when those two gentlemen, they are very experienced folks, when they get there, we’ll see. At the moment we have not had the papering of any of these discussions. So as I say, they’re going to be probing and continuing conversations.”
Trump and China’s Xi Jinping’s meeting, in fact, isn’t likely before a Mar 1 deadline and the United States is expected to keep tariffs at 10% rather than increasing it to 25% as scheduled. Nonetheless, trade tensions between the United States and China are raising a lot of concern among investors. After all, tariffs do squeeze corporate profits and hamper growth.
An array of weak global economic data isn’t soothing investors’ nerves as well. Both the Bank of England (BOE) and the European Commission (EC) offered discouraging outlooks, reaffirming growing concerns about the health of Europe’s economy.
Recently, BOE left rates unchanged and has lowered its GDP estimate for 2019 to 1.2% from the earlier 1.7%. The current level, rather, reflects the weakest growth since 2009. The EC also trimmed its forecast for 2019 Eurozone growth to 1.3%, down from the previous forecast of 1.9%. Germany’s weaker-than-expected industrial data was cited to be the primary reason behind this dismal forecast. By the way, Italy’s high debt burden is raising questions over the health of the country’s finances.
February Could be Cruel: Buy 5 Top Dividend Stocks Now
With so many concerns plaguing investors’ minds, dividend paying stocks are tempting options at the moment. The best dividend stocks pay out a healthy yield and have strong prospects, and are less susceptible to market gyrations. Their large customer base, sustainable business model, long track of profitability and strong liquidity allow them to offer sizable yields on a regular basis, regardless of market direction.
While finding companies that offer these traits isn’t easy, they do exist. To help you find these businesses, we have selected five dividend payers with a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
American Airlines Group Inc. (AAL - Free Report) operates as a network air carrier. The company has a Zacks Rank #2 and a VGM Score of B. American Airlines has a dividend yield of 1.09%, while its five-year average dividend yield is pegged at 0.85%. The Zacks Consensus Estimate for its current-year earnings rose 12.3% in the past 60 days. The stock’s expected earnings growth rate for the current year is 30.8%, higher than the Transportation - Airline industry’s projected return of 4.8%. The company has outperformed the broader industry so far this year (+12.6% vs +10.5%).
Allison Transmission Holdings, Inc. (ALSN - Free Report) designs, manufactures, and sells commercial and defense fully-automatic transmissions for medium- and heavy-duty commercial vehicles, and medium- and heavy-tactical defense vehicles. The company has a Zacks Rank #2 and a VGM Score of A. Allison Transmission has a dividend yield of 1.24%, while its five-year average dividend yield is pegged at 1.75%. The Zacks Consensus Estimate for its current-year earnings rose 0.2% in the past 60 days. The stock’s expected earnings growth rate for the current year is 73.7%, higher than the Automotive - Original Equipment industry’s projected return of 4.4%. The company has outperformed the broader industry over the last one-year period (+14.7% vs -21.6%).
AVX Corporation manufactures, supplies, and resells various electronic components, interconnect devices, sensing and control devices, and related products. The company has a Zacks Rank #1 and a VGM Score of B. AVX has a dividend yield of 2.53%, while its five-year average dividend yield is pegged at 2.88%. The Zacks Consensus Estimate for its current-year earnings rose 9.7% in the past 60 days. The stock’s expected earnings growth rate for the current year is 97.5%, higher than the Electronics - Miscellaneous Components industry’s estimated return of 1.2%. The company has outperformed the broader industry on a year-to-date basis (+16.1% vs +13.0%). You can see the complete list of today’s Zacks #1 Rank stocks here.
CrossAmerica Partners LP (CAPL - Free Report) engages in the wholesale distribution of motor fuels, and ownership and leasing of real estate used in the retail distribution of motor fuels. The company has a Zacks Rank #2 and a VGM Score of A. CrossAmerica Partners has a dividend yield of 11.91%, while its five-year average dividend yield is pegged at 9.28%. The Zacks Consensus Estimate for its current-year earnings moved up 100% in the past 60 days. The stock’s expected earnings growth rate for the current year is 150%, higher than the Oil and Gas - Refining and Marketing - Master Limited Partnerships industry’s projected return of 13%. The company has outperformed the broader industry so far this year (+22.5% vs +18.1%).
Ennis, Inc. (EBF - Free Report) designs, manufactures, and sells business forms and other business products. The company has a Zacks Rank #1 and a VGM Score of B. Ennis has a dividend yield of 4.41%, while its five-year average dividend yield is pegged at 4.26%. The Zacks Consensus Estimate for its current-year earnings rose 5% in the past 60 days. The stock’s expected earnings growth rate for the current year is 13.9%, higher than the Office Supplies industry’s projected return of 6.8%. The company has outperformed the broader industry over the last one-year period (+2.0% vs -7.0%).
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
5 Top Dividend Stocks to Brace a Dicey February
Wall Street recently saw the best January in nearly 30 years. Both the S&P 500 and Dow advanced more than 7% last month, registering their biggest gains since January 1987 and January 1989, respectively. And it was widely anticipated that the positive earnings season and the Fed’s dovish stance will provide momentum to stocks in February.
However, worries over U.S.-China trade relations and slower global economic growth laid the base for a tumultuous February. In fact, a gauge of stock market gyration, known as Wall Street’s fear gauge, recently suggested that the markets are walking a tightrope.
With the month expected to be rough, investing in sound dividend paying stocks seems judicious. Such stocks provide steady income and cushion one’s portfolio against market risks.
What’s Dragging the Market?
Trade war concerns arise after National Economic Council Director Larry Kudlow said at an interview with Fox Business Network that there is a long way to go before both the United States and China strike a trade agreement. He said that there was a “pretty sizable distance” before reaching a deal.
Kudlow further said that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin’s next visit to China may possibly not result in some of the agreement even being drafted. He added that “when those two gentlemen, they are very experienced folks, when they get there, we’ll see. At the moment we have not had the papering of any of these discussions. So as I say, they’re going to be probing and continuing conversations.”
Trump and China’s Xi Jinping’s meeting, in fact, isn’t likely before a Mar 1 deadline and the United States is expected to keep tariffs at 10% rather than increasing it to 25% as scheduled. Nonetheless, trade tensions between the United States and China are raising a lot of concern among investors. After all, tariffs do squeeze corporate profits and hamper growth.
An array of weak global economic data isn’t soothing investors’ nerves as well. Both the Bank of England (BOE) and the European Commission (EC) offered discouraging outlooks, reaffirming growing concerns about the health of Europe’s economy.
Recently, BOE left rates unchanged and has lowered its GDP estimate for 2019 to 1.2% from the earlier 1.7%. The current level, rather, reflects the weakest growth since 2009. The EC also trimmed its forecast for 2019 Eurozone growth to 1.3%, down from the previous forecast of 1.9%. Germany’s weaker-than-expected industrial data was cited to be the primary reason behind this dismal forecast. By the way, Italy’s high debt burden is raising questions over the health of the country’s finances.
February Could be Cruel: Buy 5 Top Dividend Stocks Now
With so many concerns plaguing investors’ minds, dividend paying stocks are tempting options at the moment. The best dividend stocks pay out a healthy yield and have strong prospects, and are less susceptible to market gyrations. Their large customer base, sustainable business model, long track of profitability and strong liquidity allow them to offer sizable yields on a regular basis, regardless of market direction.
While finding companies that offer these traits isn’t easy, they do exist. To help you find these businesses, we have selected five dividend payers with a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
American Airlines Group Inc. (AAL - Free Report) operates as a network air carrier. The company has a Zacks Rank #2 and a VGM Score of B. American Airlines has a dividend yield of 1.09%, while its five-year average dividend yield is pegged at 0.85%. The Zacks Consensus Estimate for its current-year earnings rose 12.3% in the past 60 days. The stock’s expected earnings growth rate for the current year is 30.8%, higher than the Transportation - Airline industry’s projected return of 4.8%. The company has outperformed the broader industry so far this year (+12.6% vs +10.5%).
Allison Transmission Holdings, Inc. (ALSN - Free Report) designs, manufactures, and sells commercial and defense fully-automatic transmissions for medium- and heavy-duty commercial vehicles, and medium- and heavy-tactical defense vehicles. The company has a Zacks Rank #2 and a VGM Score of A. Allison Transmission has a dividend yield of 1.24%, while its five-year average dividend yield is pegged at 1.75%. The Zacks Consensus Estimate for its current-year earnings rose 0.2% in the past 60 days. The stock’s expected earnings growth rate for the current year is 73.7%, higher than the Automotive - Original Equipment industry’s projected return of 4.4%. The company has outperformed the broader industry over the last one-year period (+14.7% vs -21.6%).
AVX Corporation manufactures, supplies, and resells various electronic components, interconnect devices, sensing and control devices, and related products. The company has a Zacks Rank #1 and a VGM Score of B. AVX has a dividend yield of 2.53%, while its five-year average dividend yield is pegged at 2.88%. The Zacks Consensus Estimate for its current-year earnings rose 9.7% in the past 60 days. The stock’s expected earnings growth rate for the current year is 97.5%, higher than the Electronics - Miscellaneous Components industry’s estimated return of 1.2%. The company has outperformed the broader industry on a year-to-date basis (+16.1% vs +13.0%). You can see the complete list of today’s Zacks #1 Rank stocks here.
CrossAmerica Partners LP (CAPL - Free Report) engages in the wholesale distribution of motor fuels, and ownership and leasing of real estate used in the retail distribution of motor fuels. The company has a Zacks Rank #2 and a VGM Score of A. CrossAmerica Partners has a dividend yield of 11.91%, while its five-year average dividend yield is pegged at 9.28%. The Zacks Consensus Estimate for its current-year earnings moved up 100% in the past 60 days. The stock’s expected earnings growth rate for the current year is 150%, higher than the Oil and Gas - Refining and Marketing - Master Limited Partnerships industry’s projected return of 13%. The company has outperformed the broader industry so far this year (+22.5% vs +18.1%).
Ennis, Inc. (EBF - Free Report) designs, manufactures, and sells business forms and other business products. The company has a Zacks Rank #1 and a VGM Score of B. Ennis has a dividend yield of 4.41%, while its five-year average dividend yield is pegged at 4.26%. The Zacks Consensus Estimate for its current-year earnings rose 5% in the past 60 days. The stock’s expected earnings growth rate for the current year is 13.9%, higher than the Office Supplies industry’s projected return of 6.8%. The company has outperformed the broader industry over the last one-year period (+2.0% vs -7.0%).
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>