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Barron's: 4 Dividend Stocks for Volatile Times Ahead

Barron's: 4 Dividend Stocks for Volatile Times Ahead

By    |   Tuesday, 14 May 2019 08:12 AM

With economic uncertainty being fueled be the seemingly endless U.S.-China trade-tariff confrontation, shrewd investors might want to seek out dividend stocks in an attempt to survive any fallout.

“It makes sense to be positioned a little more defensively right now,” Thomas Huber, portfolio manager of the T. Rowe Price Dividend Growth fund (PRDGX) told Barron's.

“You can make a good case for that. All you have to do is look back at the fourth quarter and see what happened,” Huber said.

Stocks of companies that pay robust and growing dividends are generally less volatile in times of market turmoil, Barron's explained.

Dividends, especially those that are growing and are well covered by cash flows, can provide steady income in times of uncertainty, Barron's said.

“With the Fed on hold, one of the principal arguments against dividend-paying stocks has disappeared,” says Jeremy J. Siegel, a finance professor at the Wharton School at the University of Pennsylvania and senior investment strategy adviser to WisdomTree, whose exchange-traded funds include dividend funds.

Here is a look at four of the companies suggested by Barron's, culled from interviews with several fund managers, that should be able to keep growing their dividends.

  1. Sempra Energy (SRE): It operates two large regulated utilities in Southern California: San Diego Gas & Electric and Southern California Gas. And it has made investments to modernize and protect its electric and gas transmission and distribution systems from wildfires, says T. Rowe Price’s Huber.  
  2. JPMorgan Chase (JPM): JPMorgan has a “very diverse group of businesses that really allow it to operate through the economic cycle,” says says Michael Barclay, a senior portfolio manager at Columbia Threadneedle Investments. 
  3. NextEra Energy (NEE ): NextEra has “a growing utility business and a nonregulated growth platform with its renewable business,” says Huber of T. Rowe Price. 
  4. Air Products & Chemicals (APD): CEO Seifollah Ghasemi told analysts in January that Air Products plans to return about $1 billion in cash to shareholders over the next year. In February, he said that “we are returning about half of our free cash to the shareholders in terms of the dividend.”

To be sure Newsmax Finance Insider Charles Sizemore recently admitted he realized that dividends aren't for every investor.

"Dividends are almost inconsequential these days compared to the returns realized from rising stock prices," he wrote. "Very few sexy, high-growth tech companies pay dividends. Amazon, Facebook, and Alphabet (Google) certainly don’t, and none have immediate plans to start," he explained.

"When you focus on dividends, you don’t have to worry as much about capital gains. Sure, you want to see your account rise over time. But you don’t need it to."

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With economic uncertainty being fueled be the seemingly endless U.S.-China trade-tariff confrontation, shrewd investors might want to seek out dividend stocks in an attempt to survive any fallout.
barron’s, dividend, stocks, volatile, times
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2019-12-14
Tuesday, 14 May 2019 08:12 AM
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