What Stocks to Buy for the Best Dividends in 2017
The stock market has always been vulnerable to changes in the domestic and foreign policies of the government and the recent presidential election has a significant impact on dividend stocks as well. So, let’s analyze how the new political environment is going to influence the dividend rate the companies are paying to their stockholder.
As a form of asset, stocks that pay dividends are appealing to investors. Stock prices come under pressure when interest rate is up. It means that earnings on dividend stocks increase when the price of shares is depressed. This is a great opportunity to gain extra profit. It should be noted that to get the most from the dividend-paying stocks the investment should be long-term. On the other hand, with the market rising all equities will benefit anyway and long-term investors can always count on good dividends.
To make a sound investment it is essential to know which way the political winds are blowing. With Donald Trump as the President of the U.S. a number of industries are sure to experience big changes, with some dividend stocks increasing in prise. Keep in mind that soaring profits enable companies to pay higher dividends to shareholders.
Dividend yield: 4.9%
For the highest dividends your best bet is the telecommunications sector. The company worth considering is Verizon Communications Inc. (VZ) that has made some interesting moves recently. It purchased the core properties of Yahoo! Inc. (YHOO) to increase revenues and enhance its future position. Among the most recent company’s acquisitions is AOL. These newly acquired properties allow VZ to grow its digital content and advertising technology. Main competitor AT&T Inc. (T) also has big dividends, but now when Donald Trump became President its plans to purchase DirecTV may fall through.
Dividend yield: 4%
The financial forecast for the pharmaceutical sector is generally quite positive. Hillary Clinton promised to slow down the increase of drug prices. This means many pharma stocks with dividend gains will become an excellent investment in 2017.
The position of AbbVie Inc. (ABBV) on the market is getting better after the election. Slow-but-steady stock growth is a guarantee of success. Currently it is not clear whether a Trump administration will approve mergers and acquisitions or not, but this is an important part of the industry. In June AbbVie acquired Stemcentrx and thus enlarged its oncology treatment spectrum. The question is whether the company will manage to make such moves in the future. Anyway, AbbVie is a great investment. Even though it has been on the market since 2013, and its payout has increased by over 40% during such short period of time.
Dividend yield: 4%
Chevron Corporation (CVX) and other energy companies are going to flourish with a pro-fossil fuel policy. Even though oil prices seem to have stabilized their cyclical pattern is a well-known fact. And the industry major offers a sort of safeguard against a slack in crude oil industry. With a dividend gain of over 4% Chevron looks really good in a low interest rate surrounding. Patient investors are sure to benefit most as they can look forward to a steady dividend stream. Despite ups and downs of the energy market, CVX managed to increase its dividend for 30 years in business.
Dividend yield: 3.6%
Pfizer Inc. (PFE) is another pharma giant worth being included in your equity income portfolio. Currently the company has 94 clinical studies under way. In addition, it purchased Medivation Inc. for $14 billion and Anacor Pharmaceuticals Inc. for $5.2 billion. The former substantially enhanced PFE’s oncology portfolio while the latter allowed PFE to get crisaborole — a new non-steroid eczema treatment.
Dividend yield: 3%
The sound strategy of General Electric Company (GE) is sure to bring great yield to those investors who think long-term and are patient enough to wait for the better times. Now when the oil and gas industry is depressed General Electric is trying to withstand the financial constrains by merging Baker Hughes Incorporated (BHI). Due to this merger the company positions itself aside from the oil and gas business and this helps alleviate much of the macroeconomic risk from the industry. While macro risks may become worse, do remember that they’re cyclical, as well.
Dividend yield: 3%
Wells Fargo & Co. (WFC) was a good business to invest into even before the election. Despite its phony accounts scandal, it remains a successful company with a quality stock. Bank crises are temporary and this is going to pass as well. Shares in WFC dropped to $46 from $5, but the dividend increased to a very good level. If the banks are allowed to return to proprietary trading in 2017, the bottom line will inevitably boost.
Dividend yield: 2.8%
Merck & Co., Inc. (MRK) is an attractive pharma company to invest to get better-than-average yield. The year 2016 has been rather profitable for this Big Pharma company that reported gains of over 20%. With the yield on the dividend about 3% the company’s strategy works well. Like all pharma giants, MRK uses mergers and acquisitions to fuel its growth and remain cost effective. Now Merck has five drugs that are in review by regulatory agencies, in addition to a number of late-stage and mid-stage programs.