Dividend stocks are becoming increasingly attractive as market volatility takes hold. Trade concerns and a weakening global economy have struck fear of a recession in the markets. Dividends may protect portfolio income, but it’s important to invest in companies that can provide long term stability.
The following three stocks all offer compelling dividends, and they’re backed by businesses that display strong fiscal management and resilience in changing market conditions.
Honeywell International (NYSE: HON)
Honeywell is a software and industrial company that has diverse interests ranging from aerospace products to security technologies. Revenue growth has been positive for the last four consecutive years, and the company has paid a stable dividend throughout the same period. The yield has ranged from 1.9% to 2.4%, and there have been no decreases. The most recent increase was announced in August 2018 when the quarterly payment was raised by 10.1%.
Honeywell shares have returned 70.9% to shareholders in a five-year period, or 99.1% when including the dividend return. The company has enough cash and assets to meet both short and long-term financial commitments, so the dividend should remain protected even in a pre-recession market.
Oracle Corp. stocks (NYSE: ORCL)
Software and hardware company Oracle Corp. is currently receiving HOLD ratings from most analysts, but its 1.8% dividend yield and fiscal stability could make it a solid pick for cautious investors in August.
Oracle has seen mixed revenue performance in the last four years. Revenue declined year over year in 2016 and 2019 but increased in 2017 and 2018. While earnings do fluctuate, they only do so in a range of $37.05 billion to $39.83 billion. While not particularly impressive in terms of growth, revenue is at least consistent, and profit is high with a 75.49% gross margin.
The dividend last increased in April of this year, when the company raised it by 26.3%.Oracle has returned 28.9% to shareholders in the last five years, or 39.2% when including the dividend return.
Foot Locker Inc. (NYSE: FL)
Foot Locker stock is down -21.18% year to date, making it something of a bargain for new investors. Earnings per share has outperformed analyst expectations for three of the previous four quarters. The company has strong fiscal health, the low stock price gives it value, and the dividend makes it an interesting pick for new investors.
Foot Locker has consistently paid a quarterly dividend for the last five years. The most recent increase was given in April of this year, with a change of 10.1%. The current dividend yield is compelling at 3.63%, especially when paired with a stock price that is well below the 52-week peak. Stock in this company could take months to recover, but an upside will create an even better return for investors who buy on the dip.
Each dividend stock should be considered carefully, while taking all market headwinds like trade and global slowdown into account.
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