With interest rates finally rising, investors who depend on bonds for regular income face a real danger. Sure, your monthly income might go up a bit, but if bond prices plummet, you could soon find yourself staring at some big fat losses. As an alternative to bonds, I recommend that you invest in a diversified portfolio of some of the market’s best dividend-paying stocks.
Some of these stocks pay dividends quarterly and some even pay monthly, so the end result of a broadly diversified portfolio can be a steady stream of dividends that you can use for regular income.
In addition, if you’ve chosen your stocks wisely, the prices of dividend stocks themselves can rise, which means you get the best of both worlds—steady income and capital appreciation too!
The world of dividend-paying stocks is ever expanding.
To help sort through it all, our experts have some tips on where to find them, what to look for, and a list of some of their favorite dividend stocks that are hot this month.
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For example, I currently have 19 stocks in my Cabot Stock of the Week portfolio. Eight of these stocks pay dividends.
If you’d bought these eight stocks when my readers did, you’d currently be looking at an annual yield of 4.3%, which is not bad in today’s environment.
Plus, you’d have accumulated capital appreciation in those eight stocks—all but one of which was bought this year—of 15%!
To me, these are eight of the best dividend-paying stocks out there. So let me tell you about them in a bit more detail.
My Eight Best Dividend-Paying Stocks
Best dividend-paying stock #1 is a stock that I recommended just two weeks ago. We already have a profit of 2% in the stock, but that’s chicken feed compared to what I think we’ll end up with. The reason: this well-known retailer is in the middle of a turnaround, and as it comes out of its slump, earnings will soar and investors will come running. So I’m recommending that readers buy it right now before earnings improve. The stock yields an amazing 5.2%.
Best dividend-paying stock #2 is a Chinese stock that I first recommended back in March. It’s had a good run; our profits are now 44%. But I’m still recommending it to new readers because I still believe in its long-term growth potential. And you will too, once you understand its business model. This company is the no. 1 operator of hotels in China—a business that is virtually guaranteed to grow in the years ahead. Plus, the stock pays a nice 1.3% dividend.
Best dividend-paying stock #3 is a pipeline operator that pays a fat 6.2% dividend. Plus, the stock has been very strong over the past month, first because of investor expectations that the new Republican administration will be more accommodating to traditional industries, and second because OPEC is looking serious about keeping prices high. Since I recommended this stock in July, our profit is a healthy 6%.
Best dividend-paying stock #4 is a major stock exchange operator that my readers have been holding since July of 2015, with profits of 32%. The stock yields an incredible 7.1%! Sadly, I’m not recommending it to new readers, because it’s too high. But I’m looking for another just like it!
Best dividend-paying stock #5 is a stockbroker you’ve almost certainly heard of; it’s one of the good ones. I first recommended this dividend stock in late October, so our profits aren’t big yet, just 2%. But the future is bright as this bull market gets rolling, and in the meantime there’s a healthy 3.4% dividend.
Best dividend-paying stock #6 is a major drug manufacturer that yields 4.3%. This one too was bought recently, so we don’t have a profit yet—in fact we have a small loss of 3%. But the chart says that after two years of consolidation, this stock is due for a major breakout. I suggest you buy it now, enjoy the dividends, and wait with me.
Best dividend-paying stock #7 is a steelmaker, and thus smack in the middle of a sector that will boom if infrastructure spending ramps up in the years ahead. Its dividend is “only” 1.5%, but the real action here is in the stock. I recommended it in early November (just before the election), and readers who followed my advice are now looking at profits of 32%! I still rate it Buy.
Best dividend-paying stock #8 is a big multinational oil company that yields 5.4% and has brought us a profit of 6% in the less than a month since I recommended it. This one is still a great value, but it won’t be for long.
Summary: With interest rates going up and bond prices falling, investors who want steady dividends need to look at the best dividend-paying stocks, which means dividend payers with the potential to bring their owners major capital appreciation.
The best place to get them is my advisory, Cabot Stock of the Week, which brings you my cherry-picked selections from seven other Cabot advisories, every week.
For more information, click here now.
But don’t wait. This bull market is rolling.