- Dividend stocks are a great way to buffer your portfolio against the uncertainty in the market, especially when thinking long-term.
- Bank of New York Mellon (BK) was originally owned by Alexander Hamilton and has been around since 1784.
- Fifth Third Bancorp (FITB) is one of the top regional banks in the country and continues to drive innovation.
- Intel (INTC) remains a premier chipmaker and bringing chipmaking back to the U.S. will help its long-term stability.
- Merck (MRK) may have missed out on the Covid vaccine gold rush but it remains one of the top drug companies in the world.
- Amgen (AMGN) is the kind of biotech all biotech hopefuls want to grow up to be, with plenty of drugs in the market and in the pipeline.
- Morgan Stanley (MS) has proven to be both one of the most durable financial services companies and one of the most profitable, decade after decade.
- T Rowe Price (TROW) might not be one of the big Wall Street names but it has been delivering for its clients and shareholders more than eight decades.
As stocks devolve towards bear market territory and the global economic picture remains in the “uncertainty” camp, many investors want safety and security. That’s why dividend stocks are the perfect choice for long-term investors.
Buying dividend stocks isn’t a bet on the short term. They’re long-term choices where dividends and steady growth top the list of priorities. These stocks have been around for decades, some for centuries.
Their staying power means they understand that fads are exciting, but they don’t necessarily build the bottom line for a sustainable long-term future. This is somewhat refreshing given the start-ups that have flooded the market in recent years and sport massive market caps after just a few years on the exchanges.
These are foundational companies that have been at the roots of their sectors. They have the necessary attributes to continue to grow through good and bad markets. They also provide reliable, income along the way.
| BK | Bank of New York Mellon | $43.48 |
| FITB | Fifth Third Bancorp | $35.87 |
| INTC | Intel | $42.47 |
| MRK | Merck | $92.36 |
| AMGN | Amgen | $245.99 |
| MS | Morgan Stanley | $80.97 |
| TROW | T Rowe Price | $121.84 |
Bank of New York Mellon (BK)
Not only does Bank of New York Mellon (NYSE:BK) carry the powerful banking name of the Mellon family — and of course the prestigious Carnegie Mellon University — but its lineage goes back to the founding fathers. Alexander Hamilton founded the bank in 1784, and this bank has been operating since before the Constitution was finalized.
Right now, a lot of banks, big and small, are trying to gain their footing as the economy and interest rate environments are very dynamic. Uncertainty is poison for the markets. And banks haven’t been immune to this uncertainty. That has hit big banks, including BK.
But that doesn’t spell doom for BK stock. On the contrary, it has been through more severe contractions and headier expansions than we’ve been through recently. And through it all, it has emerged stronger.
BK stock has lost 25% year to date and it’s carrying a price-to-earnings ratio (P/E) of 11. This is a great opportunity to add this stock to your nest egg for the long term. It currently has a rock-solid 3.1% dividend.
This stock has a “B” rating in my Dividend Grader.
Fifth Third Bancorp (FITB)
After the big national banks, the next tier is regional banks. These are banks that operate in a number of states around a geographical region. At this point for Fifth Third Bancorp (NASDAQ:FITB), it nearly covers two regions.
It has locations in Ohio, Kentucky, Indiana, Michigan, Illinois, Tennessee, West Virginia, North and South Carolina, Georgia, and Florida. That’s most of the Midwest and South, east of the Mississippi River.
But that growth has taken time. It wasn’t a massive private equity fueled buying spree. The bank has been around since 1858 and has spent decades methodically growing it operation.
FITB stock has lost 18% year to date and now trades with a P/E of 10. It has a 3.4% dividend and is well situated in states where companies — and their workers — are moving into.
This stock has an “A” rating in my Dividend Grader.
Intel (INTC)
We’ve been hearing a lot about the semiconductor chip shortage this year. Well, Intel (NASDAQ:INTC) is the world’s largest chipmaker. That means it’s the largest victim of this issue, as well as the biggest beneficiary once it’s resolved.
What’s more, when most other chipmakers when “fabless” INTC continued to build its own chips.
Fabless chipmakers engineer the chips — usually in the U.S. or Europe — and then ship the specs to Asia for manufacturing, since a chip plant these days has a cost in the billions of dollars. That’s a massive expense, and fabless players don’t have to deal with that issue.
However, they’re now worse off due to the supply chain collapse. Now, everything is more expensive, and the chip foundries are starting and stopping production time and again. In the midst of all this, INTC announced it was going to build at least one if not more foundries in the U.S. That likely comes with massive tax breaks and federal subsidies as well.
INTC stock is down 18% year to date, but that’s not bad compared to many of its competitors. It also has a 3.4% dividend that will continue to help compound the cash in your portfolio.
This stock has an “A” rating in my Dividend Grader.
Merck (MRK)
Merck (NYSE:MRK) has been a drug maker since 1891. It has both a human health and an animal health division. The latter has become ever more important due to the economic devastation brought by recent animal-borne diseases from Covid-19 to the avian flu to African swine fever.
While the pandemic is a fresh memory of Covid-19’s power, rising egg and poultry prices in the U.S. are partially due to a fast-moving avian flu. And ASF was crushing the Chinese economy in the summer and fall of 2019.
But vaccines aren’t where the money is for big pharmaceutical companies. It’s drugs. And MRK has always been at the center of innovation. Its Keytruda was one of the first cancer immunotherapy drugs to get approval from the U.S. Food and Drug Administration. That means it was researching these drugs long before the public ever imagined these drugs were possible.
MRK stock has gained 20% year to date, as healthcare beyond the pandemic returns to normalcy. It still trades at a bargain 17 P/E and has a stalwart 3% dividend.
This stock has an “A” rating in my Dividend Grader.
Amgen (AMGN)
Amgen (NASDAQ:AMGN) has been in the biotech space since 1980. And its $130 billion-plus market cap makes it a biotech that’s as big as some significant big pharma drug makers.
In the current market, investors are focused on companies that can deliver. The speculative bubble has burst, so money isn’t flowing into niche biotechs that have a cool technology. In the past market, they were buyout candidates or could get massive funding from private equity firms.
Now, everyone is keeping their cash closer to their vests. And the attractive drug companies are those with proven track records, a healthy portfolio drugs, and a strong pipeline. AMGN fits that bill to a T.
The stock has gained 9% year to date, has a P/E of 24 and a very reliable 3.2% dividend.
This stock has an “A” rating in my Dividend Grader.
Morgan Stanley (MS)
One of the realities of the markets is that the big institutional players like Morgan Stanley (NYSE:MS) don’t just do well when the markets are going up. They make money when investors are active, either moving money around, pulling it out or funneling it in.
They can use that cash flow to position their accounts as well as work complex cross-hedging across stock, bond and derivatives markets. As long as that momentum is moving, the direction isn’t as crucial as volume.
And right now, MS and others are staying busy. Financial services companies have sold off a little this year as broad selling is the first wave of market readjustments. But lumping banking stocks and financial services companies together isn’t always apples and oranges. For example, MS isn’t particularly interest in the traditional banking sector and continues to focus on its investment banking strengths. That focus will pay dividends (pardon the pun) in the long-term.
Given that MS has been around since 1924, it understands the long term. Currently MS stock is down 18% year to date. But it has a generous and trustworthy 3.4% dividend and is trading at a P/E of 10.
This stock has an “A” rating in my Dividend Grader.
T Rowe Price (TROW)
Like MS, T Rowe Price (NASDAQ:TROW) is a financial services company that has been around since 1937. But unlike most of its peers, TROW isn’t a Wall Street firm. Its headquarters has always been in Baltimore, Maryland.
The logic is that there’s too much group think among all the firms on the Street. By operating out of Baltimore, TROW can think for itself and stick to its view of the markets without undue influence from competitors.
With a $28 billion market cap, it’s not a major player, but it’s a well established one. Much of its business is focused on its family of funds — for consumers and companies – and managing institutional money.
The current selloff has hit its assets under management, which has hit the stock pretty hard. TROW stock is down 38% year to date. But this is the kind of company that knows how to weather the storms, which is why it’s very attractive now. And its 3.8% dividend is an investment in your patience.
This stock has an “A” rating in my Dividend Grader.
On the date of publication, Louis Navellier has a position in AMGN in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.