If it’s income you’re looking for, The Motley Fool have 7 prime candidates for your portfolio
For years, many investors have been chasing dividend stocks. Now the market is giving you a chance to buy many of your favourites at bargain-basement prices — and the bargains may not last for very long.
Getting in whilst the going’s good
It’s been years since we’ve seen this much uncertainty in the financial markets.
Uncertainty may be bad for your current investments, but it’s great if you have cash and are trying to figure out how to get into the market.
Many have targeted dividend-paying stocks for their new investing money, as their combination of solid current income and good growth prospects — combined with some defensive properties that help many of them hold up well during downturns — is perfectly suited to the current market environment.
It’s time to buy!
With the ASX/S&P 200 down around 10% in the last month, there has been no place to hide.
To get a sense of the carnage, we looked at stocks offering a dividend yield of 4% or more that have lost at least 10% in the past month. Here were seven that caught our eye:
|Company||Dividend Yield||1-month return|
|Wesfarmers (ASX: WES)||4.9%||(11%)|
|Westfield Group (ASX: WDC)||6.2%||(13%)|
|QBE Insurance (ASX: QBE)||9.0%||(22%)|
|ASX Limited (ASX: ASX)||6.3%||(10%)|
|Platinum Asset Management (ASX: PTM)||6.7%||(15%)|
|Flight Centre (ASX: FLT)||4.7%||(13%)|
|JB Hi-Fi (ASX: JBH)||5.3%||(11%)|
Source: Capital IQ, a division of Standard & Poor’s.
Most of these share price drops are just the result of general concerns about the economy. But these are all solid blue-chip Australian shares.
The possibility of an economic slowdown, both here and globally, could affect each of these companies, but over the long-term, they should continue to build shareholder value, as each of them has already done in years gone by.
Get ’em while they’re cheap
Sure, short-term concerns are valid. Moreover, just because these stocks have dropped doesn’t mean they’re the best buys out there. You may find less severely marked-down dividend stocks with attributes you like better.
The key point, though, is that if you have a long-term time horizon, what the economy does over the next couple of years isn’t the most important consideration.
If you can pick up shares at a temporarily low price just because a bunch of short-term traders can’t be bothered to look at their future prospects, you’ll likely end up a winner.
Motley Fool staff and freelancers may have interests in any of the stocks mentioned in this report. These interests can change at any time. The Motley Fool has a living, breathing disclosure policy.