As of midnight this morning, the U.S. boosted tariffs on $200 billion worth of Chinese goods from 10% to 25%. The markets had expected this to be the week that this deal got done, but it blew up instead, and no one is sure how it ends at this point. It seems the market is still hoping for the best, while hedging for bad news. But it certainly hasn’t priced in a worst-case scenario … yet.
A couple positives: The tariffs don’t hit until the current fleet of cargo ships that left port as of the deadline hit U.S. shores. That gives the parties a softer deadline of about 3-4 weeks to hammer something out before the tariffs take effect.
And remember, regardless of the rhetoric, this is going to hit U.S. consumers and business. The companies will be paying more for goods and passing those prices on to consumers. It hits China, too, but the lion’s share is out of U.S. pocketbooks.
Second, economic numbers out of China have been trending down. That means they may be more interested in cutting a deal than they were when their numbers were coming in well above average.
Regardless of how it pans out, it’s a good time to add some income to your portfolio. These 7 dividend stocks to buy as the trade war reignites all get As in my Portfolio Grader for their momentum and rank high for fundamentals as well. They’re great long-term foundation stocks.
Best Dividend Stocks: Blackstone Group LP (BX)
Dividend Yield: 5.5%
Blackstone Group (NYSE:BX) is a private equity firm that specializes in alternative investments (like real estate, infrastructure, etc), hedge funds and investment funds — including closed-end funds — for institutions and high-net-worth individuals.
Set up as a limited partnership, it means investors are direct owners that participate in the company’s net profits in the form of dividends. Its current dividend is a healthy 5.5% in the past year, and that’s on top of a nearly 25% run for the stock in the past 12 months. That’s a very respectable return on one of the world’s top private equity firms that sports a $47 billion market cap.
BX is built for a slow-growth economy. What’s more, if a full-blown trade war does show up, this is the kind of stock that institutions will flock to for shelter from any storms.
Dominion Energy (D)
Dividend Yield: 5%
Dominion Energy (NYSE:D) is one of the top electric utilities on the East Coast. Its primary market is Virginia, but it has reach into neighboring states and its unregulated business has prized assets like its Cove Point liquified natural gas (LNG) export facility in Maryland.
Cove Point is the only LNG export facility on the East Coast at this point and one of only three import and storage facilities. This is a huge asset that grows in value for the utility every year, given the demand for natural gas in Europe, where prices are significantly higher.
D also has a very good relationship with Virginia regulators, so that side of the business is strong.
While the stock is up a solid 18% in the past 12 months, its rock-solid dividend kicks in another 5% on top of that. Its Mid-Atlantic Pipeline project has hit some snags, but the President Donald Trump administration is prepared to get the project done one way or the other.
Darden Restaurants (DRI)
Source: Mike Mozart via Flickr (Modified)
Dividend Yield: 2.5%
Looking for restaurant dividend stocks? Darden Restaurants (NYSE:DRI) sold its iconic Red Lobster seafood chain about 5 years ago now, and it hasn’t looked back.
Remember, it still owns Olive Garden and LongHorn Steakhouse chains at the “everyman” level and high-end spots like Eddie V’s and Capitol Grille. What’s more, it has some mid-priced boutique restaurants like Seasons 52, Bahama Breeze and Yard House in there as well.
The point is, losing Red Lobster was a great opportunity to pivot into new markets and develop new ideas. And given the fact DRI stock started way back in 1938, staying nimble and seeing the next big thing coming along is part of its DNA.
Given the continued strong economy — more money for consumers to go out for bite more often — its 33% return is impressive, but not surprising. There’s more of that to come. Its reliable 2.5% dividend isn’t a bell-ringer, but it shows that the company is investor friendly and that it can deliver, come what may.
Hormel Foods (HRL)
Source: Mike Mozart via Flickr (Modified)
Dividend Yield: 2.1%
Hormel Foods (NYSE:HRL) began in 1891 in Austin, Minnesota, as a meat packing business that started national expansion ahead of the competition.
Not only did HRL produce the first canned ham in the U.S., but it transformed that business by the 1930s into brands that live on today like Hormel Chili, Dinty Moore Stew and SPAM. Remember, this was at the height of the Depression and HRL was actually expanding its product line downwards so that people could buy cheap, quality food products.
By the late ‘30s, HRL had introduced profit sharing for its employees.
And that sense of loyalty combined with innovation has continued at the company. It now owns natural meat brands like Columbus and Applegate, as well as ethnic brands like Chi-Chi’s, Embasa and Del Fuente. It even has its Hormel fuse burger brand that’s a lean protein burger with whole grains and veggies.
This is a competitive sector, but HRL has proven it can compete and endure where others flame out. Its 2.1% dividend is as reliable as sunrise; it’s a great long-term foundation stock.
Realty Income (O)
Dividend Yield: 4%
Realty Income (NYSE:O) is a real estate investment trust (REIT) that owns and operates properties for some of the biggest retail names in the business.
Bear in mind, it doesn’t operate big malls, but generally stand-alone properties. It’s top 5 tenants, in order, are Walgreens (NASDAQ:WBA), 7 Eleven, FedEx (NYSE:FDX), Dollar General (NYSE:DG) and LA Fitness. Its longer list of tenants is equally impressive.
What’s more, O pays its dividend monthly rather than quarterly, so it’s a great choice for income seekers that want to diversify their income stream. Right now, it’s delivering a 4% dividend that has been rock-solid for many years.
And on the growth side, O stock is up 28% in the past 12 months. Given the slow-growth economy ahead, that’s just the tip of its potential. REITs are one of the hottest sectors for 2019 and beyond.
Kinder Morgan (KMI)
Source: Roy Luck via Flickr
Dividend Yield: 5.1%
Kinder Morgan (NYSE:KMI) calls itself an energy infrastructure company, but what that means in laymen’s terms is it’s a major midstream energy company. Boiled down further, it’s a energy pipeline and storage company.
And that is a very good business to be in these days.
Granted, it wasn’t an easy path to get here. KMI used to be one of the first master limited partnerships in the burgeoning energy industry at the turn of the 21st Century. But when energy prices tanked and supply dried up, KMI dumped its MLP structure and became a corporation. That was 2014.
Now, the stock is back, along with energy demand both domestic and abroad. And KMI is once again delivering an outsized dividend, just like in the good ol’ days.
Currently KMI stock, which is up 18% for the year, is paying out a healthy and sustainable 5.1% dividend. And if this slow, steady economic growth continues, so will the returns for KMI stock and many of its fellow dividend stocks.
Dividend Yield: 2.9%
Qualcomm (NASDAQ:QCOM) may seem like an odd stock to be in a short list of dividend stocks, but it actually makes a lot of sense.
First, QCOM, one of the leading mobile chip and equipment makers and licensing companies, has paid a dividend for a pretty long time.
Second, now that all its lawsuits are over, QCOM is ready for the next wave of mobility technology products.
Recently, the Justice Department interceded in a case before the Federal Trade Commission about the size of QCOM’s royalty payments. It recommended that the FTC go easy on the firm because the U.S. needs a reliable 5G partner that’s U.S.-based.
This rekindled affection for QCOM is evident in the stock’s 51% return in the past 12 months. It has been a few years since the stock has been in favor, so there’s plenty of headroom left.
Plus, its nearly 3% dividend is a welcome kicker for this top-performing tech on the rebound.
Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
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