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We’re living in a low-rate world. Get used to it. At the start of the year, the Federal Reserve had plans to raise interest rates a few times. Well, you can forget about that, forecasts Eddy Elfenbein, editor of Growth Stock Investor.
There are ways to protect your portfolio. Here are three dividend all-stars that are currently fetching generous yields. There are stocks with above-average dividends, and long histories of consecutive dividend increases. In other words, these are dividend stocks that are proven growers.
Let’s start with Helmerich & Payne (HP). The drilling company currently pays a quarterly dividend of 71 cents per share, and I think it will soon go up. I have to confess that that isn’t a very bold forecast.
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Why? Because Helmerich & Payne has increased its dividend every year for the last 46 years running. Sure, there’s a chance that HP could forego a dividend hike, but even so, the stock currently yields nearly 5%. That’s the equivalent of more than 1,200 Dow points.
By any measure, the shares are going for a low valuation. The problem, of course, is that energy prices are down, and if HP’s customers are hurting, they’ll feel some pain as well. But I’ll point out that HP is doing much better than it was a few years ago. They’re still the leader in the industry, with a strong market share.
What I like about HP is that everyone else is down on them. That’s often a good sign for the contrarian investor. I’ll give you an example. A few weeks ago, HP reported quarterly earnings that were 40% better than what Wall Street had been expecting.
In fact, this was the second quarter in a row that HP clobbered the Street by more than 40%. HP is a beaten-down blue chip that has a great dividend and a long history of growth.
Our next dividend all-star is People’s United Financial (PBCT). Never heard of them? Don’t worry. You’re not alone. In fact, the bank probably prefers it that way. This Connecticut-based bank has quietly delivered profits and earnings growth for 180 years. PBCT is currently the 46th-largest bank in the country. The bank has about 400 branches, and it mostly serves New England.
PBCT currently pays a quarterly dividend of 17.75 cents per share. That works out to 71 cents for the year. At the latest prices, that gives People’s United a dividend yield of 4.1%. That’s about double the 10-year Treasury. It’s also better than the large majority of stocks in the S&P 500.