logologologologo
  • Home
  • Business
  • Markets
  • Exchange
  • Investment
  • Personal Finance

3 Ultra-Safe Dow Dividend Stocks for February

The S&P 500 index’s level has slumped roughly 6.1% across 2022’s trading, and the even more tech-heavy Nasdaq Composite index is down roughly 11.3% across the stretch. Meanwhile, the Dow Jones Industrial Average is down a much milder 3.4%.The Dow is made up of 30 publicly traded blue chip stocks, and the index tends to hold up relatively well in the face of volatility.

This retail giant is built to last

Keith Noonan (Walmart): As the U.S.’s largest retailer and the world’s largest company by revenue, it’s not surprising that Walmart is sometimes looked to as an economic bellwether. On the other hand, the company’s shares have actually tended to outperform when the economy is struggling.

Walmart stock held up pretty well in the 2008 market crash, and it was one of few S&P 500 components to post significant returns across the two-year period ending in 2010.

Walmart’s market-beating performance continued from there. By the time economic recovery was in a stronger state at the beginning of 2013, the stock had delivered a 60.7% dividend-adjusted total return over the last five years while the S&P 500 had posted a total return of roughly 8.6%. Meanwhile, the Dow had seen its total return level climb roughly 31.2%.

Walmart has historically been sturdy amid market volatility. That doesn’t guarantee the stock will always outperform in turbulent times, but the bargain-focused retailer continues to be well positioned as a safe haven for income-seeking investors. When economic times are tough and purse strings tighten, Walmart has benefited from strong demand, and it’s likely that this dynamic will repeat.

The company’s 1.6% dividend yield may not knock your socks off, but it should be viewed in the context of a great underlying business and fantastic payout growth history. Last February marked the announcement of Walmart’s 48th consecutive annual dividend increase, and it’s likely that the company will announce the 49th payout increase along with its fourth-quarter report on Feb. 17. That means Walmart is likely just a year away from joining the ranks of the Dividend King stocks.

With the company making big strides in e-commerce and other growth initiatives, and its core business looking very sturdy, Walmart is a safe dividend stock that could significantly outperform the market over the next decade and beyond.

Don’t judge a business solely on its sector

Daniel Foelber (Chevron): The oil and gas industry is cyclical. Earnings tend to ebb and flow with commodity prices, which impose large swings in annual performances for even the integrated majors. Yet for over 30 years, Chevron has consistently paid and raised its annual dividend, making it one of the few energy stocks on the coveted list of Dividend Aristocrats (members of the S&P 500 that have raised their dividend for at least 25 consecutive years). Chevron raised its dividend in 2020 — a year where many of its competitors were reducing their dividends. Chevron also raised its dividend in 2021 from $1.34 per share per quarter to $1.40 per share per quarter. A couple of weeks ago, it increased the quarterly dividend yet again to $1.42 per share.

Chevron’s durability as a reliable dividend stock extends beyond its track record for making payments. Too much debt has long been the downfall of oil and gas businesses. Chevron prides itself on having an industry-leading balance sheet. It has long had a lower financial debt-to-equity and debt-to-capital ratio than its peers. In 2021, Chevron paid off $12.9 billion in debt, finishing the year with a net debt position of $25.7 billion — which is reasonable.

Chevron spent the first half of the 2010s expanding its production and investing in long-term projects. Those investments paid off. Today, Chevron is an incredibly lean business whose operations can achieve breakeven positive free cash flow (FCF) at around just $40 per barrel of oil equivalent. In 2021, Chevron spent just $8.1 billion in capital expenditures and earned a record-high $21.1 billion in free cash flow that it can use to grow the dividend, buy back stock, and reinvest in the business. The chart below illustrates Chevron’s unique ability to grow FCF despite lower capital expenditures.

In sum, Chevron’s business is thriving in the current high oil and gas price environment, but the strength of its balance sheet and underlying business help it perform well even when the oil and gas industry is in a downturn. With a dividend yield of 4.2%, Chevron is a high-yield dividend stock worth considering now.

Nobody’s going to give up this recurring revenue service

James Brumley (Verizon): If you’re looking for safety and income, look for companies behind the products and services nobody’s willing to do without. In that nobody I know is ever likely to give up their mobile phones, I’m picking Dow component Verizon Communications as shelter from what could be a turbulent time for the market. It’s tied with International Business Machines for the biggest yield among these 30 blue chips, boasting a dividend yield of 4.8%.

You should know the only real value Verizon offers to investors here is its dividend, and perhaps stability; there’s no growth to speak of in store. In light of the current market environment though, investors may well put a premium on reliability and income. More to the point, investors may seek out the safety that only a name like Verizon can offer them.

That being said, don’t be surprised if Verizon shares perform like a growth stock this year. Whereas most other names ended 2021 with a nice gain, most telecom names — including Verizon — lost ground. Any brewing flight to safety could have an exaggerated effect on Verizon shares, which are still trading at less than 10 times this year’s projected earnings despite the moderately sized rebound from December’s low.

Related posts

February 1, 2023

Bitcoin closes out best January since 2013


Read more

Categories

  • Business
  • Content
  • Exchange
  • Inflation
  • Investment
  • Markets
  • Personal Finance
  • Technology
  • Uncategorized

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021

Recent Posts

  • Bitcoin closes out best January since 2013
  • More oil is coming
  • Samsung to keep up chip investment, undeterred by 8-year-low profit
  • TikTok faces a daunting calendar ahead in Washington
  • Think Chevron’s Profit Was Obscene? 5 Companies Will Blow It Away

About Us

The Alpha Cut a Vida Street LLC Company
1404 N. Ronald Reagan Blvd.
Suite 1120
Longwood, FL 32750

Link

(843) 256-4375
https://thealphacut.com

Why Us

Terms & Privacy
Policy & Procedure
Disclaimer

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only.
Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
All data in this communication is provided for informational purposes only and is not intended for trading or investing purposes. We expressly disclaim the accuracy, adequacy, or completeness of any data and content provided by financial exchanges, individual issuers, their respective affiliates and business partners and shall not be liable for any errors, omissions or other defects in, delays or interruptions in such data, or for any actions taken in reliance thereon. You agree not to copy, modify, reformat, download, store, reproduce, reprocess, transmit or redistribute any data or information found herein or use any such data or information in a commercial enterprise without obtaining our prior written consent.
We make no express or implied warranties or representations and shall have no liability whatsoever with respect to any data contained herein. The data may not be further redistributed or used to create indices or other financial products. This report and the views expressed herein are subject to change at any time based upon market or other conditions (such as domestic and global economic trends) and are current as of the date of publication hereof. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
We emphasize that Investment in the securities of smaller companies can involve greater risk than is generally associated with investment in larger, more established companies, and can result in significant capital losses that may have a detrimental effect on the value of your investments.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth.As with any structuring of a portfolio of investments, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general, impersonal information only and are not intended to provide specific advice or recommendations for any individual entity.

copyright © Alpha Cut 2021. All Right Reserved
The Alpha Cut a Vida Street LLC Company