Today was a classic retest of the lows we saw on August 24. The good news is that if you’re already invested in fundamentally superior stocks (more on that in a moment), you should be well protected against days like today.
The bad news is that today is just the second retest, the first being on September 1, of what I expect to be a series of retests. If history repeats itself, I wouldn’t be surprised to see two or three more retests between now and the end of October.
By mid-November, I do expect trading volume to subside, and for the market to firm up. And from Thanksgiving through year-end, we should see some holiday cheer return to the stock market.
What does this mean for investors? Well, with the S&P 500’s average dividend yield at well over 2% (above the 10-year Treasury), any near-term dips should be regarded predominantly as buying opportunities. I say “predominantly” because we are in a stock picker’s market, so you still want to focus on fundamentally strong stocks.
On volatile days like today, stocks that are characterized by aggressive dividend growth, and rock-solid sales and earnings, are your best bet. To help lead you in the right direction, I went ahead and ran over 500 of the biggest names on Wall Street through Dividend Grader and Portfolio Grader. Of these 500 stocks, 10 names grabbed my eye:
|Ticker||Company Name||Dividend Yield||Dividend Grader Rating||Portfolio Grader Rating|
|AEO||American Eagle Outfitters||3.1%||A||B|
|BAH||Booz Allen Hamilton||1.9%||A||B|
|CPB||Campbell Soup Company||2.4%||B||A|
|LB||L Brands Inc.||2.2%||A||A|
|MAA||Mid-America Apartment Communities||3.8%||A||A|
|MIC||Macquarie Infrastructure Corp.||5.4%||A||B|
|MO||Altria Group, Inc.||4.2%||B||B|
|SPG||Simon Property Group, Inc.||3.4%||A||B|
|TRI||Thomson Reuters Corporation||3.4%||A||B|
|WM||Waste Management Inc.||3.1%||A||B|
And if you really want to kick your dividend strategy up a notch, my Blue Chip Growth newsletter features many of the best dividend stocks that money can buy right now. Current Blue Chip Growth readers can look forward to regular commentary and specific buy instructions on nearly 30 premium dividend stocks. If you’re not currently a Blue Chip Growth member but would be interested in learning more about joining, you may visit here.