In this low interest rate environment, dividends are still looking great. After all, the S&P 500 currently yields about 2%, and that is a heck of a lot better than you can get through most savings accounts. On top of this, dividends do two important things:
- First, a generous dividend payment often lowers a stock’s volatility. I’d much rather own a stock that’s stable rather than one that scatters all over the place.
- They also tell me how much money a company really has. If the company is willing to part with cash in the form of a dividend payment, then I know they really earned it.
But you still have to do your homework and screen dividend stocks for fundamental health. Stock selection remains critical with dividend stocks, because if you choose them correctly, you can make a fortune both as your invested capital appreciates over the years—and as the quarterly dividend grows.
And now is the perfect time to do so because we’re coming up on a bunch of ex-dividend dates over the next few weeks. I’ve listed the big dividends below. In order, they’re listed by Dividend Grader rating: A (dark green), B (light green), C (yellow), D (light red) and F (dark red). As and Bs are solid buys, Cs are holds and Ds and Fs are sells.
|F||Ford Motor Company||14-Jan||1-Mar||$0.25||4.67%|
|PIR||Pier 1 Imports, Inc.||15-Jan||3-Feb||$0.07||6.35%|
|TEP||Tallgrass Energy Partners LP||27-Jan||12-Feb||$0.64||7.02%|
|CLB||Core Labs NV||20-Jan||19-Feb||$0.55||2.28%|
|JNJ||Johnson & Johnson||19-Feb||8-Mar||$0.75||3.05%|
|PAA||Plains All American Pipeline L.P.||27-Jan||12-Feb||$0.70||12.75%|
|SIMO||Silicon Motion Technology Corp.||12-Feb||26-Feb||$0.15||1.74%|
|BMO||Bank of Montreal||28-Jan||26-Feb||$0.82||6.31%|
|COG||Cabot Oil & Gas||27-Jan||12-Feb||$0.02||0.52%|
|PG||Procter & Gamble||20-Jan||22-Feb||$0.66||3.46%|
As you can see, there are plenty of promising dividend stocks to buy, but there are also many pitfalls here. As always, you should continue running your holdings through both Portfolio Grader and Dividend Grader to make sure that you’re only holding top-rated stocks.