3 Top Stocks For The Conservative Investor
Ali is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
As investors continue to try and manage big market swings, they are left wondering where one can put their money to safely even just get a real return of capital, never-mind a return on capital. In times like these, recession-proof/consistent industries are justifiably more coveted and there are few industries that fit that bill better than telecommunications as people need to communicate with one another. These three stocks below look to combine both benefits of fantastic companies along with sizeable dividend yields that pays we investors as we sit and wait for their value to be realized by the general market
Verizon Communications (NYSE: VZ) is most likely well-known for its “Can you hear me now? Good.” commercials with Main Street, but on Wall Street, investors typically are enticed by its great business model and dividend yield. With a very healthy 4.6% dividend yield and wireless market leading position of approximately 110 million subscribers, Verizon continues to generate huge free-cash-flow and reward shareholders well with consistent dividend increases. With analysts expecting comparatively strong 10% annual earnings growth over the next five years, look for the Company to not only keep its dividend safe, but continue to hike the dividend payout which should make any “Fool” happy.
CenturyLink (NYSE: CTL) is a diversified telecom company offering everything from local and long-distance services to broadband internet capabilities throughout the United States. The company is massive with trailing twelve months revenue in excess of $18 billion and a market capitalization exceeding $26 billion. What stands out immediately regarding the company is its sizeable dividend near 7%, but of course a responsible “Fool” has to dig deeper and see if it’s secure. We see that the company has generated this past year a respectable $1.8 billion in free-cash-flow and management has shown a great track record with regards to paying out dividends as shown here. Moreover, the company should continue to experience synergies as it continues to fully integrate the big merger of Qwest Communications a year ago and in turn lead to increasing profits. The stock is sitting right near its $43.43 52 week high, but the company is hitting on all cylinders and still has a dividend yield that far exceeds the average 2% S&P 500 yield.
AT&T (NYSE: T) is the largest of the companies mentioned here and among the largest in the world with over $127 billion in revenue the past twelve months and a market capitalization exceeding $210 billion. The company, much like Verizon, has an effective, time-tested business model and great dividend yield near 5% that should have any long-term income oriented investor interested. Moreover, the company is able to enjoy great economies of scale which in turn should lead to continued margin expansion and greater profits in the foreseeable future. Add in the fact that the company has a long history, as shown here, in raising its dividend consistently, and I believe that AT&T is worth a look for the conservative investor.
Thank you as always for giving me the opportunity to share my thoughts. Respectful comments and questions are always welcome on the message board below and please know any viewpoints are simply just the opinion of the blogger. I always strongly recommend every investor to do follow-up research and due diligence for the sake of their financial health.
Prohomes owns shares of AT&T; and Verizon Communications. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.