Wednesday, March 30, 2011

7 High Dividend Stocks for a Shaky Market

Stock dividend advice is a crucial part of any investing portfolio. And high yield dividend stocks are especially important in times of trouble. As in, right now. There's a lot of uncertainty whether the market's 25% run since July is flagging or if the bulls are picking up momentum once more. But as volume remains fairly weak on Wall Street amid continued geopolitical unrest, government debt fears at home and abroad and overall economic uncertainty, it's hard even for the most sophisticated trader to tell how things will shake out. So what's a regular investor to do? Well, if your investment goal is simply to steadily grow (and protect) your retirement savings, now is the time to take a serious look at dividend stocks. For stock pickers constantly seeking the next Netflix (NASDAQ: NFLX ) in order to double their cash quickly, getting a few pennies on the dollar in dividends sounds like a waste of time.  But many of us aren't trying to turn $10,000 into $100,000 by the end of the year – to us, a "sleepy" stock that provides 10% annual returns like clockwork is a solid investment, and one we're happy to own. If this describes your strategy, then high-paying dividend stocks should be a key part of your portfolio. If you can get a stock that returns 7% of your investment via dividends each year, you could beat the market handily even if shares don't pop impressively. By way of example, here are 7 solid dividend stocks to consider for your portfolio. This diverse list covers everything from tobacco to big pharma to telecom to oil, and averages a dividend yield of over 7% per pick: Astra Zeneca – 5.5% Dividend Yield While Big Pharma is indeed underperforming the market over the last year or so due to fears over expiring patents and generic competition, there is still some long-term potential in the sector's low valuations and some of the highest dividend stocks on Wall Street. Take Astra Zeneca (NYSE: AZN ), trading with a forward P/E of just 7.3, the lowest among pharmaceutical majors. Though AZN dividends are tricky to track, with a big payment and March and a smaller payment in September, based on the last two payouts the yield is a plump 5.5%. Lorillard – 5.7% Dividend Yield Now that a ban on menthol cigarettes is “unlikely” following an FDA study, tobacco giant Lorillard is cruising near a new 52-week high. But even after a nearly 25% surge in shares over the last two weeks, the company still trades at the lowest forward P/E of its peers, at just 11.7 times future earnings. Add in projected revenue growth of over 13% this year and a profit forecast over 10% above 2010 totals and this tobacco giant is a very safe bet. More importantly for income investors, this steady growth means the 5.7% dividend yield is safe – even after two significant increases to the payout since August.
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