This week, the novel coronavirus has triggered two circuit breakers to halt trading. The viral panic over coronavirus has turned into a fiscal pandemic. The Dow is now off more than 27.6% from its all-time high in December. The index hasn't been this low since summer 2017.
Panic is only increasing as the COVID-19 problem gets more serious. Many investors feel they're stuck riding this with no answer.
But that is not the case. If you're sitting on any cash right now, many U.S. companies are trading at very attractive valuations. This would be the time to buy some top dividend stocks to hold over the long term.
It's important to remember that a pandemic's rise is parabolic, but so too is its decline. While the United States is facing a wave of infections around the nation, China (the first place the virus spread) is starting to see its early signs of normalcy and improvement in its supply chains.
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Companies with enough cash on hand should survive this pandemic. Some are looking to entice investors who are moving to cash with a boost to their dividends.
Today, we're taking a look at several U.S. companies that are raising their dividends and could become very attractive long-term investments. Here's the first dividend stock...
Top Dividend Stocks No. 3: QUALCOMM Inc.
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]QUALCOMM Inc. (NASDAQ: QCOM) recently announced that it hiked its quarterly dividend for investors by 5% year over year to $0.65 per share. That brings its dividend to an annual payout of $2.60. This was a solid boost in the tech sector despite the ongoing coronavirus pandemic.
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QUALCOMM is an attractive business given its strong foothold in a high-margin business. It remains one of the most important manufacturers in wireless technology and will take a massive role in 5G over the next decade. The coronavirus has shined a spotlight on the importance of mobile, the Internet of Things, video conferencing, and other technologies that keep the digital economy running.
The firm is currently working on the development of next-generation chips and modems for high-end mobile and smartphones. Despite the impact on the global economy, the firm still anticipates strong sales in 2020. It has forecast sales of 1.75 billion to 1.85 billion units - an increase of 3% year over year.
Shares of QCOM are off about 9.5% on Thursday and continue to track downward, given the ongoing sell-off. But shares are very attractive. Even at a conservative bounce, a low target of $80.00 per share on top of a 3.85% dividend is enticing.
Once QCOM shares bounce back, it may be a very long time before we ever see a dividend this high for the company.
Top Dividend Stocks, No. 2: Kohl's Corp.
The retail sector is taking an incredible series of body blows due to the coronavirus outbreak. Even if the U.S. government unleashes an unprecedented amount of stimulus, it is unclear if consumers will head out to shopping centers and clothing retail shops to spend money.
Even in the face of growing uncertainty, Kohl's Corp. (NYSE: KSS) has increased its dividend to attract new investors. Last week, the company reported an adjusted EPS of $1.99, easily topping expectations by $0.11. However, it did report an 11% decline in revenue year over year. The firm did announce a 5% jump in its dividend to 11%, or $0.704 per share. The dividend is payable to all shareholders of record on March 18. Investors will receive it on April 1.
But this next one is probably the best dividend stock to buy as the market wades into unknown territory.
Top Dividend Stocks, No. 1: Alamos Gold Inc.
Finally, we just saw a gold company hike its dividend by a staggering amount. Remember - gold is a rare metal and "safe haven" asset that doesn't pay any dividend or yield. However, Alamos Gold Inc. (NYSE: AGI) has announced it will increase its dividend by 50% to $0.015 per common share. Though this is not a significant increase, it was part of a broader effort by Alamos to introduce a new dividend reinvestment and share purchase plan.
Alamos is a pure production play in the gold mining arena. It has a mine in Canada and another in Mexico. All told, it has mineral reserves of roughly 9.7 million ounces. The firm is also very good at selling gold for more than it costs to produce. In the fourth quarter, it produced 122,100 ounces of gold at an average of $972 per ounce.
It sold 127,148 ounces at an average price of $1,463. That represents a profit spread of $491 per ounce. Not bad.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.