The Dow Jones Industrial Average is coming off its sharpest drop into a bear market in history this month. The ongoing coronavirus response has effectively shut down the hospitality, travel, and restaurant industries.
Now, these sectors are desperately seeking bailouts while investors experience a wipeout to their wealth.
With that in mind, turning to blue-chip dividend stocks is one way to hedge your portfolio right now. These stocks may pull back with the rest of the market, but any dividend payments will serve as hedges now.
Our Complete Guide to Protecting Your Portfolio from the Coronavirus will help you navigate anything that comes next in this uncertain market. Click here to get this critical information right now, for free...
Today, we're going to discuss three high-yield dividend stocks that offer tremendous upside when the coronavirus passes and we move toward full recovery.
Of course, in this unprecedented situation, many companies may end their dividend payments. That's a fact. But the following three offer some of the safest on the market.
Dividend Stock to Hedge Your Portfolio, No. 3: AbbVie
The biotech sector has pulled back in recent weeks. And - in normal conditions - some of the leading biotech stocks are trading at incredible valuations and offer massive dividend opportunities.
One of the leading "Buy and Hold" options in the sector is Abbvie Inc. (NYSE: ABBV). Shares have pulled back more than 26% from their 52-week high and are now trading at a point that the dividend sits at 6.5%.
This is an incredible dividend level for a company that has some of the market's most important drugs, like arthritis treatment Humira and cancer drugs Imbruvica and Venclexta.
When you see a firm like this trading at a yield that rivals junk bonds, you have to remember that this is a healthy company.
If you're a biotech investor looking for a stable, profitable company that produces medications critical to Americans, AbbVie will be a survivor of this crisis.
Dividend Stock to Hedge Your Portfolio, No. 2: Broadcom
It's unclear how and when the semiconductor sector will recover. But when it does, it's important to have your money in the companies poised to win the race through this crisis.
Dominant players in the tech space like Apple Inc. (NASDAQ: AAPL) will use this opportunity to bolster their market share and streamline their supply chains.
That's good news for suppliers who have strong relationship with Apple and will benefit from next-generation trends like 5G. That puts Broadcom Inc. (NASDAQ: AVGO) right in the heart of the opportunity ahead.
Broadcom will be a survivor of the coronavirus fallout, and when 5G rises it will be in high demand.
The stock also pays a ridiculous yield at the moment of 7.7%, which rivals junk status. But again, this is a solid company.
Dividend Stock to Hedge Your Portfolio: No. 1
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
Finally, the markets may be in turmoil, but the other side of this will consist of a situation where almost everything could be thrown at the crisis.
We fully anticipate that the U.S. will move to boost infrastructure spending on the other side of this crisis to bolster economic growth and fix the roads and bridges that remain in tough shape.
The top pick for infrastructure growth is Caterpillar Inc. (NYSE: CAT). The stock is off more than 30% from its 52-week high. And if you're looking for a "buy and hold" opportunity, look no further than the industrial giant with a strong reputation.
CAT currently pays a dividend of 4%, which is historically high.
Free Action Plan: The experts at Money Morning have come together to create a complete action plan for surviving this extremely chaotic market. In this completely free report, you'll find out which stocks to sell, which stocks to buy, how to trade this market, and how to hedge your investments. Click here to access the action plan...