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As we see selling coming back into the stock market this week, there will be a lot of speculation about what stocks to buy as prices decline.
Overthinking things and trying to get too fancy is one of the greatest mistakes investors can make.
In bad markets, the key to getting rich during the inevitable recovery is to buy great companies at steep discounts.
Finding great companies is easy. Assembling a list of "dividend aristocrats" that have grown their dividends for at least 25 consecutive ways is one of the best places to start.
Once we have that list, I'm targeting businesses with high yields that can survive the pandemic and thrive when the economy regains healthy footing.
All of the dividend aristocrats are great companies. Still, I am bearish on the intermediate-term outlook of companies exposed to energy, traditional retail, or travel-related industries.
Finding the highest yields and applying a modicum of common sense can help us buy exceptional companies that will survive the current crisis and prosper on the other side.
Here are my top three "pandemic-proof" dividend stocks to buy today...
Dividend Stock to Buy No. 3
The stock at the top of the list to buy when selling is intensifying is AT&T Inc. (NYSE: T).
Bear markets are the best time to buy the "big old-line" companies that dominate their industry and have high dividend yields. And AT&T is one of them.
The company is still seeing subscriber growth during the pandemic. It more than doubled the number of new wireless post-paid customers in the first quarter of the year.
Warner Media took some hits as it lost a lot of anticipated ad revenue from March Madness, but that was a drop in the bucket compared to wireless growth.
People are stuck at home, and it looks like we will be for even longer. Even after lockdowns end, not too many people may venture out until we have drugs for the treatment of COVID-19 and a vaccine.
Americans will be home watching HBO and playing on their phones and laptops. And that is a fantastic catalyst for AT&T.
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AT&T yields more than 7% at the current price, and the divided should be fine. Management is committed to the payout and has suspended stock buybacks to protect the cash dividend to shareholders.
The company is too big to grow at a rapid rate. But it will grow. And I expect dividends will continue increasing every year.
Dividend Stock to Buy No. 2
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.