The tech sell-off dragged down all major stock indexes over the last week. The Nasdaq dipped into correction territory on Tuesday.
That came as a sudden reminder that we are not out of the economic crisis caused by the coronavirus, and the run-up since March has happened in spite of the negative news. Investors might be tempted to buy the dip, but the risks are far from over. That's why adding high-dividend stocks to your portfolio right now can give you some much-needed stability and income as volatility rises through the fall.
Dividend stocks are usually less volatile than popular tech stocks. When the popularity fades, those stocks can turn gains into losses pretty fast. Trying to buy them now could be like trying to catch a falling knife.
That's especially true considering the upcoming election will add more uncertainty to markets, and flu season could bring another wave of coronavirus cases.
But once a dividend is paid, it stays in your account no matter what the markets do in the short term.
That's why owning the best dividend stocks can add some much-needed comfort in times like these...
Let This REIT Pad Your Portfolio
Dividend Yield: 10%
Blackstone Mortgage Trust Inc. (NYSE: BXMT) is an excellent example of a strong dividend stock with the potential for high total returns. Blackstone Mortgage Trust is a real estate finance company that originates senior loans collateralized by commercial properties in North America, Europe, and Australia. It is structured as a REIT, so almost all the cash it generates is paid out to investors through a dividend.
Blackstone Mortgage has an advantage over many of its competitors in the highly competitive commercial lending marketplace. Its parent company, Blackstone Group Inc. (NYSE: BX), is one of the largest owners of commercial property in the world. It knows the markets as buyers and sellers and share that knowledge with the Blackstone Mortgage Trust managers.
WARNING: 22 million shares of this stock trade hands every day - make sure you're nowhere near it. Click here...
Because of its competitive advantage, Blackstone Mortgage had no problem raising $607 million of debt and equity capital in the last quarter. Its cash hoard is now over $1 billion, so it will be well-positioned to take advantage of any high return opportunities created by the current economic situation.
The cash it generates and pays out is substantial. At the current price, the shares of Blackstone Mortgage Trust are yielding more than 10%.
Once you own shares, you will be in good company. Legendary traders George Soros and Paul Tudor Jones recently bought shares of this high-yielding stock.
This Dividend-Paying Stock Gets a Boost from Energy
Dividend Yield: 8%
You can also collect high dividend payments from a leading "green" energy company.
Enviva Partners LP (NYSE: EVA) makes wood pellets that utilities can burn instead of coal to produce electricity. Coal plants converted to Enviva's biomass wood products can be used along with solar and wind power to substantially reduce the world's carbon footprint.
The company's mission to reduce carbon emissions has also been a terrific growth story since Enviva's IPO back in 2015. Since going public, Enviva has outperformed the S&P 500 by 112%. Revenue has grown by more than 18% annually as regulators in its core European markets have tightened emission regulations.
This year, Enviva completed two acquisitions that will increase its contracted backlog of product orders by $5.3 billion. That brings the backlog to more than $19 billion, a level that should lead to Enviva doubling cash flows over the next couple of years.
Enviva has just raised the dividend for the 20th time since the IPO. Dividend growth has averaged a massive 13% over this period. The current yield is 7.84%, and if the growth rate remains the same, shareholders will see that double in just 5.5 years.
Of course, we've saved the best for last.
This dividend stock has been blowing analysts' estimates out of the water lately.
It's been flying under the radar amid the tech runup, but we expect its growth trajectory to keep chugging along...
The Best High-Dividend Stock to Buy
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Dividend Yield: 6%
F.N.B. Corp. (NYSE: FNB) is a far cry from technology stocks. F.N.B. is a community bank with offices in Pennsylvania, Ohio, Maryland, West Virginia, and the Carolinas. Bank stocks did sell off back in March but have since recovered and are consolidating.
F.N.B. blew out the analysts' expectations last quarter by 94%. Earnings per share rose by 53% year over year as the bank successfully negotiated the economic shutdown. Mortgage banking income rose to record levels as buyers rushed into the housing market all over the United States.
F.N.B. is just a quiet, well run, profitable bank. The bank should be able to show consistent double-digit growth for the foreseeable future, and that should help drive the stock price higher.
In the meantime, the stock is yielding 6.25%, and earnings easily cover the dividend. That's exactly what we like to see in a dividend payer.
High-dividend stocks can help us escape some of the crazy volatility of tech stocks and enjoy a much smoother ride to big profits.
Three Stocks Even Better Than FNB
Chief Investment Strategist Shah Gilani just held his first-ever stock-picking lightning round event - running through more than 50 stocks to tell you if they are stocks to buy or stocks to sell.
Dozens are overpriced and overhyped - you should ditch them ASAP.
But Shah says THESE three stocks are "screaming buys."
All three are trading at a discount... they're under-the-radar companies most people haven't even heard of... and they have massive tailwinds ready to send their share prices into the stratosphere.
To get the company names, tickers, and price targets for Shah's picks, go here now.
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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.