It appears that the stock market is finally waking up to the grim reality…
Even with all the government stimulus, the road to full economic recovery will be a long and difficult one.
Meaning, stocks at these levels are way overvalued, especially when you factor in lower 2020 earnings.
At this point, it’s safe to assume that the market won’t make any significant gains for the rest of the year.
So, with such bleak prospects, what should an investor do?
Here’s one suggestion—load up on yield…while you still can.
Cashflow-Generating Investments Are Becoming Ever Scarcer
Even before this crisis began, investors around the world have been desperately looking for yield.
Government bonds in most developed economies were returning close to 0% per year, real estate prices were inflated, and even the yield on dividend stocks was becoming unattractive.
Now, all these issues got even worse.
Bond returns are the lowest in history, so it makes no sense buying those. Of course, you could opt for those from the high-yield market, but I would strongly advise against it. Those are extremely risky investments at this point and have a high chance of default.
If you buy real estate, sure, you might acquire it for a lower price than before, but with no one paying rent, it could take some time before you start earning cashflows on that investment.
Which means that your only option is the stock market. The problem here is that many companies are cutting or suspending their dividends.
But not all hope is lost. Some can afford to maintain their dividend payouts even in this environment.
And because of this, they’re fast becoming a hot commodity.
The investing community is waking up to this fact, and it won’t be long before they drive the share prices of those stocks up, and, as a result, their dividend yields will fall.
Meaning, this one of the last opportunities to scoop them for your portfolio.
Here are three safe and secure dividend stocks you should consider buying.
One Of The Last Few Safe & Secure Dividend Stocks
The first one on the list is the telecom giant AT&T (NYSE: T).
Access to the internet has become a utility we can’t live without. Meaning, AT&T’s business is almost entirely recession-proof.
Moreover, the company is benefiting from the stay-at-home orders. It’s streaming service HBO Now is seeing 40% usage increase.
This makes telecom’s cashflows as secure as they come, so you can expect its dividend to remain the same. The stock currently yields an impressive 7.28%.
The next candidate is also active in the industry we can’t live without—healthcare.
AbbVie (NYSE: ABBV) is a drug manufacturer focusing primarily on immunology and oncology. Again, those are products that its customers will continue buying no matter what, so the current situation poses little danger to the company’s revenues or its dividend. ABBV currently yields 5.25%
Finally, I recommend you consider IBM (NYSE: IBM).
Sure, the company had some mishaps with its business strategy in the past. But as one of the largest IT infrastructure providers in the world, a service we need now more than ever, it’s as safe a bet as you will find. The Big Blue currently yields 5.58%.