Right now, many of us investors are thinking about protecting our portfolios…
We have to wonder… will the state of the economy only worsen before it gets better? Well, there isn’t really a simple answer to that question. So, it would be wise for those of us with our future in mind to hold shares in strong dividend stocks. If we can choose the right ones, we will see stability, safety from volatility, and growing, lucrative income streams.
Dividend stocks also demonstrate a company’s commitment to its shareholders, and the best of them can lead investors to build significant wealth. In today’s unpredictable economy, dividend stocks representing companies with future price appreciation will give us the greatest peace of mind. Let’s look at a few.
I’m focusing on three income stocks deemed safe from the broader market’s volatility. Additionally, each comes at a discount, offering incredible returns. Join me here:
Cigna Group (CI)
Most definitely a unique investment opportunity, Cigna Group (CI) meets the standard for long-term dividend investors. It’s pretty rare for high-growth businesses and tech start-ups to offer dividends, making CI stand out as a compelling choice. I also find CI compelling for its solid business metrics—its 0.45 beta, for instance. While down YTD by 28.72%, CI has TTM (trailing twelve-month) revenue of $182 billion at $21.93 per share, from which it made $6.74 in net income. For its MRQ (most recent quarter) earnings report, CI beat analysts’ projections for EPS and revenue by margins of 3.22% and 2.31%, respectively, also showing YOY (year over year) growth in revenue (+6.36%), net income (+3.85%), and EPS (+13.67%). CI boasts a free cash flow of $12.94 billion. CI offers a 2.03% annual dividend yield, with a quarterly payout of $1.23 ($4.92/yr) per share. Analysts give CI a median price target of $323, with a $385 high and a $284 low, representing a potential price jump of more than 58% from where it sits now. Buy and Hold.
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Archer-Daniels-Midland Co (ADM)
Archer Daniels Midland (ADM), a global food processing and commodities trading leader, stands out as a top dividend stock for its resilience and fortitude. With a core business guaranteeing lasting relevance, ADM rests on a solid foundation for consistent returns. ADM’s impressive 51-year track record of consecutive dividend increases discourages management from jeopardizing the passive income stream, thereby protecting its coveted status as a “dividend king.” Today, ADM is resting on an attractive YTD dip, currently down by 23.06%, leaving plenty of room for price appreciation. With a 0.59 beta score, ADM has a TTM revenue of $101.98 billion at $7.97 per share, with a P/S (price to sales) ratio of 0.42x and a P/B (price to book) ratio of 1.71x. At its latest earnings call, ADM reported EPS of $2.09 vs. $1.78, as expected by analysts, a 17.35% surprise. ADM currently has an annual dividend yield of 2.52% and a quarterly payout of 45 cents ($1.80/yr) per share. Having a 10-day average volume of 2.93 million shares, ADM has a median price target of $93, with a high of $117 and an $82 low. This represents a potential price upside of almost 64% for ADM, and analysts are telling us to Buy and Hold.
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Abbvie Inc (ABBV)
Since its separation from Abbott Labs in 2013, renowned drugmaker Abbvie (ABBV) has demonstrated an outstanding track record of dividend growth—with a remarkable dividend payout increase of 270% from its inception in early 2023. Although ABBV’s popular Humira will no longer be viable, the drugmaker has newer products like Skryzi and Rinvoq in its portfolio, both of which can provide a cushion while being exciting ventures on their own. This puts ABBV in an excellent position to maintain and further add to its dividend income, giving shareholders peace of mind. ABBV’s stock is down YTD by 15.56%; it shows TTM revenue of $56.7 billion at $4.24 per share, from which it derived a $7.5 billion net profit. For the current quarter, ABBV is projected to report $13.5 billion at $2.92 per share. It maintains a low-volatility beta score of 0.55 and has a 4.34% dividend yield and a quarterly payout of $1.48 ($5.92/yr) per share via a 44.14% payout ratio. With $12.6 billion in free cashflow and a growing 10-day average volume of 5.59 million shares. ABBV has a median price target of $164, with a high of $201 and a low of $135, representing a more than 47% potential price jump. Analysts say to Buy and Hold ABBV.
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