We continue our series of the best dividend investments for 2016 with Part 2. If you didn’t see it, make sure to check out Part 1. For investors seeking better income returns from their capital, this series should prove invaluable. In Part 2, we’ve got three more large-cap very stable .
And then in Part 3, we’ve got some higher-yielding higher-risk/reward sorts of opportunities. First up, we go northward.
Rogers Communications (RCI): Telecom names are among the most popular for dividend investors. People seeking yield tend to invest in the sorts of companies that offer indispensable goods and services that are compelling buys, in both good and bad times. Telephone, cable, and internet services tend to be in that must-have tier of necessity.
Playing into that theme, the United States’ two strongest telcos, AT&T and Verizon, are among the most widely held names among older investors. For people seeking steady high income, these are great companies.
However here at Capitalist Review, we’re seeking to give you ideas that’ll keep you a step ahead of the pack. While we wouldn’t fault anyone for buying AT&T or Verizon, there is a better opportunity now, thanks to the devaluation of the Canadian dollar, that we aren’t seeing too many folks talk about.
That is, instead of buying the US oligarchs of the communications space, buy Rogers, the Canadian telecommunications leader. Rogers provides standard telecommunications services including voice, cable TV and internet.
It also is a media and sports giant, owning the Toronto Blue Jays baseball franchise, it has exclusive license for the NHL, publishes 70 magazines, more than 50 radio stations, and various cable TV channels.
Shares have stagnated in recent years, and the 25% depreciation of the Canadian Dollar compared with the greenback offers American-domiciled investors a great opportunity to buy into this leading Canadian franchise. You get a 4% yield up front, which will rise toward 5% as the Canadian Dollar rebounds.
And with Rogers’ diversity of businesses, it should fare well in the years to come, regardless of how technology changes various product offerings within its product lineup.
Amgen (AMGN): We have discussed this company previously, and we recommend interested readers get up to date with our article discussing Amgen, our top pharmaceutical idea for 2016.
To put is simply, Amgen is the highest-yielding large biotech firm, and unlike Gilead, its prime competitor for dividend-investing dollars, Amgen is both better diversified and has more robust growth prospects.
Amgen is in the process of launching a new cholesterol drug that has good chances of becoming a blockbuster as we speak. Combine that with its current five product core product lineup that has delivered the company great profits over the years, and Amgen is exactly the right combination of dependable and growth-orientated.
At a sub-20 PE, a 2% yield, and with profits growing at a projected 13% rate over the next five years, this is a true bargain in the otherwise scary biotech sector.
Emerson Electric (EMR): Emerson has a year to forget, getting hit for an up to 30% loss year-to-date before putting in a bit of a rally recently to get back towards 20% down on the year.
Despite not being a household name for many investors, Emerson is one of the true blue chips available in the US. It is a company hailing with more than 125,000 employees and 200 manufacturing facilities.
The company has raised its dividend a rather astounding 59 years in a row, continuing to grow investors’ income through the stagflation in the 1970s, crash of 1987, tech implosion of 2001, financial crisis in 2008 and on through today.
Emerson has five different business segments, including climate tech, industrial automation, process management, network power, and commercial and residential solutions.
The company will be spinning off the network power division in the near future, refocusing its efforts on its core business lines. Shares have been hurt from the fall in the energy sector, but given the broad diversity of its operations, the hit hasn’t been too bad; earnings have been steady.
At its current 3.8% yield, Emerson is a juicy choice for yield-seeking investors. And with a 59 year track record of raising the dividend, investors can be fairly confident that shares bought today will provide more and more income in the years to come.