Worried that the market might be getting a bit frothy? Good dividend stocks will keep making you money even if a correction comes. And smart dividend picks can be found in nearly every sector.
Healthcare? There's AbbVie (NYSE:ABBV). Energy? Try BP (NYSE:BP). Utlities? Consider Eversource Energy (NYSE:ES). Industrials? Look at Ford (NYSE:F). Real estate? Check out Welltower (NYSE:HCN). Here's why these dividend stocks from across the spectrum should be good ones to buy in March.
AbbVie: A big biotech with lots of growth potential
AbbVie stands out as one of the best healthcare dividend stocks around. The biotech has grown its dividend by a whopping 60% since being spun off by Abbott Laboratories in 2013. AbbVie's yield currently stands at 4.07%.
You don't have to worry about the dividend evaporating anytime soon. AbbVie only uses 63% of its earnings to fund its dividend. And those earnings should grow by double-digit percentages over the next few years.
Sales for AbbVie's top drug, Humira, continue to increase. The biotech's cancer drug Imbruvica is sizzling hot. Revenue from the drug could more than double by 2020. AbbVie also has a solid pipeline with several candidates that could generate annual sales topping $1 billion.
BP: Making smart moves for the future
Oil and gas stocks are known for paying nice dividends. BP is no exception. The big oil company's dividend yield of 6.95% stands out as one of the highest in the industry.
A cursory glance at BP's latest quarterly results might make you think the company is headed in the wrong direction. But don't let the lower earnings fool you. When one-time gains from the past are factored out, BP is performing quite well and continues to generate strong cash flow.
BP is also making smart moves that should position the company to succeed in the future even if oil prices fall. The company has cut costs significantly and plans to keep its cost discipline intact. BP thinks that it will be able to balance its books by 2021 at crude prices as low as $35 to $40 per barrel.
Eversource Energy: Lower leverage than most utilities
Eversource Energy's dividend yield of 3.24% might not be as mouth-watering as AbbVie's or BP's yields. However, this utility stock is still a good pick for long-term investors.
Many utilities load up with so much debt that an increase in interest rates causes plenty of pain. Eversource Energy, however, isn't nearly as leveraged as some of its peers. The company's debt-to-equity ratio is a respectable 0.9.
While utility stocks aren't going to generate growth like stocks in other industries do, Eversource Energy should increase earnings at a solid pace. Wall Street analysts project average annual earnings growth of 6% for the company over the next five years.
Ford: A great pickup for your portfolio
Ford continues to claim one of the most attractive dividends among automakers. The company's dividend yield is currently 4.73%. Ford uses only a little over half of its earnings to fund the dividend program.
There have been some signs recently that demand for buying new cars could be weakening a bit. Ford and other automakers have increased their incentive payments to spur sales. This could hint at headwinds later this year.
However, the future for Ford still looks bright. The company remains at the top of the pickup truck market. Ford is also investing heavily in developing driverless cars. And with the stock trading at a little over seven times projected forward earnings, Ford appears be priced at a discount.
Welltower: The granddaddy of healthcare REITs
Welltower has been in business since 1970, making it the oldest healthcare real estate investment trust (REIT) around. As a REIT, paying dividends is a must for Welltower. Its dividend yield currently stands at 4.94%.
The company should reap rewards from a strategic decision announced in November. Welltower is reducing its focus on long-term and post-acute care (LTPAC) properties and shifting more to private-pay senior housing. That's a smart move that should allow the company to increase profitability.
Buying Welltower stock should prove to be a good way to benefit from aging demographics in the U.S. The number of Americans aged 85 and over is expected to double in the next 20 years. Welltower's large presence in the senior housing market, including memory care, assisted living, and independent living, should allow the company to grow significantly.