Stocks are undoubtedly on the defensive right now. As of the latest look, the S&P 500 sits 8% below July's peak, and it's still logging lower lows.
Don't be so distracted by the speed and scope of the sell-off that you forget this is just a temporary setback. The market is bullish more than twice as often as it's bearish. Indeed, the time to step into long-term positions is when they've suffered a short-term setback -- kind of like right now.
With that as the backdrop, if you're an income-seeking investor looking for new dividend stocks to carry into and through the next bull market, here are three to consider. Notice all three of them are businesses that drive recurring, even if not perfectly consistent, revenue growth.
1. KeyCorp
It's been a tough year for all banks. But it's been even tougher for the regional banking outfits. Smaller banks can't absorb higher borrowing costs like their larger counterparts can, while bigger banks can simply spend more when competition for customers heats up.
Not every regional bank is fighting a losing battle, though.
Take KeyCorp (KEY +0.41%) as an example. After being bumped around by the liquidity crisis that upended Silicon Valley Bank and First Republic Bank early this year, this banking name seems to be moving forward again. Although last quarter's bottom line of $0.29 per share is down year over year, that's up from the troubled second quarter's per-share earnings of $0.27. Charge-offs on nonperforming loans are up, albeit not by much. Last quarter's charge-off rate of 0.24% of loans is still relatively low, and the growth of these allowances for loan losses has pretty much slowed to a crawl. And while its net interest income slipped, as that of most other banks did, noninterest income such as fees and service-based earnings sequentially grew 5.6%.
NYSE: KEY
Key Data Points
Perhaps most encouraging of KeyCorp's Q3 numbers, however, is that total deposits continue to edge higher, defying a trend that's working against many other regional bank companies. The 1.3% growth in total customer deposits between the second and third quarter of this year suggests its customers believe their money is safe with this particular bank.
None of this resilience is being reflected in the stock's price, which is still down more than 40% from March's high -- when the Silicon Valley Bank drama first unfurled, and then infected the rest of the industry. The weakness is an opportunity, however, to step into a stock while its dividend yield is an incredible 8.3%.
That's a dividend, by the way, that's been raised every year for over a decade now and is still more than fully covered by earnings.
2. Unilever
Most investors have probably heard of Unilever (UL +2.23%). They may even know that the U.K.-based company makes a variety of consumer goods.
What many investors may not realize, though, is that they're also likely to be customers. This is the parent to familiar brands such as Dove soap, Hellmann's mayonnaise, Axe body spray, Ben & Jerry's ice cream, and Vaseline petroleum jelly, just to name a few. Roughly one-fourth of its business comes from right here in North America.
It's the other three-fourths of its business mix, however, that makes this dividend-paying name such a compelling prospect right now. It's a way for U.S. income investors to diversify their cash flow away from U.S.-based companies that mostly transact business with U.S. dollars.
NYSE: UL
Key Data Points
Bear in mind that could work against you just as easily at it might work in your favor. There's always a winner and a loser when a currency gains or loses value. But we don't diversify to speculate on how currency values might change. We diversify to protect ourselves from the unknown and the unpredictable.
The kicker: He's not exactly a newcomer any longer, but current Unilever CEO Hein Schumacher was only picked in January, and only took the helm in July. Many of the changes this outsider has in mind aren't yet in place, but they could start to become reality soon. These include plans to make Unilever products superior to others in key categories as well as -- if merited -- selling off businesses and brands that will never be a great fit.
Unilever's yielding just under 3.9% right now.
3. BlackRock
Last but not least, investors hunting for strong dividends should take a look at BlackRock (BLK +0.00%) while its dividend yield stands at 3.25%. That's not huge, but BlackRock's dividend has more than tripled over the past 10 years. There aren't many other companies out there that can make a comparable claim.
As was the case with Unilever, you've probably heard of the company. And, as was also the case with Unilever, you may be a BlackRock customer without even realizing it. This is the outfit behind the popular iShares family of exchange-traded funds (or ETFs). BlackRock also manages several traditional mutual funds as well as a handful of closed-end funds. It even offers investment-management technology solutions to firms in need of a turnkey solution.
NYSE: BLK
Key Data Points
The business can be a concerning one to would-be investors. BlackRock's top and bottom lines are seemingly tethered to the stock market, after all. If the market's in trouble, so is BlackRock.
That's not quite how the fund business works, however. Fund companies typically don't get paid for their funds' performance. Rather, fund managers take out a modest management fee from the pools of assets they manage regardless of how well or how poorly they're performing. While the broad market's ebb and flow can raise or lower this quarterly fee, BlackRock's top and bottom lines are actually rather predictable -- even if volatile -- from one quarter to the next.
BLK Revenue (Quarterly) data by YCharts
Also notice the fund manager's per-share earnings consistently cover the dividend payment, and then some.
There is risk, to clear. The biggest risk here is that investors will cash out their BlackRock funds or sell their iShares ETFs altogether, reducing the company's revenue-driving asset base more than mere market weakness might. In this vein, BlackRock saw $49 billion worth of liquidations of its funds during the third quarter of this year. It does happen.
BlackRock still saw overall net inflows of investors' money though, last quarter as well as for the last year. Its reputation and prowess make its stock a reliable way to plug into the broad market's long-term uptrend and also collect dividends in the meantime.
