Even after the "Great Rally of 2009," there are still screaming buys you can snap up today.
In fact, a top market scholar recently declared that buying them is "your best long-term investment."
I'll share this professor's reasons -- and some stocks to profit from his advice -- in just a second, but first let's look at why these bargains even exist.
Not all stocks went way up in 2009
According to Kiplinger's, "non-dividend-paying stocks in Standard & Poor's 500-stock index left dividend payers in the dust."
It's not hard to see why.
Nearly 80 companies in that index -- including long-term dividend giants like General Electric
But what most dividend investors are missing is that these dividend cuts were isolated. In fact, as this market scholar I mentioned writes, "the entire decline in dividends can be attributed to the financial sector."
In all other sectors of the S&P 500 (from retailers like CVS Caremark
This means that these stocks -- dividend payers that raised payments, yet still lag the market over the past year -- are the stocks that Wharton Business School professor and author Jeremy Siegel believes investors should be buying right now.
For specific examples
Here's a list of three companies that perfectly fit the mold I just outlined. That is, companies that have raised their dividends over the past two years, and yet are still lagging the market over that period.
|
Company |
Market Cap |
Dividend Yield |
2-Year Dividend per Share CAGR |
|---|---|---|---|
|
Boeing |
$44 billion |
2.9% |
9.6% |
|
Monsanto |
$46 billion |
1.4% |
74.9% |
|
AT&T |
$159 billion |
6.5% |
7.5% |
Data from Capital IQ, a division of Standard & Poor's. CAGR = compounded annual growth rate.
These are exactly the sorts of dividend-paying stocks that James Early, a former hedge fund analyst and current Motley Fool Income Investor advisor, looks for in his service. And a whopping 81% of his stocks are beating the market.
Recently, James put together a "core portfolio" of top dividend stocks, consisting of six dividend payers he believes every investor should use as a platform to profitable dividend investing. You can see this portfolio completely free with a 30-day trial to his newsletter as my guest today. Just click here for more information.
Adam J. Wiederman doesn't own shares of the companies mentioned above. Monsanto is a Motley Fool Inside Value recommendation. The Fool's disclosure policy is outlined here.
