5 ‘Strong Buy’ Dividend Stocks With High Upside

The markets are looking perilous right now, with rising trade tensions and Federal Reserve uncertainty sparking heavy selling.

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The markets are looking perilous right now, with rising trade tensions and Federal Reserve uncertainty sparking heavy selling. While there has been a flight out of stocks generally – Standard & Poor’s 500-stock index is off almost 6% over the past five days – dividend stocks are gaining a little appeal.

Investors were caught off guard after the Federal Reserve lowered its benchmark interest rate by a quarter-point. Some were expecting a half-point cut, and others were expecting Fed Chairman Jerome Powell to signal another quarter-point cut later in the year (he didn’t). Then America’s trade war with China flared up after President Donald Trump threatened a new round of tariffs, which the Chinese replied to by cutting off imports of U.S. agricultural products and momentarily letting its yuan currency slip above a key level.

Dividend stocks can help smooth out returns during volatile periods like this. Morgan Stanley private wealth adviser Christopher Poch is a firm believer in dividend investing. He writes, “In over 33 years in the wealth management industry, I have seen what works for the long-term, tax paying investor. The importance of dividends and the contribution to overall total return, for new and experienced investors alike, should not be overlooked.”

“Not only do dividend stocks as a group have less volatility year- to- year, they outperform nondividend paying stocks over time as well,” Poch writes. “Over the last 90+ years, dividends have accounted for more than 40% of the total return equation.”

Here are five dividend stocks that TipRanks (opens in new tab) has identified as earning a “Strong Buy” rating by Wall Street’s analyst community. Each of these stocks boasts relatively high yields between 3% and 5% – well more than the broader market’s current 1.9% – and are projected to gain between 17% and 65% over the next 12 months.

Data is as of Aug. 5. Dividend yields are calculated by annualizing the most recent monthly payout and dividing by the share price.

Harriet Lefton
Contributing Writer, Kiplinger.com
Harriet Lefton, originally from the U.K., began her career as a journalist specializing in the niche world of metal markets. She graduated from the University of Cambridge before becoming a qualified U.K. lawyer. Now she has turned her attention to the world of financial blogging, covering U.S. stocks, analysts and all manner of things finance-related.