Investing in the stock market right now with the hopes that you’ll make a killing within the next few months to a year is a fool’s strategy. I’ve already mentioned that you need to take a long term view when the market is as rocky as it is, but there are still ways to make money in this market right now that will see you receiving some lovely checks arrive in your mailbox from blue chip stocks with high dividends.
Buying for the income is a great strategy right now because most stocks are still a little slow at increasing in value. And if you compare the interest rates of most high interest savings accounts (high interest HA!) then their lousy one or two percent return is quite pitiful when you can still buy a good blue chip company that has dividend yields of three, four and even five percent per annum.
So let’s have a quick look at some of these companies to see if they make a good investment choice or not.
In the Dow Jones, I’ve already shown you that thirteen of the thirty blue chip stocks have div yields of 3% or higher.
There they are again:
CVX – 3.1%
DD – 3.4%
GE – 3.5%
HD – 3.2%
INTC – 4.0%
JNJ – 3.5%
KFT – 3.3%
MRK – 4.7%
PFE – 4.4%
PG – 3.4%
T – 6.0%
TRV – 3.1%
VZ – 5.6%
Now you could go right ahead and start investing in any of these stocks immediately and make a good income, but you still want to be smart about which one’s that you choose.
Of these companies the best options (that fit all of the 5 Simple Rules) are CVX (Chevron), HD (Home Depot), INTC (Intel), PG (Procter and Gamble) and VZ (Verizon).
The columns here include the Company Stock Code, Return on Equity (showing those above 15%), Positive Qrtly Earnings, Debt to Equity under 75, stock price increase over the past 52 weeks and their dividend yields. (Taken from my Excel spreadsheet).
So there you go – five GREAT blue chip companies that fit all of my fundamental rules AND have dividend yields above three percent per annum.
Oh and just in case you missed it, I’ve also created a lovely free guide to the 10 best dividend paying stocks in the Dow Jones. Did I mention it’s free. Oh yeah!