The third group is for yield-hungry investors but comes with an elevated risk, and we urge investors to exercise caution. The first list is for conservative and risk-averse investors, while the second one is for investors who seek higher yields but still want relatively safe dividends.
This month, we highlight three groups of five stocks each that have an average dividend yield (as a group) of 4.09%, 6.66%, and 7.32%, respectively. Please note that these are not recommendations to buy but should be considered as a starting point for further research. While seeking cheaper valuations, we also demand that the companies have an established business model, solid dividend history, manageable debt, and investment-grade credit rating. However, that's not the only criteria that we apply. We usually highlight five stocks that may have temporary difficulties or lost favor with the market and offer deep discounts on a relative basis. However, our focus is limited to dividend-paying stocks. This article is part of our monthly series, where we scan the entire universe of roughly 7,500 stocks that are listed and traded on US exchanges, including over-the-counter (OTC) networks. Besides, we think, every month, this analysis is able to highlight some companies that otherwise would not be on our radar. We believe in keeping a buy list handy and dry powder ready so that we can use the opportunity when the time is right. We remain on the lookout for such companies when they are trading cheap on a relative basis to the broader market as well as to their respective 52-week highs. So, it's all the more important that we invest in companies that have many years of dividend history, pay growing and sustainable dividends, and have low or manageable levels of debt. At the same time, we do not want to lose our sleep over our investments. The market is not easy to navigate, even during the best of times. These DGI stocks are not going to make anyone rich overnight, but if your goal is to attain financial freedom by owning stocks that should grow dividends over time, meaningfully and sustainably, then you are at the right place.
#Safe cheap stocks to buy now series#
The goal of this series of articles is to find companies that are fundamentally strong, carry low debt, support reasonable, sustainable, and growing dividend yields, and also trade at relatively low or reasonable prices. Naturally, it helps to buy such companies when they're being offered relatively cheap. We should always remind ourselves that there's only one thing certain in markets, and that's "uncertainty," and our portfolios should be structured in such a way that they provide decent and proportionate returns when the market is booming but preserve the capital when times get tough.Īs long-term DGI investors, we need to pay attention to the quality of companies that we buy and the price we pay. There is one thing that is sure to stay in for the foreseeable future is the high volatility.Īs always, being long-term investors, we don't pay less attention to short-term market noise and rather keep the focus on the long-term game plan.
The only silver lining at the moment is that almost everyone is expecting a recession, and the sentiment is vastly bearish, and that, in fact, may be a good sign for the stocks, at least in the short term. Will the Fed be successful in taming inflation while still avoiding a full-blown recession? It is anybody's guess, but the market is very wary of their ability to do so. Needless to say, all eyes are on the Fed. It is hard to say if this was the lowest point in this cycle or if this is just a bear market relief rally. More recently, the S&P 500 declined to the edge of the bear market, but since then, it has come back up a little bit.
Obviously, the year 2022 has been really tough for most investors.
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