What are the best dividend stocks to buy after the pullback? In my last blog post, Dividend Stocks and Investment Timing, I noted that a pullback provides a great opportunity to buy a high yielding dividend stock at a reduced price. The net effect of the lower price is that your yield goes higher. As long as the company is healthy, continues to pay dividends, and doesn’t fall out of bed, you have just increased your return.
Today, I took a look at the landscape, and found the 5 best dividend stocks that Chaikin Analytics rates as Bullish or above (likely to outperform in the next one to six months), and offers a yield of over 5%. I stayed away from REITs and other real estate-related companies, and stuck with meat and potatoes companies. Additionally, I shied away from even some of the best dividend stocks where the payout ratio is above 70% which might call into question the longevity of the dividend. So without further ado, here are 5 opportunities to grab a 5%+ yield on the best dividend stock with decent appreciation potential.
AYR - Aircastle Ltd.
This stock sports a 6.08% dividend with a less than 50% payout ratio. Analysts view this company well, and the stock did not take a major hit in the recent pullback, but did decline by about 5% (which increased the dividend above 6%).
T - AT&T
No dividend report would be complete without a discussion of one of the best dividend stocks, AT&T. While there is some risk because of the debt load, AT&T has almost a 6.5% dividend. While it did get hit in the pullback, AT&T bounced back quickly. It has great Cash Flow that is growing, and while Earnings have not been growing quickly, Analysts do expect a pickup shortly. But as long as AT&T can comfortably pay its bills, it should keep paying out that massive dividend.
ETM - Entercomm
Next we have Entercomm, a radio broadcasting company with properties scattered around the U.S. They believe that the diversity of geographic locations does provide some insulation from a downturn.
They were impacted by the pullback, which has raised their dividends to over 5.7%. They have a relatively conservative 55.38% payout ratio, They have solid consistent earnings, but estimates have been moving in the wrong direction.
F - Ford
Again, no dividend report would be complete without a discussion of Ford, another one of the best dividend stocks. Although they are in a highly cyclical industry, Ford has proven to be one of the best at riding out the storm. They had a fantastic earnings report recently which has boosted the stock. So there is no discount right now. But there is a 5.8% dividend with a conservative 46% payout ratio.
Additionally, earnings have been strong, and recently analysts have been raising their outlook for Ford. This could be another great stock to add to your portfolio.
PACW - PacWest Banccorp
PacWest is a bank up in the great NorthWest. With a great track record of Earnings Growth and with Analysts relatively bullish on the stock, PacWest is a solid opportunity. Recently, the stock pulled back 5% which makes it even more attractive.
It pays a whopping 6.35% dividend. While the payout ratio is a little high at 65%, I feel comfortable given the solid track record of consistent earnings growth.
The best part about these five companies is that they hail from distinctly different industries. A radio company, a telephone/media company, an auto manufacturer, a bank and a transportation company. This would make the underpinnings of a solid dividend portfolio which would earn over 6%!
There are some great dividend values in the marketplace, and when a pullback makes the best dividend stocks 5% cheaper, it is a great value.