The stock market offers opportunities every day, but healthcare is easily the sector benefiting most from the trend of aging demographics in the U.S. and throughout the developed world.
This helps explain how over the past decade, the Global Healthcare Sector has outperformed the benchmark S&P 500 by more than 20%.
Looking for cheap stocks that pay dividends? These healthcare leaders are riding the aging demographic trends to profit town and deserve your attention.
The first thing that comes to mind, when determining whether a stock is overvalued or not, is its price-to-earnings (P/E) multiple. We hereby shortlist healthcare stocks with forward P/E ratio trading below 15x. Standard criterion holds that, anything under 15x will be dirt cheap.
Because of the high market valuation, we can say today that high-quality dividend stocks with a P/E under 20 are cheap, compared to bond yields.
Attached you will get a list of the cheapest healthcare dividend stocks by forward P/E. I've excluded all stocks with a market capitalization under 2 billion. Each of the results has a forward P/E under 15 which corresponds with an earnings yield over 6.6%.
These are the 20 cheapest healthcare dividend stocks....
The health care sector includes a wide variety of companies operating in various industries, such as biotechnology, long-term care facilities, drug manufacturing, medical devices and equipment industries.
Due to an aging population in the United States, the availability of a wide spectrum of medical services to prolong life and increasing demand from baby boomers for medical services, the health care sector is poised to continue growing at an above-average rate compared to broad U.S. market returns.
From 2010 to 2015, various industries within the health care sector have generated average annual returns ranging between 17% for long-term care facilities to 34% for biotechnology companies, which is substantially above the average market return in the U.S.
Overall, the health care sector is poised to continue growing and generating excess returns due to ongoing innovation and strong patent protection. Also, due to stable cash flows and a solid pipeline of products, most health care companies can afford to pay out substantial amounts of their earnings to their shareholders, resulting in high dividend yields that average from 3 to 4% as of September 2015.
Looking for high-yielding dividend stocks from the healthcare sector? We've listed the top yielders without any restrictions. Here they are...
In an uncertain market there’s a lot to be said for having a firm foundation of dividend stocks for your portfolio. A good income play at a good price isn’t quite as sexy as a roaring momentum stock, but over the long-term, the reliable returns from dividends really add up.
Every investor needs to be biased toward income stocks right now — even if they are at or near retirement, and looking to take some risk off the table. After all, current yields are about 1.8% on T-Notes and just under 2.2% on investment-grade corporates.
Where else are you going to get income?
If you want stability, then well-priced dividend stocks will provide a great backbone for your portfolio in 2017. And if you’re looking for income, you have to remember that even conservative bond funds still have interest rate risk and could lose principle value if and when the Federal Reserve raises rates in the coming month.
In short, there’s no better place to put your money than dividend stocks right now.
Here are nine great picks to consider:
While looking for a bargain dividend stock, many investors simply screen for those with the highest yield or the one that's fallen the most in the past month.
But I take a different approach: How much of a yield will I likely be getting for my purchase 10 years from now?
That type of thinking has led to a couple of outstanding picks over the years.
For instance, I bought shares of Aflac in Feb. 2009 for $17.50. Seven years later, I now get $1.64 in dividends for every share I own. In other words, I now have a 9.4% yield. And it goes up every quarter.
Viewed through this lens, these are nearly a dozen dividend stocks that I think are bargains right now -- based on what they'll likely be paying 10 years from now.
The attached list includes all Dividend Champions with a forward P/E of less than 15. Each of the results grown dividends over more than 25 consecutive years.
These are the stocks I'm talking about...
I've often said that dividend stocks are the foundation of a great retirement portfolio -- and for good reason. For starters, companies that pay dividends usually have a long history of profitability and a sound long-term outlook.
A business that doesn't have a clear path to growth typically isn't going to pay a dividend. In other words, buying dividend stocks often means buying into high-quality, profitable companies with long histories of success.
Secondly, dividend stocks can help hedge the stock market's inevitable moves lower. Since 1950, the S&P 500 has corrected lower by at least 10% (when rounded to the nearest digit) on 35 occasions.
Owning dividend stocks is a great way to help hedge against these market swoons. As an added bonus, since dividend stocks tend to attract long-term investors, they can sometimes also be far less volatile during corrections.
Lastly, dividend stocks give you the ability to take advantage of compounding over time by reinvesting your payout back into more shares. Doing so allows your ownership in a business to grow, as well as your corresponding payout. Compounding is a tactic some of the smartest money managers use to increase the value of their funds over time.
But some of the best dividend stocks can be found floating well below investors' radars. Attached you will find three high-yield bargain dividend stocks you've probably been overlooking this fall. Every of the results has a dividend yield over 4% and a debt-to-equity below one.
These are the results...
