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Buy These 3 Dividend Stocks To Hedge Your Bets

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The S&P 500 is trading close to its 52-week highs meaning that average shares in the index are trading at lofty valuations. They may have good reason to do so: the jobs data is encouraging, wages are trending higher, consumer confidence is rising and consumer spending appears stable (according to schwab.com). Additionally, oil prices are out of the doldrums and new construction activity continues to pick up.

But rising prices also increase the risk of a correction, if shares don’t perform exactly as envisaged. That’s why it may be worthwhile to take a look at stocks that yield a regular income. Because investment in these stocks will yield a return on your investment even if share prices do fall.  

What you do with that income is of course your choice. You can take the cash, or reinvest the amount in additional shares, thus further increasing the income potential.

Of course, there is the question of the amount of dividend, because what if the company pays out less in the following year? In most cases, this fear is unfounded because companies that pay dividends usually try to maintain a steady flow, failing which there can be a negative impact on share prices. Moreover, dividend paying companies are generally well established and generate steady cash flows quarter upon quarter, which is what we need to check out when looking for good dividend stocks.

So here are a few that look like attractive investments right now:

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI - Free Report)

Hannon Armstrong Sustainable Infrastructure Capital is a real estate investment trust. The Company provides debt and equity financing for infrastructure projects. Its infrastructure projects include Energy Efficiency Projects, Clean Energy Projects and Other Sustainable Infrastructure Projects. The company serves federal, state and local governments, commercial, utility, and industrial markets.

Zacks Rank #2 (Buy)

Zacks Industry Rank Top 43% (114th position out of 264 industries) (Zacks analysis shows that dividing the 264 industries in two, the top half beat the bottom half by a factor of more than 2 to 1 over the last 10 years)

5-Year Historical EPS Growth 34.13%

Dividend Yield 5.35%

The cash flow yield indicates the percentage of its market capitalization that the company generates as cash flow yearly.

 

America First Multifamily Investors, L.P.

America First Tax Exempt Investors is a consistently performing fund with a portfolio of federally tax-exempt mortgage revenue bonds; interest on these bonds is excludable from gross income for federal tax purposes. As a result, most of the income earned by the Partnership is exempt from federal income taxes.

Zacks Rank #2

Zacks Industry Rank Top 31% (82 out of 264)

5-Year Historical EPS Growth 13.7%

Dividend Yield 8.49%

 

 

Swedbank AB (SWDBY - Free Report)

Swedbank is a leading Nordic-Baltic banking group with retail customers and corporate customers in Sweden, Estonia, Lithuania and Latvia. In Sweden the group has more than 470 branches. In the Baltic countries the group has another 280 branches. Outside of the Nordic-Baltic home markets, the group is present in Copenhagen, Helsinki, Kaliningrad, Luxembourg, Moscow, New York, Oslo, Shanghai, St.Petersburg and Tokyo.

Zacks Rank #2

Zacks Industry Rank Top 13% (34 out of 264)

5-Year Historical EPS Growth 12.02%

Dividend Yield 5.72%

 

 

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