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3 Dividend Stocks to Play Safe Amid Market Mayhem

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Following a political crisis in Sri Lanka on Oct 26 and a far-right candidate winning the presidential election in Brazil on Oct 28, most of the Asia-Pacific markets were down on Oct 29. However, most of the indexes were revived moderately on Oct 30 after the China Securities Regulatory Commission said it would enhance market liquidity and pump more long-term capital into the market.  

Asian markets have been feeling the heat of U.S.-China trade war since July, but the U.S. sanctions on China’s military significantly impacted the Shanghai Composite Index (SCI) and Hong Kong’s Hang Seng Index (HSI) with losses of 10% and 12.6% since Sep 21.In fact, over the past month, Nikkei 225, ASX 200 and Kospi have lost 14%, 8.3% and 17.3%, respectively.

As the geopolitical and economic tensions could linger and keep the U.S. markets uncertain in the upcoming months, it could be safer to bet on stocks that offer steady dividend payments.

Global Political Uncertainty Could Keep Investors Apprehensive

The U.S.-China trade war has kept the stock markets volatile for months and the recent developments in global politics add to investors’ concerns.

Brazil’s Jair Bolsonaro, a far-right candidate, is set to be the Latin American nation’s next president with 55.5% votes. Bolsonaro will replace leftist Fernando Haddad.

Per a CNBC report, in the aftermath of Bolsonaro’s victory, the Tokyo-listed Brazilian stock exchange traded fund climbed 10.8% following earlier gains of 14%. Brazil’s Bovespa index also gained more than 8% in October, ahead of the presidential election’s second round.

Sri Lankan President Maithripala Sirisena replaced Prime Minister Ranil Wickremesinghe with ex-president Mahinda Rajapaksa last week, giving rise to much violence in the Asian nation.

During Rajapaksa’s tenure as president from 2005-2015, Sri Lanka had borrowed from China to build the Hambantota Port. After his dismissal, Sri Lanka struggled to pay off the debt for a port that attracted no ships to its shores. The highly ambitious project had failed and Sri Lanka was forced to hand it over to China in 2017.

Although Rajapaksa is a pro-China official, his new position failed to cheer Chinese markets on Oct 29.

Why Dividend Stocks are Appropriate Now

The biggest advantage of dividend-paying stocks is the steady stream of income. Also, as most dividend-paying stocks belong to well-established companies that are financially sound, the price performances of these stocks usually don’t fluctuate much.

The revenue-producing operations of these companies are rarely affected to a large extent because of economic, business or geopolitical reasons, making their stocks ideal for investments during market turbulences.

4 Dividend Stocks to Buy

Choosing dividend stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) could ensure steady returns amid the market mayhem. The companies we picked also have a market capitalization of more than $1 billion.

Macquarie Infrastructure Company MIC owns, operates and invests in a diversified group of infrastructure businesses, which provide basic, everyday services, in the U.S. and other developed countries. The company bears a Zacks Rank #1 (Strong Buy). Macquarie Infrastructure offers an impressive dividend yield of 10.6% and has a five-year average dividend yield of 6.9%. The company’s five-year historical dividend growth rate is 7.5%.

GasLog Partners LP GLOP owns, operates and acquires LNG carriers with multi-year charters. The company charges customers for the transportation of their LNG using its LNG carriers. GasLog sports a Zacks Rank #1 and offers a dividend yield of 8.4%. The company has a five-year average dividend yield of 8% and five-year historical dividend growth rate of 13.3%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Black Stone Minerals, L.P. BSM is a natural gas and gas company in the United States. The company carries a Zacks Rank #2 (Buy) and offers a robust current dividend yield of 8.1%. Black Stone has a five-year average dividend yield of 6% and a five-year historical dividend growth rate of 39%.

Cedar Fair, L.P. (FUN - Free Report) and its affiliated companies own and operate five amusement parks: Cedar Point, Knott's Berry Farm, Dorney Park & Wildwater Kingdom, Valleyfair, and Worlds of Fun/Oceans of Fun. The company offers a dividend yield of 7.2% and carries a Zacks Rank #2. Cedar Fair has a five-year average dividend yield of 5.5% and its five-year historical dividend growth rate is 6%.

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