Best Dividend Stocks for February 2020

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For decades, income-minded investors have searched for the best dividend stocks out there. In my experience, the main criteria to look for when betting on great dividend stocks are a history of strong fundamentals, increasing dividend distributions over time, great entry points (technicals), and a history of bullish trading activity in the shares. 

The hallmark way I go about finding the best dividend stocks – the outliers – is by looking for quiet unusual trading activity. Oftentimes, that can be institutional activity … i.e., big money. I’ll go over what that unusual trading activity looks like in a bit. But the five stocks I see as long-term dividend growth candidates are AbbVie Inc. (ABBV), Lowe’s Companies, Inc. (LOW), McDonald’s Corporation (MCD), Starbucks Corporation (SBUX), and Skyworks Solutions, Inc. (SWKS).

Over decades, I’ve learned that the true tell on great stocks is that big money consistently finds its way into the best companies out there … especially dividend-paying stocks. Some of the biggest returns ever have come from holding stocks for many years and reinvesting dividends. I am a very long-term minded person and see dividend investing as a pillar in personal finance and financial independence. I marry what I’ve learned on Wall Street and decades of investment experience in my blog, PersonalFinanceKid.

I take a well-rounded approach and rank each stock by technicals (long-term), fundamentals (long-term), and if there is big money supporting the stock. I want the odds on my side when looking for the highest-quality dividend stocks … and I own many of them. Many times, when a stock is under pressure, it’s worthy of inspection. As stock prices head lower, the dividend yield increases. That is important for dividend seekers.

Up first is AbbVie Inc. (ABBV), which is a health care leader. The company is consistently growing and raising its dividend. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies experiencing a pullback in the shares.

  • One-month performance: -4.10%
  • Historical big money buy signals

Just to show you graphically how I look to look at stocks, below are the big money signals AbbVie stock has made the over the past year. Green bars are showing that AbbVie was likely being bought by an institution according to Mapsignals, while red bars indicate selling. It is clear that there is a lot of green recently with this stock. That’s exactly what you want to see when looking for a great dividend growth name after a lengthy pullback the prior year.

www.mapsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, AbbVie has a strong dividend history:

  • Three-year dividend growth rate: +21.1%
  • Current dividend per share: $1.18
  • Current yield: 5.63%
  • Three-year earnings growth rate: +5.81%

Next up is Lowe’s Companies, Inc. (LOW), which is a leading home hardware company with a rich dividend history that is seeing buying pressure recently. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies experiencing unusual buying in the shares.

  • Six-month performance: +17.64%
  • Recent big money buy signals

Below are the big money signals that Lowe’s stock has made over the past year. It is clear that the stock is seeing demand.

www.mapsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Lowe’s has a strong dividend history.

  • Three-year dividend growth rate: +20%
  • Current dividend per share: $0.55
  • Current yield: 1.82%
  • Three-year earnings growth rate: +4.87%

Next, I’m looking at McDonald’s Corporation (MCD), which is a leading fast-food chain. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies seeing buy pressure after a pullback.

  • One-month performance: +6.85%
  • Recent big money buy signals

Below are the big money signals that McDonald’s has made over the past year. It is clear that the stock is seeing demand again.

www.mapsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, McDonald’s has a strong dividend history.

  • Three-year dividend growth rate: +6.8%
  • Current dividend per share: $1.25
  • Current yield: 2.38%
  • Three-year earnings growth rate: +16.46%

Next, I’m looking at Starbucks Corporation (SBUX), which is a leading coffee chain company. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies experiencing a pullback or flat performance.

  • Three-month performance: +1.33%
  • Recent big money buy signals

Below are the big money signals that Starbucks has made over the past year.

www.mapsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Starbucks has a strong dividend history.

  • Three-year dividend growth rate: +21.6%
  • Current dividend per share: $0.41
  • Current yield: 1.85%
  • Three-year earnings growth rate: +7.56%

Lastly, I’m looking at Skyworks Solutions, Inc. (SWKS), which is a leading semiconductor company. When deciding on a strong candidate for long-term dividend growth, I like to look for leading companies experiencing buying in the shares:

  • Three-month performance: +31.93% 
  • Recent big money buy signals

Below are the big money signals that Skyworks Solutions has made over the past year. The latest earnings report was very strong.

www.mapsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Skyworks Solutions has a strong dividend history.

  • Three-year dividend growth rate: +14.2%
  • Current dividend per share: $0.44
  • Current yield: 1.47%
  • Three-year earnings growth rate: -2.15%

The Bottom Line

AbbVie, Lowe’s, McDonald’s, Starbucks, and Skyworks Solutions shares represent a potential buying opportunity for the long-term dividend investor. Given the strong historical dividend growth and recent big money sell signals from unusual trading, these stocks could be worth a spot in a yield-oriented portfolio. 

Disclosure: At the time of publication, the author holds long positions in AbbVie, Starbucks, and Skyworks Solutions but no positions in Lowe’s and McDonald’s.

Source: Investopedia

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