Best Dividend Stocks for March 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 The Home Depot, Inc. (HD), QUALCOMM Incorporated (QCOM), Microsoft Corporation (MSFT), UnitedHealth Group Incorporated (UNH), and Cisco Systems, Inc. (CSCO).

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 The Home Depot, Inc. (HD), which operates home and garden retail stores. They company is consistently growing and raising its dividend, having recently increased its payout by 10%. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies showing strong technical performance.

  • One-month performance: +1.77% 
  • Historical big money sell signals

Just to show you graphically how I look to look at stocks, below are the big money signals Home Depot stock has made over the past year. Green bars are showing that Home Depot was likely being bought by an institution according to Mapsignals, while red bars indicate selling. It is clear that there was a lot of red a few months back. Once the red was done, the shares saw a nice lift. That’s exactly what you want to see when looking for a great dividend growth name.

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, Home Depot has a strong dividend history.

  • Three-year dividend growth rate: +25.4%
  • Current dividend per share: $1.50
  • Current yield: 2.55%
  • Three-year earnings growth rate: +17.3%

Next up is QUALCOMM Incorporated (QCOM), which is a leading semiconductor company. It has a rich dividend history, and the stock is seeing selling pressure recently. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies experiencing unusual selling in the shares.

  • One-month performance: -8.49% 
  • Recent big money sell signals

Below are the big money signals that QUALCOMM stock has made over the past year. It is clear that the stock is pulling back, marking a nice entry point.

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, QUALCOMM has a strong dividend history, and its recent troubles with Apple Inc. (AAPL) could put the chipmaker in a better financial position going forward.

  • Three-year dividend growth rate: +7.1%
  • Current dividend per share: $0.62
  • Current yield: 3.11%
  • Three-year earnings growth rate: -177.6%

Next, I’m looking at Microsoft Corporation (MSFT), which is a leading software firm. When deciding on a strong candidate for long-term dividend growth, I like to look for leading companies seeing continued buy pressure.

  • One-month performance: +5.15% 
  • Recent big money buy signals

Below are the big money signals that Microsoft stock 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, Microsoft has a strong dividend history.

  • Three-year dividend growth rate: +9%
  • Current dividend per share: $0.51
  • Current yield: 1.2%
  • Three-year earnings growth rate: +48.46%

Next, I’m looking at UnitedHealth Group Incorporated (UNH), which is a leading health insurance company. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies experiencing a pullback:

  • One-month performance: -7.42% 
  • Recent big money sell signals

Below are the big money signals that UnitedHealth stock 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, UnitedHealth has a strong dividend history.

  • Three-year dividend growth rate: +20.3%
  • Current dividend per share: $1.08
  • Current yield: 1.64%
  • Three-year earnings growth rate: +26.39%

Lastly, I’m looking at Cisco Systems, Inc. (CSCO), which is a leading global networking company. When deciding on a strong candidate for long-term dividend growth, I like to look for leading companies experiencing selling in the shares.

  • One-month performance: -11.19% 
  • Recent big money sell signals

Below are the big money signals that Cisco has made the past year. The company also raised its dividend recently.

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, Cisco has a strong dividend history:

  • Three-year dividend growth rate: +13.1%
  • Current dividend per share: $0.36
  • Current yield: 3.42%
  • Three-year earnings growth rate: +4,313.73%)

The Bottom Line

Home Depot, QUALCOMM, Microsoft, UnitedHealth, and Cisco 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: The author holds long positions in Home Depot, QUALCOMM, Microsoft, UnitedHealth, and Cisco at the time of publication.

Source: Investopedia

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