With the S&P 500 index officially having entered a bear market after losing 20% year to date, it’s more essential than ever to make sure your investments allow you to sleep well.
Investors may benefit from dividend-growing companies with a consistent track record by adding significant reliability to their portfolios.
Verizon Communications (VZ 0.56%) and Target (TGT -2.54%) are two safe-havens. Here is why each stock could provide safety to any portfolio.
A “staple” with a five percent yield
Verizon is a market leader in the broadband and wireless industries, as well as device sales. Verizon is a major player in the industry, pioneering the 5G networking movement. In recent years, the firm has struggled to expand, but it makes up for it with dividend yield and profitability.
In the last three years, revenues have been between $128 billion and $134 billion each year, with operating margins in the range of 22 to 24 percent. Which has allowed the firm to generate more cash flow, allowing it to keep the dividend. The most recent stock decline has pushed the dividend yield well over 5 percent.
Investors may enjoy the stock price decline because they can obtain almost the highest yield paid by Verizon in recent years. This might be a fantastic chance to lock in gains. There is really no telling where the market will go in the near term, and Verizon’s share cost might fall further, but investors can sleep well knowing they are receiving a high return on an excellent firm.
Short-term problems should not distract from long-term strengths
Target has made headlines lately for all the wrong reasons. In May, when the firm published first-quarter 2022 results, one of the headlines stated that it had underestimated its inventory, causing it to have an overabundance of big items such as outdoor furniture, kitchen appliances, and televisions. Since then, shares have fallen almost 14%.
The inventory concerns are worth keeping an eye on since they may have a major impact on the financial performance. However, looking past this short-term problem, there is still much to admire about Target’s business and long-term potential.
Target has been very generous to shareholders in recent years. In Q1, the firm repurchased $10 million of stock, and over the previous five years, it decreased its shares outstanding by over 15%. The dividend yield is now 2.58%, significantly outpacing the S&P 500’s yield of 1.37 percent.