3 Top Dividend Stocks to Sail Through a Choppy August
Traditionally, August has been one of the most volatile months of the year for major indices. Coupled with weak earnings and economic reports, and downgrades by rating agencies, things aren’t simply looking up for the stock market at this point.
Hence, to safeguard your portfolio, invest in dividend-paying stocks like Brandywine Realty Trust BDN, Manulife Financial Corp MFC and Solaris Oilfield Infrastructure SOI. These stocks provide stable returns and are less volatile.
August a Notorious Month for the Stock Market
Major bourses in the United States wrapped up July on a positive note. However, August is here, and things may not look good for the stock market now. This is because, since 1986, August has been the worst-performing month for the stock market, per Morningstar.
In 2021, the broader S&P 500’s seven-month winning streak came to a halt in August. In reality, the “sell in May and go away” investment theory is primarily because of August, which marks a volatile phase for the stock market. Many market participants take vacations in this month, resulting in lesser trading volumes. This leads to increased gyrations in the stock market.
This August, no doubt, the stock market will be choppier than usual, thanks to a plethora of corporate earnings releases and economic data. The S&P 500 ended the first trading session of August in the red following discouraging corporate earnings results and economic reports.
Fresh Batch of Weak Earnings & Economic Data
A slowdown in domestic travel compelled JetBlue to slash guidance, while Pfizer’s shares dropped yesterday after posting disheartening quarterly results due to plunging Covid product sales. Uber’s shares also fell on mixed quarterly earnings results.
On the economic front, the latest job opening numbers came in slightly below estimates. But most importantly, manufacturing activity in the United States contracted for the eighth successive month in July as new order softness lingers.
The Institute of Supply Management’s manufacturing purchasing manager’s index came in at 46.4% in July from June’s 46%. But still, the figure remains well short of 50%, indicating contraction.
Fitch Downgrades U.S. Rating
Fitch, meanwhile, downgraded the United States' long-term rating. It was downgraded from AAA to AA+ due to the debt ceiling tussle in Washington.
The rating agency expects a fiscal deterioration in the next three-year period and an overall increase in debt burden in the United States. Fitch stated that the political standoff regarding the debt ceiling battered confidence in fiscal management.
3 Best High-Yield Stocks to Buy in August
Amid unpromising corporate earnings outcomes, weak economic activity, Fitches’ downgrades, and a historically gloomy month for stocks, the broader market may be subject to bouts of volatility soon. Thus, it is prudent for astute investors to place bets on dividend stocks at the moment.
This is because dividend players can provide a steady income despite market upheavals since they have a better-quality business model and solid underlying fundamentals. We have, thus, highlighted three such stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and provide high yields. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brandywine Realty Trust is a self-administered, self-managed and fully integrated Real Estate Investment Trust. The company has a Zacks Rank #2. It has a dividend yield of 15.1%, while its five-year average dividend yield is 7.3%.
In the past 5-year period, BDN has increased its dividend once, and its payout has advanced by 0.59%. BDN’s payout ratio presently sits at 60% of earnings. Check Brandywine Realty Trust’s dividend history here.
Manulife Financial is one of the three dominant life insurers within its domestic Canadian market and possesses rapidly growing operations in the United States. The company has a Zacks Rank #2. It has a dividend yield of 5.4%, while its five-year average dividend yield is nearly 5%.
In the past 5-year period, MFC has increased its dividend 14 times, and its payout has advanced by 9.49%. MFC’s payout ratio right now sits at 47% of earnings. Check Manulife Financial Corp’s dividend history here.
Solaris Oilfield Infrastructure manufactures and provides patented mobile proppant management systems. The company has a Zacks Rank #1. It has a dividend yield of 4%, while its five-year average dividend yield is 4.1%.
In the past 5-year period, SOI has increased its dividend two times, and its payout has advanced by 1.59%. SOI’s payout ratio at present sits at 46% of earnings. Check Solaris Oilfield Infrastructure’s dividend history here.
Brandywine Realty Trust, Manulife Financial and Solaris Oilfield Infrastructure’s expected earnings growth rates for the next year are 3.5%, 7.3% and 104.7%, respectively.
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Manulife Financial Corp (MFC) : Free Stock Analysis Report
Brandywine Realty Trust (BDN) : Free Stock Analysis Report
Solaris Oilfield Infrastructure, Inc. (SOI) : Free Stock Analysis Report
