Currently, defensive stocks are selling high as investors are inclined towards stocks that are less volatile. But for some investors, dividends are not meant for defense. They are on the constant lookout for dividend stocks that are currently trading at low price but are capable of generating good yields.
There are certain companies which are sensitive towards the economic growth compared to traditional companies, which have a little to no effect with regards to the economical situation in the country.
At this time, investors can profit by investing in dividend stocks of companies that are sensitive towards the economic growth because the U.S economy is now on the rise.
Below are four stocks which are trading at low prices, but have good dividend yield prospects in store for the future:
Bank of Nova Scotia (TSE: BNS) has advanced a lot more compared to its predecessors. This advantage can prove to be either a good or a bad investment for investors in future, but for now, it seems a pretty good option to invest in.
The bank’s entrance into the Latin American market might have added a bit of volatility to its dividend stocks, but this can also be seen as a positive step towards achieving a better dividend growth in the years to come.
Bank of Nova Scotia has been paying increasingly good dividends since 1832. It has raised its dividend payouts for a whopping 43 years out of the 45 years since it came into existence. Yield of its shares recorded 4.2% and are presently trading at a price of 12 times earnings this year. According to trade analysts, its dividend growth might increase to 6% or more in 2017.
Darden Restaurants (NYSE: DRI), the owner of LongHorn Steak House, The Olive Garden and The Capital Grille and four other restaurant chains, owns a total of 1,500 restaurants in the US alone. Darden is offering a dividend yield of 3.6% and is considered to be one of the safest investments in the food and beverage sector.
Many trade analysts, along with analysts at Canaccord, are anticipating even more dividend growth as Darden has started to remodel its restaurants and menus. It has also started providing Wi-Fi services in almost all of its restaurants along with tablets on the table to order food. It has already started to sell more takeaways compared to last year.
Darden has implemented all these changes with the aim of achieving a dividend growth of between 7% and 10% in the next year. Currently the company’s shares are trading at a price of 16 times earnings this year.
Qualcomm’s (NASDAQ: QCOM) dividend shares are now yielding good profits and the payout has increased to 3.6%. This is good enough increment in the payouts compared to its five year average annual growth of 2.3%. The company doubled its dividend payouts over the past four years.
Though its dividend shares are recording a good growth percentage, surprisingly, they are now trading at a two-year low price. Qualcomm is a smartphone chip maker which also licenses its communication patents for 3G and 4G services. Its latest processor, Snapdragon, is selling well and is being used in most high-end smartphones working with Google’s Android platform.
Last quarter, Qualcomm surprised everyone by recording an unprecedented 19% growth in earnings; as a result, its share price increased over 7% in a single day. Its dividend shares are now trading at 15 times its earnings this year.
Amec Foster Wheeler (LON: AMFW), a London-based oil and gas company, that came into existence as a result of merger between oil and gas engineers Amec and Foster Wheeler, is offering an attractive dividend yield of 3.7%.
Shortly after the merger, oil prices took a plunge dragging down the profits which in turn have forced the company to reduce its dividend yields to half of what it has paid investors last year. In spite of this negative impact, the company has managed to pay a dividend yield of 3.7% this year.
Amec Foster Wheeler now only has 40% of its profits coming from its oil and gas unit, with the remaining 60% are coming from its clean energy and infrastructure divisions, making it a safe bet to invest in.
The management has changed and the new governing members are concentrating on selling some of the company’s assets and it is expected to announce the results in a meeting in November.
The company’s dividend stocks are trading at approximately half of its profits this year. However, the dividend yield is much better compared to its competitors, such as Fluor Corporation (NYSE: FLR), which has announced a dividend growth of just 1.6%.