I want to keep this short and sweet, so I’ll give you the stock and give you a few sentences why it’s a good pick. With the market acting iffy lately, you should stock up on income earners. Here are some of the best dividend stocks you should buy in 2016.
Cisco Systems (CSCO)
Dividend yield: 3.2%
Cisco Systems is an attractive blue-chip staple, and has been one for years. It hasn’t had much volatility since having a huge drop from 2000-2001. If you’re seeking capital appreciation, you might not be interested in CSCO, but it offers a juicy dividend.
Dividend yield: 4.3%
I’ve had Caterpillar on my watch list for quite some time now, and since it has been trading near its 52-week low, I’m tempted to start buying. The great news is that even though the company is near its low, it hasn’t backed off its dividend.
Dividend yield: 3.5%
While oil stocks have been hammered in 2015, Exxon is still one of the biggest companies in the world and its shares are relatively cheap. I love that Exxon has always paid a dividend and always increases it each year.
Yum! Brands (YUM)
Dividend yield: 2.5%
This might be a low dividend yield compared to the others on the list, but the company is expected to see huge growth overseas. The company operates KFC and Taco Bell – you can expect to see a ton of these popping up in China, which might lead to some capital appreciation as well.
Verizon Communications (VZ)
Dividend yield: 4.9%
In all honesty, I’m not sure how much more Verizon can grow its revenue and cash flow without hurting its core business operations. I could be wrong, but I just don’t see it. However, I love the nearly 5% dividend the company offers, which makes up for the slow revenue growth. Besides, Verizon has huge profit margins. They’ll be okay.
Kraft Heinz (KHC)
This is a huge company, and because it’s difficult to compete with giants in the food industry, Kraft Heinz has a “moat” around their business. People won’t stop eating anytime soon. Plus, Berkshire Hathaway has a large investment in the company (something like 18%), which has already made them billions. At a 3% dividend yield, you can’t complain.
Here’s full disclosure: I have been buying up (and will continue to buy) Walmart stock since its cooled down this year. In January 2015 it peaked at over $90 per share, which scared me off. Now it’s around $60 per share and, as a dividend stock, it’s a wonderful investment. Besides, it has been increasing its quarterly distribution across at least 25 consecutive years, making it a dividend aristocrat.