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10 Slow and Steady Stocks to Own in Any Market in 2020

Posted on Tuesday, September 25th, 2018 by Chris Markoch
10 Slow and Steady Stocks to Own in Any MarketWe’re all familiar with the phrase “slow and steady wins the race”. It applies to many things in life and none more so than investing. Consistency and discipline are the hallmarks of building a robust portfolio that can weather any kind of market.

Slow and steady growth can also be good when it comes to defining the particular stocks that investors put in their portfolio. But like most things in life, too much of a good thing can be a bad thing. So while we recommend that you consider any, or some, of the stocks we're about to review, every investor needs to look for diversification in their portfolio, with the idea that diversification means more than just investing in different asset classes, but also being diversified within asset classes.

With that in mind, here are 10 slow and steady stocks that you can put in your portfolio and enjoy watching them grow. It’s no coincidence that many of these stocks offer a dividend. What you might not expect is not a single utility stock is among them.

#1 - General Mills (NYSE:GIS)

General Mills logo

General Mills (NYSE: GIS) For many investors, the question regarding buying General Mills was if their dividend yield (one of the highest in the market) justified growth that was inconsistent and in some cases non-existent. General Mills stock has been assailed by rising commodity prices and low demand. That is not normally a good combination for investors to digest with their morning cereal. And investors, at least initially, have not responded positively to their latest earnings report. That could be a mistake. To begin with, the stock is trading at a 10-year low valuation of 12 times earnings and has a P/E ratio of just over 16 (the S&P 500 Index is at 18). It also appears that cost-cutting measures are taking root. In the quarter just ended, General Mills saw their operating cash flow increase from 509 million to $607 million, easily allowing the company to make a dividend payment of approximately $300 million that equates to a 4% dividend yield at current prices. The company is also reporting modest increases in both pricing and market share in many of its core categories.

About General Mills
General Mills, Inc manufactures and markets branded consumer foods worldwide. The company operates in five segments: North America Retail; Convenience Stores & Foodservice; Europe & Australia; Asia & Latin America; and Pet. It offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grain, fruit, and savory snacks, as well as organic products, including refrigerated yogurt, nutrition bars, meal kits, salty snacks, ready-to-eat cereal, and grain snacks. Read More 

Current Price: $58.70
Consensus Rating: Hold
Ratings Breakdown: 7 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $63.25 (7.8% Upside)



#2 - Verizon (NYSE:VZ)

Verizon Communications logo

Verizon (NYSE: VZ) - It might seem strange to be listing a telecommunications company as a growth stock in 2018, but the market is undergoing transformational changes that play to Verizon's strength as a market leader. The game changer in the next few years is going to be the conversion to a 5G network. It seems like only yesterday, 3G was the next big thing, but even as the market matures (and maybe because of it), there is a demand for  5G networks that are already taking shape in major metropolitan areas and you know it won't stop there. Verizon is forecasting a nearly $18 billion investment into 5G. If it succeeds and can be first to market, it will have a competitive advantage that should allow it to lift its revenue (which has been a sticky issue for investors). That would be a major tipping point for this telecom giant who already has one of the highest dividend yields (4.47%) of any dividend stock. It also has an attractive P/E of around 15.5.

About Verizon Communications
Verizon Communications Inc, through its subsidiaries, offers communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The company's Wireless segment provides wireless voice and data services; Internet access on various notebook computers and tablets; international travel wireless services; and network access services to deliver various Internet of Things products and services, as well as offers digital advertising and digital media services platforms. Read More 

Current Price: $59.19
Consensus Rating: Hold
Ratings Breakdown: 9 Buy Ratings, 15 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $62.29 (5.2% Upside)



#3 - Wells Fargo (NYSE:WFC)

Wells Fargo & Company logo

Wells Fargo (NYSE: WFC) Wells Fargo has had some formidable challenges recovering from the financial crisis of 2008. The bank is constrained under an asset cap of $1.95 trillion while it seeks to implement reforms that will convince the market that they will not put their customers into future harm. Back in March, Warren Buffett was absolutely bullish on the stock in the long term. And the long-term view may be what investors need to take. WFC recently announced plans to cut their labor force between 5%-10%, which is a cost-cutting measure as the bank tries to increase their profits while still operating under the Fed’s asset cap. But with a price-earnings ratio around 15.5 and a stock that is trading at a considerably lower price per share than its competitors, it looks to have a nice valuation. If the company can start exceeding, or at least meeting, EPS forecasts, it may be time for investors to give the stock a closer look.

About Wells Fargo & Company
Wells Fargo & Company, a diversified financial services company, provides banking, investment, mortgage, and consumer and commercial finance products and services to individuals, businesses, and institutions in the United States and internationally. It operates in three segments: Community Banking, Wholesale Banking, and Wealth and Investment Management. Read More 

Current Price: $23.32
Consensus Rating: Hold
Ratings Breakdown: 7 Buy Ratings, 16 Hold Ratings, 3 Sell Ratings.
Consensus Price Target: $33.61 (44.1% Upside)



#4 - Microsoft (NASDAQ:MSFT)

Microsoft logo

Microsoft (NASDAQ: MSFT) This is not your parent's Microsoft. Gone are talks of operating systems. This company is competing and having success in areas as diverse as cloud computing, artificial intelligence, and gaming (you heard that right, gaming). Since undergoing a management change in 2014, Microsoft has picked its battles wisely. It abandoned the mobile operating systems space – a concession to Google and Apple – and refocused on making its Office 365 productivity suite accessible to once-rival platforms. But Microsoft is not resting in their past, they are aggressively investing in their future. One example is their Intelligent Cloud segment that is helping Microsoft occupy the number two slot in cloud computing, only behind Amazon. In a market that is expected to nearly double from 2017 to 2018, Microsoft is well positioned for growth. And the software giant is also busy in the acquisition space acquiring GitHub (strengthening its position in the global developer community) and LinkedIn (enhancing its role in the CRM space). All of this means that despite its lofty valuation of 29 times earnings, Microsoft is still a stock that can deliver steady growth for years to come. 

About Microsoft
Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Its company's Productivity and Business Processes segment offers Office 365 commercial products and services, such as Office, Exchange, SharePoint, Skype for Business, Microsoft Teams, and related Client Access Licenses (CALs); Office 365 consumer services, including Skype, Outlook.com, and OneDrive; LinkedIn online professional network; and Dynamics business solutions comprising financial management, enterprise resource planning, customer relationship management, supply chain management, and analytics applications for small and medium businesses, large organizations, and divisions of enterprises. Read More 

Current Price: $203.19
Consensus Rating: Buy
Ratings Breakdown: 32 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $217.45 (7.0% Upside)



#5 - General Electric (NYSE:GE)

General Electric logo

General Electric (NYSE: GE) - If it surprises you to see GE on this list, you’re probably not alone. The company has faced significant challenges in the last few years. However, many of the problems centered on their now-defunct financial services business. For the better part of 20 years, the company was dealing with a case of mistaken identity. They had become so diverse, that investors didn't know what they were. However, they have shed themselves of that label and are now well positioned to compete and win, in their core industrial businesses which are where they anticipate repeating business that at least one analyst suggests could lead them to see a 30-50% appreciation in share price simply due to valuation. That's on top of a dividend yield that currently sits over 4%, making it one of the more compelling dividends in the industry. Many investors have bailed on GE, but a closer look shows that the future may be getting brighter every day. 

About General Electric
General Electric Company operates as a high-tech industrial company worldwide. It operates through Power, Renewable Energy, Aviation, Oil & Gas, Healthcare, Transportation, Lighting, and Capital segments. The Power segment offers technologies, solutions, and services related to energy production, including gas and steam turbines, generators, and high voltage equipment; and power generation services. Read More 

Current Price: $6.06
Consensus Rating: Buy
Ratings Breakdown: 8 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $9.13 (50.7% Upside)



#6 - Starbucks Corporation (NASDAQ:SBUX)

Starbucks logo

Starbucks Corporation (NASDAQ: SBUX) - Has Starbucks really become a slow and steady stock? Yes, and with good reason. Starbucks is one of the leaders in multi-channel marketing. Their name is still synonymous with their sector, and despite more competitors entering the space, the company still benefits from one of the best loyalty programs in the industry. If you’re looking for another big reason, think China where Starbucks enjoys a large market share. And a story that may not be drawing as much attention as it should is that, as a consumer discretionary stock, Starbucks tends to do well when consumer wages increase. That’s been the case recently – a data point that was not reflected in their recent earnings statements. That means more customers may be willing to add a latte or two to their daily routine and with improvements in their mobile app and in-store experience, Starbucks can be well positioned to capture these dollars. And keep in mind, although their earnings have disappointed for a couple of years, their stock has still comfortably outperformed the S&P 500. They also have the resources to entice shareholder dollars through both stock buybacks and a dividend yield that recently jumped 20%.

About Starbucks
Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in four segments: Americas; China/Asia Pacific; Europe, Middle East, and Africa; and Channel Development. Its stores offer coffee and tea beverages, roasted whole bean and ground coffees, single-serve and ready-to-drink beverages, iced tea, and food and snacks; and various food products, such as pastries, breakfast sandwiches, and lunch items. Read More 

Current Price: $83.04
Consensus Rating: Buy
Ratings Breakdown: 14 Buy Ratings, 13 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $84.17 (1.4% Upside)



#7 - Medtronic PLC (NYSE:MDT)

Medtronic logo

Medtronic PLC (NYSE: MDT) - One way to look for companies that should provide slow and steady growth is to look at the sectors where demand for their products and services will be high. Such is the case for Medtronic which specializes in medical equipment devices that figures to see continued revenue growth that coincides with an aging population. Although over half of the company’s revenues come from the United States, they have a growing international presence, most notably in Western Europe and Japan. One of the key strategic advantages the company enjoys is the barriers to entry for competitors based on the highly regulated nature of its market. In addition to an expectation of future revenue growth, investors have come to expect solid dividend performance from Medtronic. The company is a dividend aristocrat, upping its dividend for 40 consecutive years, most recently they raised their dividend 7% in 2017 bringing their annual compounded dividend to 16.4% annually over a 20-year period.

About Medtronic
Medtronic plc develops, manufactures, distributes, and sells device-based medical therapies to hospitals, physicians, clinicians, and patients worldwide. It operates through four segments: Cardiac and Vascular Group, Minimally Invasive Therapies Group, Restorative Therapies Group, and Diabetes Group. Read More 

Current Price: $101.27
Consensus Rating: Buy
Ratings Breakdown: 21 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $116.93 (15.5% Upside)



#8 - Lowe’s Companies Inc. (NYSE:LOW)

Lowe

Lowe’s Companies Inc. (NYSE: LOW) - When the financial crisis hit, the DIY segment got crushed as housing prices decreased and consumer confidence plummeted. However, even as this bull market moves into its ninth year, the DIY market continues to show strength as consumer confidence remains high and is being supported by high employment and rising home prices. Beyond its strong customer base of “do-it-yourself” homeowners, Lowe’s enjoys strong relationships with the “do-it-for-me” contractors and the construction trades. Add to that a nationwide network of stores, and their breadth of product and it becomes clear that Lowe’s has some key competitive advantages in this space. The prospect of revenue growth should help the company garner investment interest which it already gets from its record of issuing increasingly larger dividends. In fact, in the last five years, their dividend has increased by 17%. The stock has made an impressive gain in 2018, bouncing off lows near $75 per share to their current level of $114 per share.

About Lowe's Companies
Lowe's Companies, Inc, together with its subsidiaries, operates as a home improvement retailer in the United States, Canada, and Mexico. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It provides home improvement products in various categories, such as lumber and building materials, appliances, seasonal and outdoor living, tools and hardware, fashion fixtures, rough plumbing and electrical, paint, millwork, lawn and garden, flooring, and kitchens. Read More 

Current Price: $158.52
Consensus Rating: Buy
Ratings Breakdown: 29 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $166.68 (5.1% Upside)



#9 - Honeywell (NYSE:HON)

Honeywell International logo

Honeywell (NYSE: HON) - Honeywell typically delights investors with their track record of under promising and over delivering. But rather than being a case of simply creating low expectations, Honeywell's forecasts are based on their investment in what they call their breakthrough initiatives that are looking like they are ready to start delivering results, particularly in the aerospace sector. Honeywell has recently completed a period of intense investment in those growth initiatives and is now taking aggressive steps to meet their capital deployment goals. In the coming years, Honeywell expects to deliver more free cash flow (FCF) conversion from net income and they have plans to realize an increase in organic growth as a result of higher earnings and cash flow. Honeywell is another dividend aristocrat, paying out an increasingly high dividend for over 20 years. In 2017, they raised their dividend by 12%. With a current stock price of over $165, Honeywell is trading at a robust P/E ratio of 38. However, analysts project that they will be trading at just 13.6 times earnings and FCF in 2022.

About Honeywell International
Honeywell International Inc operates as a diversified technology and manufacturing company worldwide. Its Aerospace segment supplies products, software, and services for aircrafts and vehicles. This segment offers auxiliary power units, propulsion engines, integrated avionics, environmental control and electric power systems, engine controls, flight safety, communications, navigation hardware, data and software applications, radar and surveillance systems, aircraft lighting, advanced systems and instruments, satellite and space components, and aircraft wheels and brakes; spare parts; repair, overhaul, and maintenance services; and connected solutions and data services for the aftermarket, as well as provides wireless connectivity and management and technical services. Read More 

Current Price: $158.76
Consensus Rating: Buy
Ratings Breakdown: 12 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $161.76 (1.9% Upside)



#10 - Apple (NASDAQ:AAPL)

Apple logo

Apple (NASDAQ: AAPL) - Can there really be a list of slow and steady stocks to own in any market that doesn't include Apple? Apple is currently the world's most valuable company by market cap, and it has been the "apple of Warren Buffett's eye" for many years – even though he doesn't personally own any of their products. Their iconic iPhone's have a global market share of 11% and the company keeps launching new versions with a consumer market that shows no signs of being saturated. In fact, the iPhone represented 60% of the company's sales in 2017. And Apple figures to be a major player for years to come as it commits approximately 5% of its revenues to research and development so that they will be positioned to be an innovator in the mobile space. While it's true that Apple benefits from their iOS operating system that has created a product ecosystem, the fact that they continue to generate customer loyalty is very impressive. Apple has only started issuing dividends in the last 10 years, but they have shown a commitment to growing their dividends. Currently, they are increasing their dividends by around 10% annually.

About Apple
Apple Inc designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. It also sells various related services. The company offers iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi-purpose tablets; and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and other Apple-branded and third-party accessories. Read More 

Current Price: $108.22
Consensus Rating: Buy
Ratings Breakdown: 27 Buy Ratings, 15 Hold Ratings, 4 Sell Ratings.
Consensus Price Target: $105.32 (-2.7% Upside)

 

Whether you believe the bull has room to run or the bear is beating at the door, it’s always a good idea to include a mix of “slow and steady” stocks in your portfolio. These are the stocks that will generate a consistent return for you as well as provide some added equity through dividends. However, the idea that the only way to get slow, steady growth is through a utility stock or a tried-and-true blue chip company is no longer the case. With companies like Microsoft, Apple, and Starbucks moving into this space, there’s room for investors to look at a variety of sectors. All of the companies on this list have a documented history of paying out increasingly high dividends year over year. Many of the companies have achieved the status of dividend aristocrat, meaning they have increased their dividend for over 25 years. Slow and steady stocks should make up only a portion of an investor’s portfolio.

12 Cheap Dividend Stocks to Buy Today

While COVID-19 was a suckerpunch to the stock market earlier in the year, the stock market is roaring back.  The Dow is hovering around 27,000 and the S&P 500 is trading near 3,200. S&P 500 stocks are trading at nearly 23 times their annual earnings, still well above historical norms.

At the same time, interest rates are near all-time lows (and probably dipping even lower). 10-year Treasuries are yielding just 0.9% and collectively S&P 500 stocks are yielding under 2%. Some investors think that it's too challenging to find safe and affordable securities that pay 4%, 5%, and even 6% yields.

Searching for yield isn't easy in an environment where historically high asset prices and stimulus from the Fed have driven down yields. This doesn't leave many options for investors looking for retirement income or a decent dividend yield on their stocks, but there are a handful of cheap dividend stocks to buy that are still yielding 3-6%. 

Let's review some of the best cheap dividend stocks in the market today in this slideshow.

View the "12 Cheap Dividend Stocks to Buy Today" Here.






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