February belongs to two mythical creatures of capricious fancy: one a blind winged marksman who inspires love, the other a subterranean rodent who inspires hate when he sends us six more weeks of winter. Somewhere between Cupid’s air and the groundhog’s lair, is Wall Street, where investors spend February honing in on what the year holds.
For dividend investors, the year’s second month offers some promising companies, ranging from a Canadian energy company to a well-known U.S. cereal concern and even an exchange-traded fund focused on gold mining.
[See: 10 of the Best Stocks to Buy for 2019.]
Here are five dividend stocks to buy in February:
— Suncor Energy (ticker: SU)
— General Mills (GIS)
— VanEck Vectors Gold Miners ETF (GDX)
— Abbott Laboratories (ABT)
— Citigroup (C)
Suncor Energy (SU)
The last two years battered energy stocks and Suncor was not exempt from the bruising. The Canadian company, which specializes in synthetic crude production from oil sands, rode out 2017 and 2018 like a roller coaster, ending pretty much where it started at about $32 per share.
Likewise, its quarterly dividend has bounced around but stayed roughly the same since the latter half of 2014. It ended 2018 at 27.1 cents per share, compared to 29 cents in the third quarter of 2015 and 28 cents in September of the previous year.
Yet Suncor’s future looks promising, says Benjamin C. Halliburton, chief investment officer at Tradition Capital Management in Summit, New Jersey.
“Suncor is a huge free cash generator with a low-cost oil sands operation,” Halliburton says. “We believe SU can grow 7 to 9 percent compound annual growth rate indefinitely given its resource base.”
General Mills (GIS)
In December 2018, General Mills began a rally that has seen the stock rise 18 percent. It may be time for investors to put their money where their mouth is — fitting enough for the home of Betty Crocker, Yoplait, Pillsbury and of course, Cocoa Puffs.
“GIS has a strong forward dividend yield of 4.26 percent and sells at a below market price to earnings ratio of 12.7,” says Bob Johnson, professor of finance at Creighton University. In terms of that dividend, it’s been uninterrupted now for more than 117 years.
But another streak was broken in 2018 when GIS — which had increased its dividend annually since 2004 — froze it at 49 cents per share. Part of the reason was the steep price tag to acquire natural pet food company Blue Buffalo.
But with the pet food market expected to soar, GIS is betting on a company that’s already proven profitable in a high-growth sector.
VanEck Vectors Gold Miners ETF (GDX)
For all the cheesy cable TV ads that sing the praises of gold as an investment, gold mining investment through this ETF is another matter.
“GDX is an unusual choice to be sure,” says Anne-Marie Baiynd, CEO and chief market analyst at TheTradingBook.com, and a member of the StockTwits community. “But markets are likely in an intermediate bearish formation — and the GDX is lifting showing that.”
[See: 9 of the Best Gold ETFs to Hedge Volatility.]
In fact, December proved one of those months of interesting inverses, as GDX rallied 10 percent while the S&P 500 lost 9 percent.
And if you got in just before that, as in the fourth quarter of 2018, you’re already happy, as GDX’s share price has since risen 14 percent to just above $21.
GDX looks poised for a continued good run, especially when compared to a broader market still trying to shake the jitters.
“My general mindset is that we have ourselves a bit of a messy formation across stocks and markets in general,” Baiynd says. “And if the markets hold a bit weaker, we’ll see the yield present and our overall holding increase as well.”
Abbott Laboratories (ABT)
This health care technology and products company recently announced a 14 percent increase in its dividend — meaning that its winning streak stands at 47 years. To put that in perspective, Abbott has been spiking up its dividends since the year microprocessors were invented.
And, this will be the company’s 380th consecutive quarterly payout dividend. That, dividend fans, predates the Wall Street crash that birthed the Great Depression by a good five years.
To match the strong dividends, Abbott has an equally robust future. A stunning 14 of 17 analyst firms rate Abbott a “strong buy,” and another one a “buy.” Rounding out the ratings, two call it a “hold,” but that hardly waters down an analyst consensus that couldn’t be rosier.
As for the stock, ABT is up a healthy 12 percent year over year — and 90 percent since this time in 2016. With yet more room to grow, who knows how much the good news will multiply in 2019?
Citigroup (C)
If you managed to get in on Citigroup stock on Christmas Eve — when it was “crazy cheap,” as Halliburton puts it — then Santa left a nice little present under your tree. Citigroup is up 28 percent since then, trading at just above $63 per share.
With an annual dividend of $1.80, C stock has earned an “A” among shareholders, as that represents nine times the offering of 2016’s 20 cents per share. That translates to a yield of roughly 2.9 percent, and the bank’s capital redeployment relief “should allow for dividend growth and share repurchase,” Halliburton says. He sees Citigroup’s fair value as “close to $80.”
[See: 10 Long-Term Investing Strategies That Work.]
Citigroup also beat the Street on Jan. 14 with quarterly earnings results at $1.61, beating consensus estimates of $1.55. That’s a financial company performance to spark interest.
More from U.S. News
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5 of the Best Dividend Stocks to Buy in February originally appeared on usnews.com
