As the stock market enters the final stretch of the year, it’s worth looking back on your portfolio to consider what’s still working and which strategies are at risk of falling behind.
Nothing is constant on Wall Street, after all. Just as some early investment ideas back in January fell apart amid the pandemic-related volatility in the spring, there are now a host of stocks that seem to be struggling as the popular ” stay-at-home trade” from earlier in the year seems to be fading on hopes of a vaccine rollout.
If you’re looking to reposition your portfolio in December, here are five top dividend stocks to consider that all have yields of 3% or higher:
— AbbVie (ticker: ABBV)
— Baker Hughes (BKR)
— CF Industries Holdings (CF)
— Columbia Banking System (COLB)
— Kimco Realty Corporation (KIM)
Current yield: 5.1%
AbbVie is a pharmaceutical stock that was spun off from Abbott Laboratories ( ABT) in 2013, leaving behind the less dynamic generic drugs, nutrition products and medical device sales of Abbott to instead focus on research and sales of branded pharmaceuticals with higher margins.
ABBV’s dominant product at present is the immunosuppressant drug Humira, used to treat conditions from arthritis to psoriasis to Crohn’s disease. While there has been a lot of attention on potential vaccines in 2020, ABBV and its blockbuster Humira continue to crank out killer results with revenue growth plotting more than 30% this year and another 17% in fiscal 2021.
That’s helping to power a very generous dividend, too.
Baker Hughes (BKR)
Current yield: 4%
Oil services stock Baker Hughes hasn’t exactly given investors much cause to celebrate in recent years.
Rolled into General Electric ( GE) in 2017 then spun back out with GE’s similar energy assets in 2019, the stock has mostly relied on financial engineering rather than operational success lately. GE also plans to completely divest from the oil services giant by selling its stake over the next three years.
That said, Baker Hughes has finally started getting its act together. Despite obvious short-term headwinds from the pandemic and long-term disruptions from a global shift away from fossil fuels, Baker Hughes is still on track for a profitable year. And what’s more, forecasts are for earnings to double in fiscal 2021.
There’s risk here, but there’s also big yield and a nice turnaround story for investors looking to ride recent momentum.
CF Industries Holdings (CF)
Current yield: 3.3%
Agricultural chemicals firm CF offers fertilizers as well as nitrogen-based and potassium-based chemicals for industrial use.
Founded in 1946 and headquartered in Illinois, the firm has deep roots with Midwestern farms and knows this market better than anyone else. It also helps that as an $8.2 billion company in a pretty narrow niche, CF doesn’t have much in the way of competition, either.
The company admittedly may never set the world on fire with breakneck growth, but its comfortable margins and reliable business make it a great dividend stock for any portfolio.
Columbia Banking System (COLB)
Current yield: 3.4%
Based in Washington state, regional bank Columbia is one of the local financial firms that Wall Street often overlooks because it simply offers personal banking services, small business loans and other relatively small-time products that don’t deliver the quick and significant profits you’ll see from investment banking operations at firms like Goldman Sachs ( GS).
To make matters worse, COLB was acutely sensitive to local economic trends and got hit hard by the initial wave of pandemic shutdowns as Washington was at the epicenter of the U.S. outbreak. Since then, things have stabilized, and more importantly, earnings have come in better than expected.
As COLB is only paying out a little more than half its profits in dividends, this bank stock’s generous payouts could move even higher in 2021 now that some of the worst of the pandemic disruptions might be behind it.
Kimco Realty Corporation (KIM)
Current yield: 4.1%
One of the largest commercial real estate operators in the U.S., Kimco was hit hard by the economic downturn at a time when e-commerce was already putting pressure on the brick-and-mortar game.
The real estate investment trust, or REIT, has managed to remain profitable in 2020 despite the obvious challenges to operations. And with around 400 U.S.-based locations comprising 70 million square feet of gross leasable space primarily in dense metropolitan markets, and with more than 60 years of management and acquisition experience to drive shareholder value, it’d be a mistake to ever count KIM out.
Shares have now doubled from their 2020 lows after a big surge in the wake of November earnings, and this stock has not just stabilized but seems to be moving steadily higher.
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Update 10/29/20: This story was published at an earlier date and has been updated with new information.