In late July, the Dow Jones Industrial Average plunged more than 700 points in a single session to record its worst one-day decline since October. Shares have since recovered and the main stock indices they all continue to flirt with new all-time highs, but it’s worth noting that the big gains of the past two years seem much harder to achieve. Specifically, the Dow Jones has been more or less flat since the beginning of May.
That points to gains being harder to score in the coming months — and could be a sign that income-oriented dividend stocks can provide not only stability, but a nice cash flow to keep your nest egg growing.
If you are interested in dividend shares right now, here are five that look particularly strong in early August:
— EPR properties (ticker: EPR)
– Navient Corp. (NAVIA)
— Pfizer Inc. (PFE)
— Vedanta Ltd. (LED)
— Vistra Corp. (VST)
EPR properties (EPR)
Dividend Yield: 5.7%
EPR is a leading “net lease” real estate investment trust, meaning it requires clients to pay for ancillary costs such as maintenance or insurance of the properties, while cashing only the rent check. However, it is not a shopping center or residential real estate company and focuses on “out-of-home leisure and recreation experiences,” including movie theaters, beach resorts, and ski slopes in more than 40 states. Clearly, with the overall easing of coronavirus restrictions, EPR has seen a massive recovery in its business compared to its performance last summer in the throes of lockdowns. The stock is up about 60% so far and EPR just resumed a quarterly dividend of 25 cents in July. That bodes well for both future performance and future dividends.
Navient Corp. (NAVIA)
Dividend Yield: 3.2%
Student loan lender Navient wasn’t exactly a popular stock a year or two ago, amid political discussions about student debt forgiveness, which has been closely followed by fears of an economic downturn caused by coronavirus disruptions that would disrupt the payments of young graduates. However, the financial firm’s quarterly dividend of 16 cents remained uninterrupted throughout the upheaval, and now NAVI stock is facing an upward trend as both the economic and political outlook have improved. Shares are up about 150% in the past 12 months and it still offers a dividend that is more than twice the S&P 500 even after that run.
Pfizer Inc. (PFE)
Dividend Yield: 3.6%
Big Pharma pillar Pfizer slightly outperformed the broader stock market in 2021 and continued to ride high on its high-profile success developing an effective coronavirus vaccine. Given the risk of variants of the disease, along with continued pressure to vaccinate globally as many developed markets have had their chance, investors could continue to see significant tailwinds for PFE in the near term. In addition, don’t forget that this $240 billion drug maker remains one of the most dominant healthcare companies on the planet, and one of the most reliable dividend stocks out there with an astonishing run of 330 consecutive quarterly dividends paid to shareholders.
Vedanta Ltd. (LED)
Dividend Yield: 5.1%
Vedanta is an India-based industrial conglomerate that operates a diversified natural resource business that includes oil and gas production as well as coal, silver and copper mining. It also takes the energy resources it extracts and operates electricity generating facilities, serving an arm that is a major electric utility in the nation. Since this stock is in an emerging market and not as large as other material stocks at only about $14 billion, there is a little more risk here than with other comparable stocks. But with a generous dividend and earnings soaring thanks to the global economic recovery, this stock has been outperforming recently with a year-to-date return of over 60% in 2021.
Vistra Corp. (VST)
Dividend Yield: 3.1%
A Texas-based utility company, Vistra is an electricity supplier – one of the most stable companies on Wall Street. But VST also has modest growth potential, as it operates in six of the seven wholesale markets where utilities are competing for customers thanks to deregulation. At present, it has nearly 5 million residential, commercial, and industrial connections in approximately 20 states. In addition, it announced the construction of a 1600 megawatt-hour battery energy storage system in California, which has captivated investors. Stocks have underperformed so far in 2021, but are up about 30% from their spring low – and continue to offer a generous dividend on top of this short-term momentum.