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Live Off Dividends

Stock is the best option to give as a present! 🎄

Updated: Jan 26, 2023

Although we are already after Christmas I have for you a New year’s eve present. I have collected 3 dividend stocks which are as I call them „No brainer buy”.3 stocks, in different sectors for good diversification.🎅

I won’t use the word „best” because this list is only my opinion. For you, it can be something else the best, but I consider to invest in those dividend paying companies and I am happy to share it with you.

You can ask why only just 3 stocks?

Because you can begin with a small amount of money, get a good diversification or it can be also a part of a bigger portfolio. It’s up to you.

I won’t be that long on those stocks and won’t explain every detail about them but it will be good enough to see those are really good investments.

Let’s get started…🎬

If you don’t want to read the whole Article then only for your pleasure here are the three stocks I will share details about: EPD, MMM, WBA

EPD - Enterprise Products Partners

Enterprise Products Partners

This master limited partnership (MLP) has increased its distributions(dividends) for 22 consecutive years.

It is extremely undervalued and offers a current yield of 8.34%. The company’s long-term prospects are extremely well defined offering the unique potential for extremely high current income coupled with significant capital appreciation potential.

The payout ratio is unfortunately always around 80-90% but they are doing like this since 2001 so it isn’t a concern at all. In the last 20 years, it outperformed the S&P 500 on the dividend and the capital appreciation side also.

The P/E ratio is almost 10(very nice). They are issuing shares every year which is a bad sign but not in this particular case.

I would buy Enterprise because of income. The stock's price right now is very low, you can buy it with a good margin of safety. The price is decreasing since 2014 but earnings are growing, the dividend is increasing, that’s why it is considered a very undervalued company.

I’m not expecting any major annual return on the stock price but it is a very good income-generating vehicle.

MMM – 3M 🏭

MMM – 3M

Everyone knows 3M (I hope). You can find their products everywhere in the world. Their sector is the industrial sector.

They have a dividend record for 63 consecutive years. The current dividend yield is 3.35%; the payout ratio is only 65% but mostly it was always under 50%.

The total annual return on one's money might have been the same as the S&P500, but one could have received double the amount of dividends.

They are buying back shares which is very good for future growth, not much debt, low P/E ratio, and the current price has a little margin of safety compared with the operating earnings.

I know it does not have a very big dividend yield but 3M is a growth and dividend stock.

Although EPD has an almost 8.5% dividend, EPD won’t grow that much yearly but on MMM analysts expected an 8% growth plus the dividend yield. Their dividends survived a lot of stock market crashes. I consider 3M as a SWAN stock (Sleep Well At Night :))

WBA - Walgreens Boots Alliance 💉

WBA - Walgreens Boots Alliance

Isn’t a well-known company such as EPD but…

The catch about the company is that they run around 13.000 stores across the United States. This is a big unbeatable standpoint. The United States segment sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores. WBA is in the news everywhere in the last couple of months when it comes to value investing. The price is so undervalued that is unbelievable.

Walgreens is a dividend champion, which means that the company is paying and raising dividends for 46 years. The payout ratio is right now 28% but they were always under 30% which is very very low. From this ratio you can tell also they have always a large amount of free cash flow.

Right now they offering a 3.77% dividend yield. The stock price chart can fool you that’s why it’s worth taking a deeper look into.

It is declining because of Amazon's fear but WBA has 13.000 stores and a developing company in artificial intelligence with the new CEO from Starbucks. I see no point to worry about it.

WBA is fresh on my watchlist but I love the concept and the new things around the company. As I wrote above, I’m not concerned about Amazon and the 46years of dividend-paying capability calms me down. This is an over 100 years old company with, new CEO, they are planning into AI.

Overall takeaway 📈

Like I wrote above, I consider to invest in all three stocks. Each one of them is good at something. Different sectors for the good diversification, high yield but not a big growth potential, middle yield middle growth potential and last but not least the 3M where the yield is the smallest in this shortlist but the growth potential is very big.

All three companies are safe and they will be around in the next 10-20 years.

I hope you enjoyed my „present”. Have a much better year than the last one. 🍾

Hope this was useful for you! Please note that the above content is not an investment advise and shall be considered only for informative purpose.

Feel free to share you comments below.



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