With each passing week, the U.S. stock market is demonstrating that 2022 may not be like the rip-roaring years of 2019 through 2021. According to the Bureau of Labor Statistics, inflation is 8.5%, the highest reading in 40 years. U.S. 30-year mortgage interest rates just hit 5%, a 10-year high. New and existing home prices are at all-time highs. And everything from food costs to prices at the pump are on the rise as well.
In this kind of climate, fundamentals become more important than ever. Companies that have either been through past downturns or have the pricing power to offset the costs of inflation provide a crucial element of safety that unprofitable growth stocks do not have. In addition, dividend stocks can provide a steady passive income stream so that investors don’t have to worry as much about short-term gyrations in the stock market.
Investing in equal parts of United Parcel Service ( UPS -0.46% ), NextEra Energy ( NEE -1.33% ), and Atlantica Sustainable Infrastructure ( AY -0.64% )gives an investor an average dividend yield of 3.43% and exposure to the industrials sector, the regulated electric utility industry, and the renewable utility industry. After a period of six years, an investor could expect a $15,000 investment to earn over $3,000 in passive dividend income. Here’s what makes each dividend stock a great buy now.
The transportation stock remains a good value option for dividend investors
Lee Samaha (UPS): The war in Ukraine isn’t good for anybody, and it isn’t good for international trade. The same can be said about outbreaks of COVID-19 in China. Unfortunately, both events are likely to have an impact on transportation stock UPS in 2022.
That said, long-term investors shouldn’t be buying stocks based on temporary trading patterns. History suggests the global economy will work to fill in the gaps created by the lack of trade from Ukraine and Russia. Also, the supply chain bottlenecks created by the lockdowns in…
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