The future has never been more uncertain. We are amid a once-in-a-century pandemic. Add in the fact that President Trump is contesting the election results, and there is even more potential for things to go awry.

This is a time to give serious consideration to shifting money out of tech stocks and growth stocks in favor of comparably conservative dividend stocks.

Let’s take a look at five of the top dividend stocks every investor should consider holding through the second wave of the coronavirus: Johnson & Johnson (JNJ), Verizon Communications (VZ), NextEra Energy (NEE), Target (TGT), and Atlantica Yield (AY).

Johnson & Johnson (JNJ)

JNJ is as reliable as it gets. The company’s diversified approach to business ensures no single economic setback or other occurrences will significantly diminish revenue. JNJ provides a dividend of 2.77%. All in all, JNJ has 250 subsidiaries, many of which will fare well even if a second wave of the virus spreads across the land.

Add in the fact that JNJ has one of the largest budgets of all the pharmaceutical companies, and there is even more reason to own the stock during the pandemic. JNJ has an “A” Peer Grade and “B” grades in the Buy & Hold and Industry Rank POWR Rating components. JNJ is ranked sixth of 240 stocks in the Medical – Pharmaceuticals space.

The average analyst price target is $169, meaning it has a potential upside of 15%. JNJ’s forward P/E ratio is fairly low at 18.33. Furthermore, JNJ has a comparably low beta of 0.68, meaning the stock could hold steady even if the market significantly falls.

Verizon Communications (VZ)

VZ has a dividend of 4.19%. The company’s phone, data, and wireless services will be in demand through the second wave of the virus and long beyond that point in time. In short, you should feel good investing in the largest wireless service provider on the continent.

The POWR Ratings show VZ has “A” grades in the Peer Grade and Buy & Hold Grade components. The stock is ranked second of 25 in the Telecom – Domestic industry.

The average analyst price target is $62.89, meaning there could be a potential upside of over 3% upside. VZ might be undervalued at its current trading price of $60, as its forward P/E ratio is a relatively low 12.3.

NextEra Energy (NEE)

Though a dividend of 1.85% might not seem like much, it sure beats the return on a savings account at the local bank. NEE operates a stable business. This public utility holding company generates, distributes, and sells electricity. The company has been in existence for 95 years. 

In short, NEE is likely to follow through on its 1.85% dividend, and its stock could continue to ascend. Even if the economy nosedives due to a second wave of the virus, NEE will likely hold firm, serving its 10 million customers who will continue to need electricity while indoors during the pandemic.

The NEE POWR Ratings are fantastic: “A” grades in the Buy & Hold, Peer, and Trade Grade components, along with a “B” Industry Rank. NEE is the top-ranked stock out of more than 60 in the Utilities – Domestic industry. Analysts are bullish on NEE, setting an average price target of $75.79, with nine recommending the stock as a “Buy,” three view it as a “Hold,” and none recommending selling.

Target Corporation (TGT)

TGT’s 1.76% dividend might not be that attractive, yet it is the icing on the cake of a great stock. TGT’s business model is a proven success. TGT provides products people need to live and be entertained during the pandemic. Furthermore, TGT offers same-day delivery, making it easier for customers to avoid brick-and-mortar retail stores.

The POWR Ratings show TGT has “A” grades in the Industry Rank and Trade Grade components, along with a rank of #4 out of 18 publicly traded companies in the Grocery/Big Box Retailers industry. 

Atlantica Yield (AY)

It is not often you find a stock with a 5.08% dividend. AY provides this dividend and is likely to follow through on the payout simply because it operates in a stable industry. AY assets are in the economy’s power and environment segments spread across North America, Europe, and South America.

AY has an “A” grade in the Peer Grade, Trade Grade, and Buy & Hold Grade components. The stock is ranked in the top 20 out of more than 60 publicly traded companies in the Utilities – Domestic industry. AY’s sustainable assets have helped the company boost its cash available for distribution by nearly 14%. In short, you should anticipate the 5% dividend being paid this year and, in the years, ahead.

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JNJ shares rose $0.40 (+0.27%) in premarket trading Thursday. Year-to-date, JNJ has gained 3.63%, versus a 12.00% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...

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