Even the most staunch bull is a bit nervous about the Coronavirus and what it means for the stock market. With no clear end in sight, investors are in serious “Risk Off” mode driving them to safer options. That is exactly what you will find in this article today.

However, safe dividend stocks are too often a way to lose “less money” while the market sinks. So my goal was to find stocks that actually had a chance to rise because they brought more to the party than just high dividend yield. On top of that I am also looking for solid growth and attractive value as part of the selection criteria that gives these stocks a decided edge.

In total you will find 7 safe, yet very attractive dividend stocks that should give you a smoother ride to outperformance this year. They should also help you sleep at night when the next wave of Coronavirus fear has stocks tumbling lower once again.

I want to highlight some of these 7 safe stocks below to provide more insight to their attractive qualities. Then further below I will share the full list of stocks along with details on the research study I ran to narrow down to these selections.

Verizon (VZ)

Certainly you get the appeal of Verizon as a leading mobile telecom company. Even during rough times, people are not going to give up their phones. In fact, most of the time their phone is glued to their face checking every like and comment on social media.

This societal trend explains why VZ has been on a tear the last few years with impressive earnings growth and share price gains. The trend looks to continue as analysts are quite positive on VZ shares. As an added bonus you also get a very appealing 4.2% dividend yield (about 4 times the safe return of government bonds). It’s easy to see how VZ will allow you to dial up attractive returns even when the overall market is rocky.

(VZ is the newest stock added to the Reitmeister Total Return portfolio).

Astrazeneca (AZN)

Pharmaceutical stocks have long been a safe haven for investors when things get rough. But in particular this time around, with a health crisis as the main cause of market concern, then drug companies have an extra appeal.

What stands out the most with AZN is that they have the most impressive track record of earnings beats on the list. In fact, the last 4 quarters AZN has served up an average 36% earnings surprise. No doubt this explains the nearly 100% gain for AZN shares the past few years.

Looking ahead AZN provides a healthy 3.8% dividend to go along with nearly 10% upside in shares to the average Wall Street target price. However, some top rated analysts, like Andrew Berens of Leerink Partners, sees $58 as a more realistic price for AZN. If that comes true, then investors will be quite happy with their overall return this year.

Philip Morris (PM)

This is the only consumer staples featured today. Yet we all understand why a tobacco centric company like PM is considered a stable choice in risky times. And for all those who are unsure about the future outlook of the industry with the rise of vaping, then let PM’s 8 straight earnings beats and 3X normal dividend yield of 5.27% make you feel at ease. Add that to 11% upside to fair value and PM should is a prime safe haven pick with upside potential.

Enbridge (ENB)

ENB is a leading energy pipeline company at nearly $85 billion market cap. ENB also sports the highest dividend yield on the list at 6.29%. But what impresses me the most about this “King of the Hill” energy pipeline company is Enbridge’s healthy 12.4% annual increase in dividend payments. Allowing them to increase their dividends is the strong quarterly earnings results as can be appreciated by the average 7.09% positive earnings surprise.

The point is, don’t let the high dividend yield of ENB blind you from the other positives taking place. They are seeing attractive growth in earnings that allows them to increase dividend payments over time. This should help propel shares nicely higher.

And here is the full list of 7 safe dividend stocks to weather the storm:

Want more great stock picks? Then check out these additional resources:

List of Best High Yield Dividend Stocks

About POWR Ratings

Reitmeister Total Return portfolio

About the Research Study to Find the Safest Stocks

Here are the steps I took to narrow down to the 7 safest stocks likely to outperform in this newly volatile market environment:

• POWR Rating of A or B = Best proof of a stocks timeliness & momentum
• Large caps only ($10 billion market cap or higher). Larger = safer in this environment.
• 3%+ dividend yield. We want it well above the S&P average dividend yield and 10 year Treasury yield. And thus a beacon for conservative investors seeking income. Note that we have 3 clocking in at over 5% dividend yield with ENB leading the list at 6.29%.
• Defensive industries only: Consumer Staples, Pharmaceuticals, and Utilities (includes telecom and pipelines). These are the ones that investors cling to when the “stuff hits the fan”.
• Average earnings beat greater than 0% the past 4 quarters. This is meant to show a consistency of earnings quality with little risk of faltering in the future.
• Minimum 7% upside from current price to average target price. You’d be surprised how much this criteria narrowed up the list because the low interest rate environment has led to many of these stocks being bid up beyond fair value. Sitting atop the list in the value category is PBA with 21% upside to fair value. You blend that with their attractive 5.25% yield and you can appreciate how this combines to an attractive rate of return.

VZ shares fell $0.87 (-1.50%) in premarket trading Thursday. Year-to-date, VZ has declined -6.07%, versus a -5.39% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...

More Resources for the Stocks in this Article