5 Best Dividend Stocks

10/20/08 Categories: Stock Investing and Investments

In times of uncertain earnings for major companies and a stock market that has seen almost a 40% decline in the past year, there has to be another way to make money in the stock market.

Even some of the best investors in the world are getting crushed over and over on their investments in this cruel, erratic stock market. Stock Investing can be very confusing, and it seems someone is suggesting one stock pick when the other says to sell that stock.

One way to ensure a return on your investment is investing in stocks that have a dividend. Some companies pay dividends that overshadow our recessionary market. My mission was to find high-yielding dividends from good companies for independent investors like you. If you want returns in this market, my stock investing advice to you is to consider dividend stocks.

After scouring the stock market for the best dividend stocks, I found:

5 Best Stocks for Dividends:

1. Frontline Ltd. (FRO)- this shipping company moves oil, bulk, and metal ores and continues its earnings growth and dividend growth year after year. This stock currently yields a 39% yearly dividend (or $3.00/share quarterly) at a price of nearly $30. Standard and Poor's estimates the 12-month target of FRO stock to be $59. Even though the yield in a year may be closer to 15-20%, that is a huge dividend! Also, if you buy stock of FRO now, then you can enjoy the gain from $30 to almost $60 and have the 15-20% dividend. With a P/E of 3x (average stock P/E is 10-14x) this stock is a money making machine.

2. SunTrust Banks Inc. (STI)- Suntrust's stock dividend yields 7.5%. This large regional bank has held up well compared to other banks during this stock market crisis. This stock is well off of its 52-week high of $73.80, so it has a lot of potential upside gains in the future. This is a solid company with strong growth prospects in the future.

3. Pfizer Inc. (PFE)- This drug company has a household name and 7.5% dividend yield at its current price of $17.10. With revenues of nearly $50 billion a year, you know this company is going to be standing strong for a very, very long time. Buy stock in Pfizer if you think a 7.5% dividend and a discounted stock price looks like a great investment.

4. AT&T Inc. (T)- Another stock with a household name, At&t, has a dividend yield of 6.33%. Standard and Poor's gave At&t stock the highest rating, 5 stars. This company enjoys the exclusive right to sell the iPhone, which has boosted its revenues. Realize that this stock is also priced low compared to it's historical highs.

5. Duke Energy Corp (DUK)- What would a dividend stock list be without a utilities company? This stock yields a 5.9% yearly dividend based on the Oct. 24, 2008 price. This large utility company has a market value of $20 billion. Duke Energy has been paying dividends on their stock since 1926. That should tell you how reliable this company really is.

There are still ways to make money during this gruesome bear market. Stock dividends can be a addition to your portfolio strategy for stock investing. Realize that the dividend yields are calculated as a percent of current stock market price and may fluctuate. In rough times, buy stocks with higher constant dividend payments for a stream of income or reasonable gains.