Blue-chip dividend stocks offer cash flow and low volatility. These investments make more sense as you get closer to retirement and want an extra income source. However, even the most secure stocks enter corrections and become more desirable for patient investors.
These three dividend stocks have been receiving more attention due to their high yields and recent price action. Retirees have been snapping up shares in these discounted dividend stocks.
Key Points
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Retirees have been grabbing shares of dividend stocks that have recently endured corrections.
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These three stocks present plenty of promise despite short-term price movements.
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Verizon (VZ)
Verizon (
Investors shouldn’t expect substantial growth from Verizon, but its low volatility and recent financial results present an attractive opportunity for retirees. The telecom giant reported 5.2% year-over-year revenue growth in the second quarter. That also came with an 8.9% year-over-year net income boost, indicating higher profit margins.Â
Both of those growth rates are significant improvements from previous quarters that can fuel more upside. Verizon has always been a popular pick for retirees, and recent developments make it even more attractive.
Home Depot (HD)
Home Depot (NYSE:HD) is the go-to retailer for people who want to improve their homes. The company has endured a rough stretch due to high interest rates, but the stock may rally when the Federal Reserve cuts interest rates in the back half of the year.
Lower interest rates reduce the cost of borrowing money, and that makes it easier for people to buy homes and take out home loans to enhance their properties. You’ll get to enjoy a 2.47% yield as you wait, and the stock has delivered some solid long-term returns. Shares are up by roughly 40% over the past five years.
The stock also has a reasonable 25 P/E ratio and delivered 9.4% year-over-year revenue growth in the first quarter. Comparable sales in the U.S. increased by 0.2% year-over-year, demonstrating some momentum. Investors have to wait for rates to go down to generate meaningful returns from their shares.
IBM (IBM)
IBM (NYSE:IBM) has completed its renaissance and is now a key player in artificial intelligence and cloud computing. The tech giant delivered impressive financial results that beat expectations, but the stock is still down a bit since the company reported its results. Revenue increased by 7.7% year-over-year, while net income jumped by 20% year-over-year.
The dip presents a long-term buying opportunity for a company that is still capitalizing on a compelling opportunity. The stock is in the middle of a correction, but it is up by 18% year-to-date and has rallied by 121% over the past five years.
Few stocks offer those types of returns along with a dividend yield above 2%. The dividend growth rate isn’t that inspiring — IBM only raised its quarterly dividend from $1.67 per share to $1.68 per share this year — but a high yield and discounted shares make up for it.
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