Global lockdowns are bringing carnage to the economy and the stock market. Extreme selling over the past few weeks has resulted in plenty of losses for individual investors. Some are looking for stocks to buy, but many more are acting out of fear.
Now we’re starting to get massive monetary assistance from the Federal Reserve and fiscal assistance from President Donald Trump’s administration. Both should begin to provide some relief to companies, the markets and the broader economy.
But status is critical right now. What is each company doing right now to survive? How do they stand with creditors and their debt?
In my Profitable Investing, I continue to do what I did before the current mess. I evaluate a company’s credit before making a recommendation. This includes looking at cash and cash coverage of current liabilities going out up to one year. And it also includes looking at bank loans, credit lines, bonds and preferreds outstanding.
What I’m presenting to you today is that there are many companies with stocks in my model portfolios that retain positive trailing 12-month returns. These companies are performing well despite the unprecedented fall in the stock market.
They are from differing industries and market sectors, but all have common attributes of focusing on delivering in-demand goods and services to eager customers and working well with their suppliers and employees to get their jobs done. And, they are all successfully managing their credit.
These stocks to buy have all delivered positive returns over the last year, and as we move past this current mess, they are all poised to do better in 2020. They also pay you to own them with attractive dividends.
Positive Stocks to Buy: Technology
Digital Realty Trust (NYSE:DLR) is a great real estate investment trust (REIT) focused on data centers returning 5.3%. Cloud computing is mission critical for companies and individuals — made even more crucial during the current mess as more workers are off-site or at home. And DLR is keeping the data and communications flowing. It yields a tax-advantaged 3.6%.
Microsoft (NASDAQ:MSFT) is my favorite recurring-revenue technology company returning 25.5%. While other big tech companies have faltered in getting past relying on unit sales, Microsoft succeeded in moving toward a subscription model. And the Azure cloud business is now mission critical with more folks working remotely. It yields 1.4%.
Zoetis (NYSE:ZTS) is a technology company focused on animal health, including critical vaccines addressing past, present and future epidemics. ZTS stock returns 8.4%. The coronavirus from China likely originated from animals at markets. Zoetis continues to identify risks to both livestock and our pets at home, and develops the vaccines and medications needed to keep animals healthier. It yields 0.8%.
Samsung Electronics (OTCMKTS:SSNLF) is the globe’s leader in developing and making electronic components. It returns 10.1% in its local market and 1.4% in U.S. dollar terms. Point a finger at nearly any electronic item — including every modern vehicle — and you will find Samsung components inside. It yields 2.8%.
Utilities
NextEra Energy (NYSE:NEE) is one of many utility and essential services companies that I recommend, and it has returned 5.3%. NEE has a dependable base of regulated power for cash flows that can get it through thick and thin. And the company also has one of the world’s largest wind and solar power operations. It yields 2.7%.
Xcel Energy (NASDAQ:XEL) is another impressive essential services company returning 3.8%. The company provides power and natural gas to both regulated local markets and wholesale markets throughout the U.S. And like NextEra, it is ramping up wind power facilities. Its dividend yields 3.2%.
Consumer Goods Stocks to Buy
Nestle (OTCMKTS:NSRGY) is a prime example of a consumer products companies that fixed costs and has a great focus on the right products, returning 4.6%. Nestle is one of my few global stocks to buy that even now is working through the challenges. And it pays a dividend yielding 2.8%.
Procter & Gamble (NYSE:PG) is another of my consumer goods companies. It finally revamped its product lines and has a 12-month return of 2.6%. Consumer tastes and needs changed, and many consumer goods companies missed this shift. But Procter & Gamble is working to ramp up its performance — and it’s only aided by the rising needs of households during the lockdowns. And yes, the Charmin Bears and their toilet paper aren’t hurting the bottom line. It is paying a yield of 3%.
Specialty Companies
Franco-Nevada (NYSE:FNV) is my gold and mineral royalty stock to buy, returning 49.3%. Way back last year I made my call for gold to fare better. And even with the recent pullback, gold is up. This means that revenues for FNV should remain positive. And unlike traditional gold, FNV pays a dividend yielding 0.9%.
Easterly Government Properties (NYSE:DEA) is another REIT with a perfect tenant — the U.S. government. Over the trailing 12 months DEA has returned 31.4%. While many companies are curtailing their on-site operations and may jeopardize their lease payments, the U.S. government will continue to pay their leases now and for years to come. It yields 4.6%.
B. Riley Financial (NASDAQ:RILY) is a specialized collection of business units, and those units have some unique focuses, like shutting down distressed retailers. RILY stock has returned 4.9%. This company also has brokerage, business lending and asset management units. But it is really cashing in on closing stores. It yields 10.7% on an annual basis through its regular and ongoing special dividend distributions.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is a company that I have followed for years — like nearly everyone else — and it has returned 7.4%. But it has always been a company focused on growth at nearly any cost, prioritizing growth over profitability and shareholder dividend distributions.
However, like for Microsoft with its Azure cloud services and Digital Realty with its data centers for cloud services, Amazon has its mission critical Web Services that are empowering remote work. And its sales and product platform as well as its delivery services should only become more ubiquitous.
Neil George was once an all-star bond trader, but now he works morning and night to steer readers away from traps — and into safe, top-performing income investments. Neil’s new income program is a cash-generating machine … one that can help you collect $208 every day the market’s open. Neil does not have any holdings in the securities mentioned above.