Best Dividend Stocks June 2021

In my experience, great dividend stocks have a few characteristics: strong fundamentals, increasing dividend distributions over time, and bullish trading activity in the shares.

The hallmark way I go about finding the best dividend stocks…the outliers, is by looking for quiet Big Money trading activity. Oftentimes, that can be institutional activity. I’ll go over why following the Big Money is so important in a bit. But, the 5 stocks I see as long-term dividend growth candidates are ABT, COST, ADI, MCD, & NKE.

Over decades, I’ve learned that the true tell on great stocks is that big money consistently finds its way into the best companies out there… especially dividend paying stocks. Some of the biggest returns ever have come from holding stocks for many years and reinvesting dividends.

I want the odds on my side when looking for the highest quality dividend stocks…and I own many of them.

So, let’s get into it.

Up first is Abbott Laboratories, Inc. (ABT), which is a seller of health care products globally. Their product lines include pharmaceuticals, nutrition, diagnostics, and medical devices.

Let’s first start with the technical picture.

When deciding on a strong candidate for long-term dividend growth, I look for stocks seeing a pullback:

  • 1 month performance (-3.41%)
  • Historical Big Money buy signals

Below are the Big Money signals Abbott Labs has made since 2015. Green bars are showing that ABT was seeing big buy activity according to MAPsignals. Typically, the more Big Money signals, the stronger the stock:

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, ABT has a strong dividend history:

  • 3-year dividend growth rate (+10.8%)
  • Current dividend per share = .45
  • Forward yield = 1.54%
  • 3-year earnings growth rate (+158.04%)

Next up is Costco Wholesale Corp. (COST), which operates membership warehouses in many countries. They offer branded and off-brand retail products.

When deciding on a strong candidate for long-term dividend growth, it’s a good idea to look for many years of dividend increases.

Now let’s look at recent performance:

  • 1 month performance (+4.80%)
  • Historical big money signals

Below are the big money signals that Costco has made since 2015. I expect more buy signals in the years to come.

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Costco has a nice dividend history. Their earnings growth has been stellar as well:

  • 3-year dividend growth rate (+12.4%)
  • Current dividend per share = .79
  • Forward yield = .82%
  • 3-year earnings growth rate (+14.04%)

Next, I’m looking at Analog Devices, Inc. (ADI), which is a leading semiconductor company. They have a solid dividend history.

When deciding on a strong candidate for long-term dividend growth, recent performance in the shares is important:

  • 1 month performance (+1.92%)
  • Recent Big Money signals

Below are the big money signals that Analog Devices has made since 2015. It’s clear the stock has been in a nice uptrend:

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, ADI has a strong dividend history:

  • 3-year dividend growth rate (+10.7%)
  • Current dividend per share = .69
  • Forward yield = 1.69%
  • 3-year earnings growth rate (+24.62%)

Next, I’m looking at McDonald’s Corp. (MCD), which is a global fast-food franchise company. They operate over 39,000 restaurants globally.

When deciding on a strong candidate for long-term dividend growth, recent muted performance is not a bad thing:

  • 1 month performance (-.07%)
  • Recent Big Money signals

Below are the Big Money signals that McDonald’s has made since 2015.

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of technicals, when deciding on the best dividend stock, let’s check up on the fundamentals. As you can see, McDonald’s has a strong dividend history.

  • 3-year dividend growth rate (+9.6%)
  • Current dividend per share = 1.29
  • Forward yield = 2.2%
  • 3-year earnings growth rate (+.9%)

Lastly, I’m looking at NIKE, Inc. (NKE), which is a leading athletic footwear and apparel company.

When deciding on a strong candidate for long-term dividend growth, I like to look for recent leaders:

  • 1 month performance (+2.07%)
  • Historical Big Money signals

Below are the Big Money signals that NIKE has made since 2015.

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of technicals, when deciding on the best dividend stock, you gotta see if the fundamental picture supports a long-term investment. NIKE has been a steady grower:

  • 3-year dividend growth rate (+10.9%)
  • Current dividend per share = .275
  • Forward yield = .81%
  • 3-year earnings growth rate (+8.22%)

The Bottom Line

ABT, COST, ADI, MCD, & NKE represent solid dividend choices. Given the strong historical dividend growth and Big Money signals, these stocks could be worth an extra look for a dividend investor.

Disclosure: the author holds long positions in personal and managed accounts in COST and long positions in managed accounts in ADI & NKE. He holds no positions in ABT & MCD at the time of publication.

To learn more about the MAPsignals process, click here: www.mapsignals.com

Disclaimer

https://mapsignals.com/contact/

For a look at all of today’s economic events, check out our economic calendar.

3 Semiconductor Stocks Testing Their All-Time High

Semiconductor stocks have outpaced the S&P 500 by around 25% so far this year as investors bet on insatiable demand, driven by 5G smartphones, artificial intelligence (AI) devices, and a rebound in auto and industrial end markets. Evercore ISI analyst C.J. Muse recently told clients he sees the group growing for the next six to eight quarters, with revenues jumping 14% in 2021 to $500 billion.

Below, we take a look at three leading chip stocks trading near their all-time high (ATH) and point out crucial technical levels worth watching.

Advanced Micro Devices, Inc.

Advanced Micro Devices, Inc. (AMD) designs and manufactures microprocessors for the computer and consumer electronics industries. The Santa Clara company entered its foray into supercomputing in May 2019, announcing that its chips would power Frontier – an exascale system designed to innovate in areas such as AI, machine learning, and data analytics. Analysts expect the chipmaker to post 40% sales growth for fiscal 2021, followed by another 26% in fiscal 2022.

Chart watchers should look for a breakout above a five-month trading range that has established clear resistance around the ATH at $96.37. Look for the bullish momentum to continue on a move through this level.

Analog Devices, Inc.

Massachusetts-based Analog Devices, Inc. (ADI) produces analog, mixed-signal, and digital signal processing chips. The company, which generates about 70% of sales from industrial and automotive end markets, forecasts first-quarter fiscal EPS to come in at $1.30 on revenues of $1.5 billion. This indicates respective top- and bottom-line line growth of 15% and 26% from a year earlier.

Chart wise, the shares broke out from an inverse head and shoulders pattern in early November, suggesting further upside. More recently, the price has remained above the 20-day SMA after reaching its ATH at $146.31 on Dec. 8.

Xilinx, Inc.

Xilinx, Inc. (XLNX) processes and designs integrated circuits for use in communications, data processing, industrial, consumer, and automotive industries. The computer chipmaker has made inroads into the data center market by designing programmable processors that speed up compressing videos and providing digital encryption. In October, Advanced Micro Devices announced that it has agreed to purchase Xilinx in a $35 billion all-stock deal.

After climbing to a new ATH at $151.54 earlier this month, the shares retraced to the April 2019 high, where previous resistance now acts as support. A push higher from this level in recent trading sessions indicates further momentum-based buying.

For a look at today’s earnings schedule, check out our earnings calendar.

Analog Devices in Advance Talks to Acquire Maxim Integrated; Analysts Optimistic on Outlook

Analog Devices Inc, an American multinational semiconductor company, said it is in advance talks to buy Maxim Integrated for over $17 billion, reported the Wall Street Journal, citing people familiar with the matter.

This deal is said to be the largest acquisition of Analog after it bought Linear Technology in a cash-and-stock deal valued at $14.8 billion four years ago. If this deal is finalized, Maxim shareholders will be paid in Analog Devices stock rather than in cash, allowing the company to enjoy the upside of the combined company’s shares.

Analog, founded in 1965 and headquartered in Massachusetts, counts Apple as one of its biggest customers. If the ongoing negotiations end successfully, a deal could be reached as early as this week.

Shares of both the companies rebounded over 50% since March trough amid the coronavirus-induced market rout. Analog closed 0.20% higher at $124.5 on Friday.

Analog Devices stock forecast

Seventeen analysts forecast the average price in 12 months at $127.00 with a high forecast of $145.00 and a low forecast of $100.00. The average price target represents a 2.01% increase from the last price of $124.50. From those 17, 12 analysts rated ‘Buy’, five rated ‘Hold’ and none rated ‘Sell’, according to Tipranks.

Morgan Stanley target price is $117 with a high of $143 under a bull scenario and $81 under the worst-case scenario. Analog Devices had its price target reduced by Robert W. Baird from $135.00 to $130.00. The firm currently has an “outperform” rating on the semiconductor company’s stock.

Evercore ISI raised the target price to $135 from $115 and Keybanc raised price target to $145 from $135. We expect it is good to buy as 50-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

Analyst view

“We are Equal-weight Analog Devices. We view Analog Devices as a core holding in the group long term, due to exposure to the right end markets and superior margins and FCF generation. However, the near term we see a number of headwinds to its business that keeps us equal weight,” Craig Hettenbach, equity analyst at Morgan Stanley noted.

“Notably, the company’s auto business was underperforming even before significant cuts to vehicle production and we expect continued pressure on factory automation and parts of instrumentation. On a positive note, the company has done a solid job of aligning opex to weaker revenue, thus mitigating some of the pressure on earnings,” he added.