Christmas is just a few days away, and while over the years in the past this time was blessed with rising stock markets, 2018 doesn’t look much promising. The almost traditional year-end-rally is very unlikely this year. And that’s not bad news.
A lot of stocks have suffered in 2018. Some, deserved a correction. Some are just cursed by uncertainty about their future. And others have just been dragged down with the rest. I believe, it’s a great time to take a closer look at some of these “others” and to spill a few Euros into your investment account.
I usually don’t recommend any specific stock and the following stocks are not meant to be a recommendation in any way. Every investor needs to do his own due diligence and invest according to his or her own sound judgment. Having said that, here are my favourite stocks to take a closer look at. They all have the potential not only to help you create an additional income through great dividends, but also have in my humble opinion, the potential to find back to earlier glory in the next months and years to come.
There is no need to explain much about this company. It’s one of the richest, most profitable and most innovative companies on earth. You might think that Samsung, Huawei or LG got great products, but just consider this: While Apple certainly doesn’t have the largest market share on mobile phones, it’s cashing over 90% of worldwide mobile phone profits. This is considering ALL mobile phone brands combined. Sounds ridiculous? Well, it is. But they charge you 1000$ a phone and they get them sold. On top of that, their phone revenues are still a major factor, but revenues from the App store, cloud business, computing, wearables and equipment are becoming stronger every year. The stock went down significantly over the last weeks on worries from analysts that iPhone sales might end up below expectations. I am pretty confident though, that in a few weeks from now, Apple will release its Q4 earnings and will once again crush all estimates. The dividend yield is not very high for now at only 1,71%. But please consider that Apple is increasing its yield every year by double digits and while the stock price keeps rising, the yield will probably always look low. Therefore, buying the stock now is probably not a bad move, and while profits and dividends will keep rising, so will the price per share. In 10-15 years from now, I believe that chances are great to have double-digit dividend yield on cost. There is also no need to go all-in. The market might drag Apple further down, so initiating a smaller position and adding more shares later might be not a wrong tactic as well.
Communications might be super risky, but AT&T is now at a point that is hard to ignore. This stock is one of the most reliable dividend payers out there and it offers currently 6,6% yield. Just yesterday the company announced another dividend increase, as it does every single year, like clock-work. Investors willing to ignore market fluctuations and seasonal challenges might be happy about getting on board now and start cashing in this juicy and sweet dividend being paid out every quarter. Also, since the share lost lot’s of value over the recent years, there is a good chance for a turn-around story in 2019 or 2020. Management finally acknowledged that it’s time to stop using their credit cards and time to pay-back debt. Once this starts, more trust should return to the company and I do expect it to recover.
Follow smart people who do smart investments. GlaxoSmithKline is one of the major players in the medical industry and as Bill Gates put it: They can do things that no one else can do. This stock is very stable passing currently through market fluctuations like an ice-breaker in the arctic sea. Reliable, quarterly payments, a great yield of 5,29% and showing no signs of weakness whatsoever. On top, no matter where you are located, consider this: The company is headquartered in the UK and doesn’t charge any withholding tax on dividends.
Royal Dutch Shell
Normally I stay away from oil. I don’t like oil and I don’t really want to support them in any way. But we have to be frank: Without oil, the world as we know it wouldn’t exist. Sure, the by-products are destroying our world, but we all know that we wouldn’t be where we are without having reaped the benefits of it. So, while I am still not a fan of oil, I appreciate companies that are steadily transitioning into the new energy era, and Shell is one of those companies. Their investments into renewables are remarkable and I believe that this company will transition just in time, to weather any future storm that will start shaking big oil sooner or later. On top of that, they still do make amazing profits and pay a dividend with 6,27% yield. Paid out quarterly and without any withholding tax, Shell is in my opinion a great investment.
If you want to stay away from individual stocks, it might be not a bad idea to take a look at an index-ETF. Here, my preference right now is on the German mid-cap sector, the MDAX. It’s one of the most successful index in the world and while it may be volatile, over time it always not only recovered, but also produced great returns for patient investors.
So here you go.
Don’t waste your money on some shiny boxes with sweatshirts that no one wants to wear or toys that will start collecting dust after a month. You most probably don’t need a new phone or a new laptop and there is also a high chance that your car or motorbike can take you on for another year. Grab that cash and invest. Chances are, this might turn out to be a much more valuable and rewarding gift for yourself and for your family, for many more years to come.
DISCLOSURE: I owe all the stocks mentioned in this article.