5 Dividend Stocks With Great Long-term Growth Prospects

Stock markets across the globe have been spooked by a concoction of factors in the recent past. The financial markets have been buffeted by issues such as slowdown in the Chinese economy, uncertainty surrounding U.S. interest rate hike, volatile crude oil prices, a strong greenback and depressed energy markets. These factors contributed to a rough ride for investors in the early part of 2016.

Concerns Loom

While the markets traversed through a spate of headwinds and ended in positive territory in May, a number of factors can cause jitters this month. Fears of “Brexit” are fuelling turmoil in the Eurozone. Britain will vote whether or not to remain in the European Union on June 23. A potential exit would bring instability to Europe, which could send shockwaves through global stock markets.

The U.S. market, on the other hand, is see-sawing between bulls and bears. The lower-than-expected May job data has reduced the likelihood of a Fed rate hike. The U.S. economy created a paltry 38,000 jobs in May, well below the consensus estimate of 203,000. All eyes are now fixed on next week's Federal Reserve policy meeting, outcome of which will have a profound effect on the U.S. stock market.

Concerns over China’s future growth also engulf global markets. China’s economy hit a wall in 2015, growing at its slowest pace in 25 years as a raft of government stimulus measures (including interest rate cuts) failed to stabilize its financial markets. Moreover, the world’s second-largest economy rose at an annual rate of 6.7% in the first quarter of 2016, its slowest in seven years. The county’s economic growth is a major element of the global outlook.

Look for Safe Havens Amid Volatility

With stock market volatility unlikely to subside anytime soon, it is wise for investors to look for safe-haven stocks that promise attractive and steady returns. Stocks offering healthy dividend hold up well in an uncertain macroeconomic environment.

Stocks with solid dividend yield and attractive growth prospects offer excellent choices for investors seeking to create a portfolio that not only performs well in a growing market, but also offer some downside protection during market downturns. In other words, high-yielding dividend stocks provide a cushion against stormy markets.

Consistent dividend payouts also underscore a company’s financial strength and stability. Dividend income also helps to mitigate losses amid a bear market.

In the words of the late Richard Russell – long-time publisher of the Dow Theory Letters – “A stock dividend is something tangible – it’s not an earnings projection; it’s something solid, in hand. A stock dividend is a true return on the investment. Everything else is hope and speculation.”

5 Top-Notch Dividend Plays

Amid the current volatile macroeconomic backdrop, it would be a prudent move to add some top-quality dividend stocks in your portfolio. We have employed the Zacks Stocks Screener to find companies that offer a dividend yield of more than 2%, and sport a favorable Zacks Rank.

Below we highlight five top-ranked stocks that offer attractive dividend yield and also boast solid long-term growth prospects.

Gaming and Leisure Properties, Inc (NASDAQ:GLPI)

The Pennsylvania-based company is a self-administered, self-managed REIT mainly engaged in the property business, which consist of owning, acquiring, developing, expanding, managing, and leasing gaming and associated facilities.

This Zacks Rank #2 (Buy) company is currently offering a solid dividend yield of 6.68%. The stock has gained roughly 26% year to date. Percentage change long-term growth estimate (% change in mean long-term EPS growth estimate over the last four weeks) for the stock is 22.73%.

Banco de Chile (NYSE:BCH)

This Zacks Rank #2 company is mainly engaged in commercial banking in Chile, offering general banking services to a diverse customer base including large corporations, small and mid-sized businesses and individuals.

The stock is currently offering a healthy dividend yield of 3.86% and has delivered a year-to-date return of around 10%. Percentage change long-term growth estimate for the stock is 57.69%.

Cherry Hill Mortgage Investment Corp. (NYSE:CHMI)

New Jersey-based Cherry Hill Mortgage is a residential real estate finance company that acquires, invests in and manages residential mortgage assets across the U.S. It manages a range of servicing related assets, residential mortgage-backed securities, prime mortgage loans and other residential mortgage assets.

This Zacks Rank #2 company is currently offering a dividend yield of 12.52% and has gained roughly 25% year to date. Percentage change long-term growth estimate for the stock is 15.15%.

Education Realty Trust Inc. (NYSE:EDR)

This Tennessee-based company manages, and develops student housing communities located near university campuses across the U.S. It also manages student housing communities for college and university systems nationwide.

This Zacks Rank #2 stock is currently offering a dividend yield of 3.57% and has gained roughly 12% year to date. Percentage change long-term growth estimate for the stock is 265.29%.

National Grid (LON:NG) plc (NYSE:NGG)

U.K.-based National Grid is an international energy delivery company that transmits and distributes electricity and natural gas. The company own and operate the high-voltage electricity transmission network in England and Wales, and Britain's natural gas transportation system. It is also among the top ten electricity companies In the U.S.

This Zacks Rank #2 stock is currently offering a dividend yield of 4.38% and has gained roughly 7% year to date. Percentage change long-term growth estimate for the stock is 51.6%.


NATL GRID -ADR (NGG): Free Stock Analysis Report

BANCO DE CHILE (BCH): Free Stock Analysis Report

EDUCATION RLTY (EDR): Free Stock Analysis Report

CHERRY HILL MTG (CHMI): Free Stock Analysis Report

GAMING AND LEIS (GLPI): Free Stock Analysis Report

Original post