Stocks for Bad Times (and Good Times)

As the market tumbles and the Dow continues to stay under 10,000, a big question is what should we buy now as a replacement for the AAPL we sold. The stock market is tumbling and I want some safe havens to park the money forever or at least until I feel like getting back into more risky investments.

Right now there are a few stocks I have in mind that can offer just such a proposition. I’m going to post the same age old advice that will never go out of fashion. However as of now the opportunity is fantastic thanks to depressed stock prices.

Without further adieu, let me offer my suggestion – large cap dividend paying stocks. I have a few in mind that pay handsome dividends and are not going anywhere:

1. VZ – Verizon:  Current Dividend is about 7% and the company is not going anywhere. They are the most reliable wireless network  and will be the first to have 4G nationwide. They are likely to get an iPhone next year and the stock is near recent lows. I have an order in if the stock reaches the mid $25s.

2. KMP – Kinder Morgan Energy Partners: Current Dividend is about 6.6%. KMP is an energy transport/storage company and is structured as a partnership (more work during tax time)  but the dividend yield is worth it. We own some KMP and inspite of the ridiculous P/E ratio I would still recommend this one. The dividend has been constantly rising.

3. MO – Altria: Current Dividend is about 6.9%. If you dont mind buying a cigarette  company stock, this one is a good buy always.

4. T – AT&T: Current Dividend is about 6.9%. AT&T inspite of network issues is doing well thanks to iPhone exclusivity. Even if the iPhone hits Verizon, there should be minimal short term impact on AT&T because of users being locked into long term contracts and famlily/corporate plans. If I were to make a selection between AT&T and Verizon, I would pick VZ but you can do your own research and decide.

If you are into researching stocks, here is a link to the Yahoo Finance screener for companies with market cap > $10 billion and dividend of more than 5%. There are some household names in there like drug companies AstraZeneca – AZN, Glaxo – GSK, Bristoll Myers – BMY, energy companies like Shell – RDS-B and Total – TOT.

If you would like to look into smaller companies that pay good dividends you can adjust the screener and here are a couple that I recommend you look at – TLP (8% dividend) – another energy storage company and BGS (6.5% dividend, we own some) – a food company with some known grocery store items.

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