Dollar General Tops Morningstar’s List of Dividends

Dollar General Tops Morningstar’s List of Dividends

Given all the turmoil in the financial markets lately, you might be interested in the regular income stream and potential capital gains of dividend stocks.

Vanguard High Dividend Yield Index ETF (VYM) It is down 7% year-to-date, significantly outperforming the S&P 500, which is down 20%.

Morningstar has put together a list of the top 10 dividend stocks that are widely owned by the “ultimate stock pickers” – 26 top money managers.

The research firm examines companies that it believes have sustainable competitive advantages. Those are the advantages that “should allow them to generate the increased returns needed to maintain their profits over the long term,” according to comment from Morningstar analysts Verushka Shetty and Eric Compton.

“We are also looking at companies, where there is less uncertainty on the part of our analysts regarding future cash flows,” the analysts said.

β€œWe achieve this by examining holdings that are held broadly…our senior managers, who are generating more returns than the S&P 500, have broad or narrow economic moats, and have uncertainty ratings of either low or medium.”

Top 10 . List

Morningstar list includes:

1. general dollar (DJ) , owned by seven funds. Dividend yield: 0.9%.

2. Verizon (VZ) , owned by seven funds. Dividend yield: 6.4%.

3. Automatic data processing (ADP) , owned by four funds. Dividend yield: 1.8%.

4. Gilead Sciences (Moh / lacquer) , owned by four funds. Dividend yield: 4.5%.

5. Colgate Palmolive (CL) , owned by four funds. Dividend yield: 2.5%.

6. AstraZeneca (AZN) , owned by four funds. Dividend yield: 2.5%.

7. Cisco (SYY) , owned by four funds. Dividend yield: 2.5%.

8. GSK (GSK) , owned by four funds. Dividend yield: 8.2%.

9. Altria (MO) , owned by four funds. Dividend yield: 8.8%.

10. Archer Daniels Midland (AD) , maintained by three funds. Dividend yield: 1.8%.

Morningstar’s outlook on the general dollar

Morningstar analyst Zain Akbari dedicates the company a narrow trench and puts the fair value of the stock at $227. It was recently trading at $241.

“Despite the increased competition that we believe is reducing its competitiveness, Dollar General’s network of stores with a prime location, low-priced items and advantageous supply and distribution capabilities should allow it to generate economic returns,” he wrote in a commentary.

Akbari said the company is benefiting from a footprint focused on sparsely populated areas that cannot support many retailers.

Morningstar takes on Verizon

Morningstar analyst Michael Hodel gives Verizon a tight moat and puts the stock’s fair value at $59. It was recently traded at $39.48.

“Verizon has taken steps to ensure that it remains well positioned in the traditional wireless business,” he wrote in a comment.

β€œWe believe Verizon will deliver consistent results over the long term, but growth is likely to be modest. Rivals AT&T (T) and T-Mobile (TMUS) Offering comparable services and selling them at similar prices, which we expect will reduce Verizon’s market share over time.”

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