There is clearly some selling capitulation towards the technology and small-cap stocks at this time. Following the run-up in 2013, we are now seeing the selling action picking up towards the higher-beta stocks. The S&P 500 and DOW may be looking fine, but the growth-oriented NASDAQ and Russell 2000 are showing added stock market risk. (Read “NASDAQ, Russell 2000 Signaling Buying Opportunity Ahead?”)
It’s time to unload some of your riskier holdings and look at some of the dividend-paying stocks that would likely provide more of a buffer against the current negativity in growth stocks.
Below, I have listed five dividend-paying stocks that are worth a look, especially if the overall stock market slides lower.
In the investment management sector, Och-Ziff Capital Management Group LLC (NYSE/OZM) pays out an impressive dividend yield. The company runs money from pension funds and other areas. In the fourth quarter, Och-Ziff beat the Thomson Financial consensus estimate by $0.32 after reporting a dividend of $1.15 per diluted share versus the consensus $0.83 per diluted share. According to the company, its assets under management have increased to $42.7 billion as of April 1, 2014.
Also in the investment area, Fortress Investment Group LLC (NYSE/FIG) has about $61.8 billion in assets under management as of the end of December. Fortress also pays out dividends of $0.32 annually for a yield of 4.4%.
For you pet owners, you are probably familiar with PetMed Express, Inc. (NASDAQ/PETS), the largest pet pharmacy in the United States selling prescription and non-prescription pet medications along with other health products. The company pays out a quarterly dividend of $0.17 for a dividend yield of 5.2%. The stock advanced a mere 0.63% over the past 52 weeks, which is well below the 18.68% gain by the S&P 500.
A boring but steady performer is Knoll, Inc. (NYSE/KNL), which makes workplace and residential furnishings that have won multiple awards. Trading at 13.64-times (X) its estimated 2015 earnings per share (EPS), the stock has excellent value. Knoll has outperformed the S&P 500, gaining 22.11% over the last 52 weeks, and the stock’s upside capital appreciation potential is huge. You can still earn a nice 2.6% dividend yield.
Finally, in the biotech area, Meridian Bioscience, Inc. (NASDAQ/VIVO) may be worth a look. Meridian researches, manufactures, and sells diagnostic test kits, purified reagents, and other products. The kits are used for such medical conditions as gastrointestinal, viral, and respiratory infections. Sales are to hospitals, laboratories, research centers, diagnostics manufacturers, and biotech companies in more than 60 countries. Meridian has good upside and pays a 3.7% dividend yield. The stock advanced only 2.92% over the past 52 weeks, which is well below the advance by the S&P 500.