Published Thu, 30 Jul 2020 04:08:44 -0400 on Seeking Alpha
Seeking AlphaDividend Quick Picks3 Low-Beta Blue Chips With High Dividend YieldsJul. 30, 2020 4:08 AM ET|| Includes: ABBV, O, VZby: Gen AlphaGen Alpha Long only, value, Growth, growth at reasonable priceSummaryDuring volatile times, low-beta stocks are a welcome sight as they can provide stability to the portfolio.
In addition to having a low-beta value, I look for stocks with an above-average dividend yield to provide stable and growing income.
In this article, I evaluate why all three stocks are worth owning.
When it comes to evaluating returns on investment, the term “alpha” gets used a lot. For those unaware of what this term means, alpha refers to the percentage of return on investment above the risk-free rate, of which the Treasury bond rate is commonly used as a proxy. Stocks and bonds should therefore provide investors with alpha, as a way to compensate them for the additional risks that they are taking beyond what they would otherwise get in a “risk-free” investment.
While alpha gets a lot of attention, what I see as often being ignored is the other investment evaluator: beta. Beta is a measurement of market volatility, and stocks with low beta values have less swings in share price compared to the broader market. As you can imagine, low beta stocks can be especially welcome during periods of market volatility.
For the purposes of this article, I evaluate three stocks with a beta of 1.0 or lower, and with a dividend yield greater than what the S&P 500 currently provides. My intent is not to provide the lowest-beta stocks nor the highest-yielding stocks, but rather to strike a balance between beta and dividend yield. I believe this provides a winning combination that helps investors sleep better at night during turbulent times, all while generating stable income, so let’s get started!
AbbVie (ABBV) is a stock that gets a lot of attention, and rightfully so. It produces the top-selling drug, Humira, which accounts for... Read more
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