Harry Domash's Winning Investing


 Five Dividend Stocks For 2017 

It’s that time of year again. I’m going to suggest five stocks for you to consider for 2017.

Looking at last year’s numbers, from the time the article was published (January 11), through December 30, my picks averaged a 5% return, woefully underperforming the S&P 500’s 16% gain. Four of last year’s picks recorded gains, but one big loser, Life Storage (LSI, formerly SSS) down 19%, ruined everything. AbbVie (ABBV), up 21%, did the best.

Humbled, but undaunted, here are five new picks for 2017. As usual, they are all dividend payers.  

CenturyLink (CTL): Originally a rural telephone company, CenturyLink  has grown via acquisitions to become a major provider of broadband, voice, video, data and managed services to residential and business customers. A recent large acquisition could spur even more growth. Meanwhile, CenturyLink is paying a hefty 8.5% dividend yield.

HP, Inc. (HPQ): Hewlett Packard, Silicon Valley’s first high-tech firm, split into two separate companies in November 2015. HP Inc. retained HP’s slow growth computer and printer businesses, while Hewlett Packard Enterprise Company (HPE), took over HP's sexy networking and software services businesses. But HP Inc. could turn out to be the Cinderella of this story. It recently introduced a new line of 3D printers that could change everything. 3D printers, used to create three-dimensional objects, have been too slow to be used for mass production applications. But HP says its new "Jet Fusion" 3D printers can produce products “ten times faster” and at lower cost than competitive printers. If so, 3D printer sales could turn HP, Inc. into a fast growth company. Dividend yield 3.6%.

Carnival (CCL): The largest cruise ship operator, Carnival operates more than 100 ships under 10 brands including Carnival, Princess, Holland America and Cunard. With its shares returning only 8% last year, the market isn’t excited about Carnival’s growth prospects. But they haven’t been paying attention. Carnival has reported strong growth in recent quarters and has plans underway to continue that story. Dividend yield is 2.7%.

Kraft Heinz Company (KHC): In 2013, Warren Buffet’s Berkshire Hathaway and 3G Capital, an investment group founded by a trio of Brazilian billionaires, bought out H.J. Heinz. Then, in 2015, they took over Kraft Foods and merged it with Heinz to form Kraft Heinz. The 3G management is applying innovate strategies to spur growth. Dividend yield is 2.7%.

NutriSystem (NTRI): Weight loss marketer NutriSystem was floundering until new management took over in November 2012. Spurred by new product introductions, earnings and revenue growth resumed in 2014 and has continued, uninterrupted, since then. But there’s more to this story. NutriSystem recently acquired the rights to the “South Beach Diet” brand and plans to introduce its South Beach Diet programs early this year. That should be a big deal. Dividend yield is 2.0%.

As always, consider my picks to be research candidates, not a buy list. The more you know about your stocks, the better your results.

published 2/7/17

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