3 Top Dividend Stocks To Buy In April

Apart from the company's strong track record of beating analysts' estimates for its top line, I expect the company to announce a larger than normal hike to its dividend this quarter, thanks to an influx of cash from the Tax Cuts and Jobs Act of 2017.

prior history. Investors have also been clamoring for a healthy hike after last year's somewhat modest increase. So, in short, J&J could very well end up offering a yield close to 3% later on this year, which would make it one of the most generous income stocks in all of healthcare." data-reactid="60">The drugmaker, after all, is due for another dividend hike based on its prior history. Investors have also been clamoring for a healthy hike after last year's somewhat modest increase. So, in short, J&J could very well end up offering a yield close to 3% later on this year, which would make it one of the most generous income stocks in all of healthcare.

In addition to its juicy yield, J&J is also a great income stock to own because of its 55-year history of consecutive dividend increases, triple-A rated balance sheet, and of course, its top-notch pharma pipeline that's been ranked the best-in-class by Idea Pharma for five out of the last six years.

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JNJ Dividend Chart

JNJ Dividend data by YCharts.

30 drugs in late-stage programs at the moment, and several product candidates with megablockbuster potential. The company also has the financial flexibility to execute value-creating M&A deals to keep its pharma pipeline in tip-top shape moving forward. So, there's no reason to think that J&J's fortunes are about to change anytime soon." data-reactid="76">Keeping with this theme, J&J has over 30 drugs in late-stage programs at the moment, and several product candidates with megablockbuster potential. The company also has the financial flexibility to execute value-creating M&A deals to keep its pharma pipeline in tip-top shape moving forward. So, there's no reason to think that J&J's fortunes are about to change anytime soon.

In all, J&J should make a great addition to any investor's portfolio because of the company's stellar shareholder rewards and proven ability to bring major new drugs to market in a timely fashion. 

The reward outweighs the risk 

Jason Hall (Pattern Energy Group): Over the past six months, independent renewable energy producer Pattern Energy's stock price has fallen a painful 33% from its high, pushing the dividend yield up to an insanely high 9.6%. So what's happening? In short, the market is getting spooked after changes to tax equity investing rules that could lead to reduced access to capital for Pattern and other renewable energy companies. Add in climbing interest rates, and it seems like investors are afraid Pattern's growth story will end before it really gets going. " data-reactid="79">

Jason Hall (Pattern Energy Group): Over the past six months, independent renewable energy producer Pattern Energy's stock price has fallen a painful 33% from its high, pushing the dividend yield up to an insanely high 9.6%. So what's happening? In short, the market is getting spooked after changes to tax equity investing rules that could lead to reduced access to capital for Pattern and other renewable energy companies. Add in climbing interest rates, and it seems like investors are afraid Pattern's growth story will end before it really gets going. 

This may look like a company that's heading toward a dividend cut, and there is some risk of that happening if the changes to tax equity investing rules put a squeeze on Pattern's access to capital. But it wouldn't be because the company can't afford the dividend, but rather it needed to reduce the yield in order to issue shares to raise cash at a decent rate of return. But I think that's a relatively low probability, and the market has already priced that risk into the stock. 

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PEGI Chart

PEGI data by YCharts.

Furthermore, Pattern operates in Canada and Japan in addition to the U.S., so U.S. tax equity investors aren't its only source of capital, and the company's leadership has decades of experience navigating through changing regulatory and economic cycles. Looking at the big picture, I expect the market's current reaction will be just a blip on the radar for Pattern, and shareholders who invest at current prices will come out incredibly well over the long term (even if we see a dividend cut in the short term).

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Demitrios Kalogeropoulos has no position in any of the stocks mentioned. George Budwell has no position in any of the stocks mentioned. Jason Hall owns shares of Fitbit and Pattern Energy Group. The Motley Fool owns shares of and recommends Fitbit, GoPro, and Johnson & Johnson. The Motley Fool has the following options: short May 2018 $140 calls on Johnson & Johnson. The Motley Fool has a disclosure policy.

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