Investors looking to go long on stocks right now could be in for a wild ride. But over time, a few strategies can ensure that buying during this period of market fear leads to great results.
While the market selloff of the past few months may lead to investors swearing off of stocks, chances are it won’t be long before investors start piling into the next fad.
However, one strategy stands the test of time. And that’s investing in companies that pay a growing dividend. This dividend growth strategy covers a number of leading companies across many sectors, so there’s rarely a shortage of opportunities.
Even with the recent market selloff, a number of companies are announcing dividend hikes now. One name is PepsiCo (PEP). The beverage and snack food giant just raised its annual payout to $1.15 (paid quarterly). That’s a 2.6 percent yield now, but it’s also a 7 percent increase compared to the dividend payment a year ago.
Action to take: Shares are up 16 percent compared to a year ago, while the S&P 500 is largely flat. That’s likely due to the company’s steady growth and defensive nature. Investors should consider shares, especially with the company’s long-term dividend growth strategy in place.
For traders, the October $180 calls, last going for about $5.40, can leverage a further move higher in share in the coming months. Traders should look for mid-double-digit gains of better and book profits well before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.