What is the best way for investors to react to a stock market crash? In my opinion, it is to smell stocks with good profit prospects and solid balance sheets that have been oversold in the turmoil.
As a long-term equity investor, the recent stock market crash did not give me reason to panic. I am convinced that the volatility of the past few weeks will not jeopardize my overall returns too much. Market crashes are nothing new and studies show that, over the long term, their impact on investor profits tends to be ironed.
In this article, I would like to talk about several dividend paying stocks that I plan to buy for my ISA stocks and shares following recent price cuts.
In poor health
Dechra Pharmaceuticals might not pay the biggest dividend out there. After the stock market crash, it reports a modest 1.5%. But I would buy it thanks to its ultra-progressive dividend policy, which has seen annual payments more than double in the past five years.
This particular health care stock has a very bright future ahead of it. The animal care market is one of the fastest growing segments of the industry as people are spending more and more money on their pets. The increase in meat consumption means that Dechra can expect that the demand for medicines from the agricultural industry will also continue to increase.
If you are looking for pharmaceutical stocks with higher yields, you may want to give Alliance Pharma a ride instead. Direct reading is 2.2% here, and there is an advantage it has over Dechra. He acquires and sells drugs that have already passed the testing process, which means he doesn’t have to worry about costly development setbacks.
It is not the only string to Alliance’s bow, however, the company also has considerable distribution, wholesale and retail operations. As the world is on the brink of a painful and possibly prolonged economic downturn, healthcare companies like this could be considered one of the best UK stocks to buy right now.
Buy after the stock market crash
There are many other great dividend paying stocks to buy after the stock market crash. Water supplier United Utilities will not expect demand for its services to decline during the next recession. And that FTSE 100 business posted a dividend yield of 4.5% for this year.
The predictable nature of defense spending, meanwhile, means that QinetiQ and Ultra Electronics are also solid stocks to buy after the stock market crash. Dividend yields over time are around the 2.5% marker here. I would also be tempted to buy food manufacturers for their obvious safe haven qualities. Sausage wrap manufacturer Devro carries a huge dividend yield of 5.2% for 2020, for example.
The recent stock market crash has been particularly colossal. And there could be another one just around the corner. But this is not a reason for investors to stop building their portfolios. If you want to get rich by investing in stocks, you must use recent price declines as a buying opportunity. And I would start with some of the stocks discussed here.
While global markets are in turmoil as the coronavirus pandemic tightens its grip, turning to actions to generate income is no longer as simple as before…
As the realities of “locked-in life” start to bite, many high-yield stock market companies have either put a brake on their dividend payments … or worse, have chosen to suspend them completely – for the short term at least.
With so many blue chip and mid cap companies struggling to accumulate cash right now, where are we going to income investors to turn to decent returns?
Fortunately, The Motley Fool is here to help you…
Our analyst has uncovered what he thinks is a very attractive option for income-seeking investors – a company that he believes has a “reliable and defensive” business model, combined with a current dividend yield planned to 4.2% to start!*
But here’s the really exciting part …
This company even has the form to overcome this kind of situation, too … having already increased its sales and profits in 2008 and 2009, when the world was plunged into the deepest economic crisis since the Great Depression.
* Please note that dividends are variable and not guaranteed.
Royston Wild has no position in any of the actions mentioned. The Motley Fool UK holds shares and has recommended Devro. Motley Fool UK recommended Alliance Pharma. The opinions expressed on the companies mentioned in this article are those of the author and may therefore differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that taking into account a diverse range of information us better investors.