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3 Stocks to Own as the Rally Loses Steam

3 Stocks to Own as the Rally Loses Steam
February 10
11:15 2017

(InvestorsAlley) – After breaking through the 20,000 mark, the rally in the Dow looks like it is beginning to stall. If the market starts to reverse, many stocks could be hit hard, but owning these three stocks, with their safe dividends, could protect your portfolio from heavy losses.

The Dow Jones hit the landmark 20,000 mark earlier this month – for the first time ever. Now, the wheels might be coming off.

The new all-time high could sync well with the Donald Trump top.

That’s right, the rally in the stock market since the election of Donald Trump as President may be wearing thin. It helped push the Dow to over 20,000, but the catalysts for higher returns are wearing thin as well.

Each time the Dow hits new highs, the following returns diminish. The law of large numbers is working against us. So, when the markets hit all-time highs, it’s usually a good time to start looking for ‘safer’ places to invest.

Economic growth has been declining since 2015 and it appears companies are feeling the pressure. However, that doesn’t mean investors have to hide. Going to an ‘all cash’ position is perhaps the worst thing investors could do. Instead, look for buying opportunities in safe dividend stocks. Fourth-quarter earnings season has created some great buying opportunities in ‘safe’ stocks. With all that in mind, here are the top three stocks to own for the Trump top:

Stock For A Trump Top No. 1: Bristol-Myers Squibb (NYSE: BMY)

Bristol-Myers reported earnings at the end of January, and shares are hitting fresh 52-week lows – down 15% in the last month. In fact, we’re hitting multi-year lows. Bristol-Myers had previously been struggling due to the weakness for its cancer drug, Opdivo. As well, the Hepatitis C market is getting more competitive, pressuring Bristol-Myers’ other drugs.

However, the Hepatitis C franchise is becoming less important for Bristol-Myers. The company still managed to see strong revenue growth of 22% last quarter. Impressive growth for a company that’s cheap at less than 15 times next year’s earnings estimates. And its prize drug, Opdivo, could still live up to the hype – and more. In the fourth quarter, Bristol-Myers’ Opdivo sales more than tripled and hit $1.3 billion.

Opdivo also just got the green light last week to be used for the treatment of the most common type of bladder cancer. Opdivo is a ‘new class’ of drug that uses the body’s immune system to fight cancer. It’s already used to treat lung cancer and kidney cancer. The company also offers a 3.1% dividend yield. Bristol-Myers has also upped its annual dividend for seven straight years.

Stock For A Trump Top No. 2: Qualcomm (NASDAQ: QCOM)

Qualcomm posted fourth quarter earnings heading into February, which was a mixed bag. Revenues missed expectations, with the biggest issue being Apple (NASDAQ: AAPL).That is, legal issues, where Apple is suing Qualcomm for exorbitant royalties. With that, Qualcomm shares have fallen 20% in the last month.

On the bright side, Qualcomm saw a near 10% increase in 3G and 4G shipments during the fourth quarter. The recent lawsuit headlines are a near-term buying opportunity as the long-term thesis is still intact for Qualcomm. The $1.1 billion that Apple is seeking in its lawsuit is a drop in the bucket for this $78 billion market cap company with $30 billion in cash.

SEE ALSO: The One Stock You Want to Own to Cash in on Trump’s $1 Trillion Infrastructure Boom

Not to mention, it has an impressive dividend. Its dividend yield comes in at 4% and its upped its annual dividend for 14 straight years. Plus, its valuation is too cheap to ignore – coming in at 11 times forward earnings. It generates plenty of free cash flow and has key catalysts with new technologies in the Internet of Things and connected device world.

Stock For A Trump Top No. 3: Hess Corporation (NYSE: HES)

Hess is perhaps the best opportunity for investors to take advantage of the still weak oil environment. Hess released earnings at the end of January and shares have fallen 14% in the last month. It still pays a 1.9% dividend yield and is a relatively safe play in the energy markets.

It has one of the best balance sheets in the industry and is levered more toward oil compared to some of the oil Supermajors, like ConocoPhillips (NYSE: COP). Hess also has exciting oil fields that can keep its reserves growing – from unconventional oil to deep water, while still having a relatively simple structure for an energy company.

In the end, Trump proved to be great for the market, for a few months. However, all-time market highs coupled with slowing economic growth are a signal to find safe stocks. The three above are not only well-established dividend payers but are also very cheap given the recent overreactions to earning season.

Urgent Live Strategy Session for a Market Losing Steam: THIS WEDNESDAY

Join me on Wednesday, February 8th for a live one hour growth stock investing and strategy session that will show you where you can find attractive growth stocks… even when the market is at all-time highs and looks to be losing a bit of its steam.

With the market charging ever higher a lot of investors are wondering where to find stocks trading at decent discounts. On Wednesday night I’ll show you.

I’ll share my step by step method for finding growth stocks just like the ones I’ve recently delivered to my readers… like 78%, 88%, 95%, 226%… even 331% in just six months.

I’m also giving out the names and tickers of my best actionable growth stocks you’ll want to pick up for your portfolio.

3 Safe Stocks to Own as the Market Rally Loses Steam

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