3 Dividend Stocks for 2020 - Dividend Stocks at a Discount? | Summary and Q&A

TL;DR

Three dividend stocks facing difficulties: Home Depot's steady revenue growth may slow down, Chevron's stock is impacted by lower oil prices, and AbbVie is reliant on a single product.

Key Insights

• 😀 Home Depot's stock may face challenges due to concerns about slowing revenue growth and the impact of external factors like hurricanes and tariffs.
• 💐 Chevron's stock has been affected by lower oil prices, but its ownership of valuable properties in the Permian Basin and consistent free cash flow can support its dividend and stock buybacks.
• 🛄 AbbVie heavily relies on the success of the Humira drug, but its acquisition of Allergan aims to diversify its portfolio and reduce dependency on Humira.
• 😀 Despite facing challenges, all three companies offer attractive dividend yields, making them potentially appealing investments.
• ☠️ The Federal Reserve's lowered interest rates and falling bond yields may benefit Home Depot and support the housing market.
• 💪 Home Depot, Chevron, and AbbVie may have the potential for a strong future, especially with their dividend payments serving as a protective buffer during economic uncertainty.

Transcript

Hi I'm Jimmy in this video I'm going to walk through three of the best dividend stocks that I could find that have run into issues recently or run into negative news and that's hurt their stock for one reason or another. Now I actually came up with these companies because I've been out looking for undervalued dividend stocks that look like they cou... Read More

Questions & Answers

Q: What are the main concerns about Home Depot's future prospects?

Analysts have expressed concerns about a potential slowdown in Home Depot's steady revenue growth, as well as the impact of factors like hurricanes and tariffs on the company's performance. However, the Federal Reserve's lowered interest rates and falling bond yields may support the housing market and ultimately benefit Home Depot.

Q: How has Chevron been affected by the price of oil?

Chevron's stock has experienced declines over the past year due to lower oil prices. As oil prices decrease, energy companies' profit margins are also impacted. However, Chevron's ownership of properties in the Permian Basin, which is a favorable oil drilling location, has allowed the company to generate steady free cash flow and support its dividend payouts.

Q: What is the main challenge faced by AbbVie?

AbbVie heavily relies on the Humira drug for a significant portion of its revenue. The upcoming expiration of Humira's patents in 2023 poses a direct competition risk. However, AbbVie's acquisition of Allergan aims to diversify its portfolio and reduce its reliance on Humira.

Q: Why is AbbVie's dividend attractive to investors?

Despite facing challenges, AbbVie offers a dividend yield of around 6.7%, which is supported by its strong history of consistent dividend payments. This high yield, coupled with the company's low forward PE ratio, makes it an appealing investment option for long-term investors.

Summary & Key Takeaways

• Home Depot's stock has increased by almost 11% in the past year, but concerns about slowing revenue growth and effects from factors like hurricanes and tariffs have affected its stock performance.

• Chevron's attempt to acquire Anadarko Petroleum failed, and the stock has been impacted by lower oil prices. However, Chevron's ownership of valuable properties in the Permian Basin and consistent free cash flow can support its dividend and stock buyback program.

• AbbVie's stock has declined by over 20% due to its heavy reliance on the Humira drug for revenue. The acquisition of Allergan may help diversify AbbVie's portfolio, and the company's low forward PE ratio and strong dividend yield make it an attractive investment option.