Are you new to investing and ready to build a dividend portfolio? If so, you may be looking at hundreds of stocks and feeling somewhat overwhelmed.
Today, I’d like to discuss three FTSE 100 stocks that you may want to analyse for potential inclusion in a long-term portfolio.
All investing involves some level of risk and there’s no guarantee as to how any of these three stocks are going to perform in the coming years. However, they all have characteristics that may make them appropriate for most portfolios. They offer regular cash payments to shareholders in the form of a dividend, are companies with large market caps, and come from a wide range of sectors, offering some degree of diversification.
In mid-August, insurer Admiral Group (LSE: ADM) released interim results that pleased the City. Most of our readers would be familiar with the group’s offerings that include vehicle, household and travel insurance in the UK. It also owns Confused.com, a price comparison website. Outside the UK, it has several other insurance and price comparison businesses.
Pre-tax profits rose 4% in the six months to June, to £218m. Investors were pleased to note that motor policies grew by around 70,000 year-on-year to 4.33m.
Year-to-date ADM shares are up about 5.6%. The dividend yield stands at 4.2% and the stock is expected to go ex-dividend next in May 2020.
Like the legendary investor Warren Buffett, who loves insurance companies, you may want to include the stock in a long-term portfolio.
Carnival (LSE: CCL) is the world’s largest cruise operator and its shares are dual-listed on the LSE and NYSE in the US. The group’s different cruise line brands operate a combined fleet of over 100 vessels visiting more than 700 ports globally.
Annually, the combined fleet welcomes almost 11.5m guests aboard, or about 50% of the global cruise market.
I believe that the potential growth, especially in emerging economies of Asia as well as Latin America, is likely to be a major catalyst for CCL shares. Even in the US, only an estimated 4% of the population takes cruise trips annually.
The cruise operator offers quarterly dividends with a yield of around 4.4%. The shares, which went ex-dividend on 21 November, trade at a trailing P/E of 9.5. The group also has an extensive share repurchase programme.
If you are nervous that we may potentially be headed for an economic slowdown both in the UK and globally, then consumer products giant Unilever (LSE: ULVR) may be a stock to consider.
After all, the group managed to weather the recession of 2008/09 quite well, in part due to its growing exposure to the developing world. Now its revenues coming from emerging markets are over 50% of its total. The strength of its brands gives the group the benefit of terrific pricing power.
On 17 October, ULVR released its third-quarter 2019 trading statement that got a mixed reception from investors and the share price declined. However, it has since recovered, another sign that most investors regard any pullback as a buying opportunity.
It also offers quarterly dividends with a yield of around 3%. The shares went ex-dividend on 31 October. The company has also bought back stock during the year.
If you want to invest in a multinational company whose consumer products have predictable and steady demand, then you may want to do due diligence on Unilever.
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tezcang has CCL covered calls (December 6 expiry) on CCL ADR shares listed on NYSE. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Admiral Group and Carnival. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2019