What’s the best way for investors to react to a stock market crash? In my opinion it’s to sniff out shares with bright profit outlooks and strong balance sheets that have been oversold in the commotion.
As a long-term stock investor myself, the recent stock market crash hasn’t given me reason to panic. I’m confident that the volatility of recent weeks won’t put too big a dent in my overall returns. Market crashes are nothing new and studies show that, over a long-term time horizon, their impact on investor profits tends to be ironed out.
In this piece I’d like to talk about several dividend-paying stocks I’m thinking of buying for my Stocks and Shares ISA following recent price falls.
In rude health
Dechra Pharmaceuticals might not pay the biggest dividend out there. After the stock market crash it yields a modest 1.5%. But I’d buy it on the back of its ultra-progressive dividend policy, one that has seen annual payouts more than double during the past five years.
This particular healthcare stock has a very bright future in front of it. The animalcare market is one of the sector’s fastest-growing segments as people spend more and more money on their pets. Rising meat consumption means that Dechra can expect drugs demand from the farming industry to keep rising too.
If you’re looking for pharma stocks with bigger yields then you might want to give Alliance Pharma a spin instead. The forward reading here sits at 2.2%, and there’s one advantage it has over Dechra. It acquires and sells drugs that have already passed the testing process, meaning that it doesn’t have to worry about costly development setbacks.
This isn’t the only one string to Alliance’s bow however, the business also boasting considerable distribution, wholesale and retail operations. With the world on the cusp of a painful and possibly prolonged economic downturn, healthcare firms like this could be considered some of the best UK shares to buy right now.
Buying after the market crash
There are many other terrific dividend-paying stocks to be bought following the stock market crash. Water supplier United Utilities won’t be expecting demand for its services to recede during the upcoming recession. And this FTSE 100 business carries a mighty 4.5% dividend yield for this year.
The predictable nature of defence spending, meanwhile, means that QinetiQ and Ultra Electronics are also rock-solid stocks to buy after the market crash. Forward dividend yields here sit around the 2.5% marker. I’d also be tempted to buy food manufacturers for their obvious safe-haven qualities. Sausage casings maker Devro carries a gigantic 5.2% dividend yield for 2020, for instance.
The recent stock market crash was particularly colossal. And there could be another one just around the corner. But this is no reason for investors to stop building their portfolios. If you want to get rich from share investing you need to use recent price falls as a buying opportunity. And I’d start with some of the stocks discussed here.
With global markets in turmoil as the coronavirus pandemic tightens its grip, turning to shares to generate income isn’t as simple as it used to be…
As the realities of ‘life under lockdown’ begin to bite, many of the stock market’s ‘go-to’ high-yielding companies have either taken an axe to their dividend pay-outs… or worse, opted to suspended them altogether – for the near-term at least.
With so many blue-chip and mid-cap companies scrambling to hoard cash right now, where are we income investors to turn for decent yields?
Fortunately, The Motley Fool is here to help…
Our analyst has unearthed what he believes could be a very attractive option for income- seeking investors – a company that, in his view, boasts a ‘reliably defensive’ business model, combined with a current forecast dividend yield of 4.2% to boot!*
But here’s the really exciting part…
This business even has form in riding out this kind of situation, too… having previously increased sales and profits back in 2008 and 2009 when the world was gripped in the deepest economic crisis since the Great Depression.
*Please be aware that dividends are variable and not guaranteed.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Devro. The Motley Fool UK has recommended Alliance Pharma. 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.