Coming into 2019, Wall Street found itself in a near state of frenzy, as a severe fourth-quarter pullback had many investors wondering whether the stock market's near 10-year bull run was ending. Panicking during such moments is rarely profitable, but with low interest rates not offering much yield and some quality income stocks trading at fire sale prices, U.S. News highlighted 10 of the best dividend stocks to buy for 2019. Year-to-date, only three of those picks have declined, largely because they made massive acquisitions. Here's an updated snapshot of each dividend stock of 2019 and its year-to-date performance.
Target Corp. (NYSE: TGT)
One of the simple truths that made Target one of the best dividend stocks to buy for 2019 at the beginning of the year remains the case more than seven months later: TGT plays third-fiddle to Amazon.com (AMZN) and Walmart (WMT) when it comes to mainstream retail stocks. Despite a stellar rally this year, shares still trade for less than half Walmart's earnings multiple (15.6 vs. 37). Is this any way to treat a company with growing customer and online traffic, expanding margins, and an improved 2019 profit profile? TGT could have more room to run.
Year-to-date return: 34.7%
Current dividend yield: 3%
Altria Group (MO)
Tobacco giant Altria is one of those stereotypical "sin stocks," so it's certainly not for everybody. But the company behind brands like Marlboro, Black & Mild, Skoal and Copenhagen fits the mold of a traditional Big Tobacco stock: it's a cash cow with a relatively predictable business that pays an enormous dividend. Recently MO has seen the need to expand into new verticals with an investment in Canadian cannabis company Cronos Group and a $12 billion stake in e-cigarette leader Juul. Politics of its business aside, this $94 billion dividend stock is built to weather -- and perhaps even thrive -- during recessions.
YTD return: 3.6%
Dividend yield: 6.3%
CVS Health Corp. (CVS)
Next up, a company that not only quit selling smokes a couple years back, but actually has the word "health" in its name, only to underperform Altria by about 17% year-to-date. Unless you're fudging the accounting, Wall Street doesn't care about morality. CVS shares are having a tough year largely because 2018 didn't go that well -- a disappointing fourth-quarter earnings report in February sent shares plunging, and CVS piled on the bad news by issuing weak guidance at the same time. Both woes are tied to its $70 billion merger with Aetna, the health insurer and pharmacy benefits manager, in the fourth quarter of 2018.
YTD return: -13.7%
Dividend yield: 3.6%
Occidental Petroleum Corp. (OXY)
The reason the $39 billion Occidental Petroleum has been so off in 2019 is purely due to its incredibly ambitious $38 billion acquisition of Anadarko Petroleum (APC), giving the combined company impressive economies of scale in the roaring Permian Basin. But Occidental outbid Chevron Corp. (CVX) by $5 billion for the deal, using expensive financing from Warren Buffett to do so. If synergies and asset sales go as planned -- and commodities don't decline -- OXY should recover if investors are willing to wait. Wall Street seems to be worried that OXY overpaid, either for Anadarko or for the requisite leverage.
YTD return: -13.5%
Dividend yield: 6%
AbbVie is one of just three top 10 best dividend stocks to buy for 2019 that's down year-to-date. As with the previous underperformers, AbbVie's slump is directly related to a recent acquisition: June's announced $63 billion purchase of Botox-maker Allergan (AGN). AbbVie's Humira, the world's top-selling drug, definitely needs another hit product to help pick up the slack when its U.S. patent expires in 2023, but the 45% premium ABBV paid for Allergan may have been too hefty. That said, ABBV now trades for just 7.2 times forward earnings; even more cautious investors may prefer waiting for a clear price bottom before doubling down.
YTD return: -22.8%
Dividend yield: 6.3%
Intel Corp. (INTC)
Intel remains one of the best dividend stocks to buy for 2019 and beyond. This Dow 30 component won't blow your socks off with growth, but there's something to be said for a well-diversified, widely respected brand with a track record and an easily sustainable dividend. Intel, whose chips help power everything from personal computers, smartphones, data centers, and the broader internet of things, trades for about 11.7 times earnings. Given INTC's low growth, that seems reasonable. A payout ratio of 30% implies an extremely sustainable dividend. Apple (AAPL) is reportedly in talks to acquire Intel's smartphone modem business for around $1 billion.
YTD return: 10%
Dividend yield: 2.5%
Cincinnati Financial Corp. (CINF)
What many dividend investors look for, aside from a quarterly paycheck, is the regularity of that paycheck: stability and sustainability. In that vein, several of U.S. News' top dividend stocks have been growing payouts annually for 40 years or more, and property and casualty insurer Cincinnati Financial is no exception. Its 2.1% yield doesn't sound like much, but with a dividend growth streak of 58 years, you can count on it like clockwork, and a payout ratio of just 34% illustrates an enormous cushion for hard times.
YTD return: 39%
Dividend yield: 2.1%
Best Buy Co. (BBY)
Best Buy's increased commitment to online selling over the last decade has helped its outperformance in recent years, and even allowed it to pay a dividend (which has grown seven consecutive years). After a phenomenal turnaround, CEO Hubert Joly left in June, handing the reins to former CFO Corie Barry. With a fear-driven sell-off depressing BBY's price, readers who bought BBY when it made the best dividend stocks to buy for 2019 list are sitting pretty. Domestic comparable online sales growth hit 14.5% last quarter. BBY expects to spend $750 million to $1 billion on buybacks in the 2020 fiscal year.
YTD return: 44.5%
Dividend yield: 2.6%
Applied Materials (AMAT)
Shares of leading semiconductor equipment manufacturer Applied Materials were coming off a horrible 2018 when it was picked as a top dividend stock to buy for 2019. As the original write-up noted, "AMAT goes for just 8 times earnings, even though Wall Street expects earnings to grow nearly 17% annually over the next five years ... market sentiment has gotten so negative as to be unrealistic about AMAT's long-term prospects." Confidence in semiconductors returned this year, and AMAT stock promptly soared from those depressed levels, driven by both improving market sentiment and better-than-expected first-quarter earnings. The shift to 5G will also help AMAT in the long term.
YTD return: 54.8%
Dividend yield: 1.7%
Companhia Energetica de Minas Gerais (CIG)
Brazilian electric utility company Companhia Energetica de Minas Gerais, or Cemig, rounds up U.S. News' best dividend stocks to buy for 2019. Although arguably still the riskiest pick, Cemig has maintained the positive momentum that carried it into the New Year. Cemig's credit profile was upgraded several times heading into 2019 after replacing U.S. dollar-based debt with real-based debt and initiating currency hedges. Although CIG still has a B1 (non-investment grade) rating, Moody's noted in May that "Leverage has improved upon the payment of debt following asset sales and indemnification payments, and a more proactive liability management strategy has diminished short term liquidity risks."
YTD return: 11.3%
Dividend yield: 3.9%