If you are looking for a regular stream of income, you may want to consider dividend stocks. Dividend-paying stocks, usually from reputable companies, offer an excellent way to create a steady and solid stream of income that is better than that provided by low yielding treasury and fixed income alternatives. Below are a few stocks to consider in 2020
Waste Management (WM) Is One Of The Best Dividend Payment Stocks
The WM stock has been a performer in many ways over the past five years, managing to beat the S&P 500. The company’s shares have soared over 158% over the period when compared to S&P’s 53.4% gain.
Waste Management stock has also managed to perform well over several consecutive quarters. Also, at $15.3 billion, the company’s revenues are at an all-time high as per last quarter’s financials on a trailing 12-month (TTM) basis.
At $1.8 billion, the free cash flow is also at a record high on a TTM basis. But the net income has gone down from its all-time high recorded last year.
However, that has something to do with increased capital expenditures over the previous quarter.
Incredibly, the company is on a tear with improvements in all areas from the volume of the trash handled to the adjusted EBITDA.
According to the company’s management, the good run isn’t expected to end anytime soon.
If you factor in the growing population, which is only likely to produce more trash and weather-related disasters, which are also on the rise, both factors will benefit Waste Management and the NYSE: WM stock.
Now the company is expecting further growth, according to Jim Fish, CEO of Waste Management. Commenting on the second quarter financials, he said that the company was on track to achieve its full-year goals.
The company’s collection and disposal businesses were expected to continue to generate substantial earnings, which would upset any anticipated decline in its recycling business.
3M (NYSE: MMM)
3M is among the leading diversified companies that have consistently paid an annually increasing dividend for over six decades.
Apart from paying an uninterrupted dividend stock for more than ten decades, 3M Company has increased its dividend consecutively for more than six decades.
This makes MMM one of the best dividend stocks available.
Concerns About MMM Stock
MMM has clearly lost its sheen, and this is attributed to the increasing costs and tax rates, forex woes, high debts, and weakness in the generation of cash flow. Additionally, lower projections have had a significant negative impact on the company’s investment appeal.
3M Company delivered weaker-than-expected results in the last four quarters while beating estimates twice. In the previous quarter reported, its earnings surpassed the Zacks Consensus Estimate by 7.84%. The company’s average earnings surprise for the last four quarters was -1.41%.
Moreover, the MMM stock’s trend in the last 90 days shows that it has lost about 9% compared with the industry and S&P 500 declines of 5.7% and 1%, respectively.
One of the main reasons behind the company’s performance entails cost-related woes and cash flow weaknesses. 3M Company has been exposed to headwinds as a result of undue rise in the cost of sales due to higher raw material costs.
Zack’s Rating
Data from Zack’s proprietary indicates that the company is rated at Rank 3, and investors expect an inline return from the MMM shares relative to the market in the coming months.
Additionally, 3M Company has a VGM Score of D. The valuation metrics indicate that 3M Company is valued fairly. Its value Score of C is a clear indication that MMM is a neutral pick for value investors.
The financial health and growth prospects of the stock indicate the potential to perform in line with the market.
In our view, Waste Management (NYSE: WM) and 3M Co. (NYSE: MMM) represent two of the best dividend stocks to buy every investor should pay attention to this year.
