The market’s new highs are making it tougher to find good buys, especially in the income stock area.
But take a look at big-name companies that, until the crash in 2008, had great records of paying dividends and long histories of growth and stability, but haven’t fully recovered from the crash. Not yet anyway. There are some great bargains.
Case in point, General Electric (NYSE: GE).
Here’s a stock that almost every owner holds for the dividend. Despite the fact that they had to reduce it by 68% during the crash, it has recovered very nicely. But, luckily for us, it’s not back to its former high. That’s where we can make some hay.
The payout is about two-thirds of the way back to its former high and yields about 3.3%.
The current dividend is up to $0.22 and was at $0.31 in 2008. It is expected to get back to its former payout level in about three years, which will drive the stock to about $40 from its current $27.
This is a AA- rated balance sheet whose valuation is right in line with the market multiple with a five-year growth estimate of about 8% to 9% a year.
Keep in mind, the types of investments we want to hold in retirement are not just big names with solid dividend histories with good growth prospects. We also want to buy them at bargain prices whenever possible.
GE fills every requirement for a Two-Minute investment that will help prevent us from waking up broke in our 80s.
And, as I said last week, most of us will live many years beyond what we now believe is possible – 100 is not out of the question. And it’s a long time between 80 and 100 if you’re broke.
GE and big-name solid stocks like it are perfect for those preparing for or already in retirement. Income, growth, stability and at a bargain price.