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10 Dividend Stocks to Weather Bad Economy

BOSTON ( TheStreet) -- The sailing adage "any port in a storm" might apply to dividend-paying stocks as economic growth slows.

They're a good place to anchor up while the economy sorts itself out. The stocks offer strong returns via dividends as well as the potential for share-price appreciation.

While they can't guarantee you won't have losses, dividend stocks can help limit them. Plus, a steady dividend is indicative of a company with growing earnings.

Dividend stocks are more attractive than ever. The U.S. economy produced only 54,000 jobs last month, more than 100,000 less than forecast by most economists, according to a government report today. That's as the housing industry falls into a deeper slump, and consumers rein in spending. U.S. benchmark equity indices today fell to their lowest closing levels since March.

Still, some shares may outperform indices including the Dow Jones Industrail Average and the S&P 500 Index. Here are 10 stocks that could be your safe harbor:

1. Healthcare Services Group (HCSG - Get Report), through its subsidiaries, provides housekeeping, laundry, linen, facility maintenance, and food services to nursing and retirement homes, as well as rehabilitation centers and hospitals.

Its shares, which have a projected yield of 3.85% on its current price of $16.14, have gained 2.6% this year and 24% over the past 12 months.

2. BlackRock (BLK - Get Report), with more than $3.5 trillion in assets under management, is the largest asset manager in the world. Its institutional clients account for more than two-thirds of the firm's assets under management.

BlackRock's shares, which have a projected 2.76% dividend yield based on its current price of $194.87, have gained 5.4% this year and 24% over the past 12 months. The company has a $38 billion market value.

3. Walgreen (WAG), one of the largest U.S. retail drug chains with over 8,000 stores, has a product base that's largely unaffected by changes in consumer habits as prescription drugs account for more than two-thirds of its sales.

Walgreen has paid a dividend for 78 consecutive years and has raised it for 35 consecutive years. The company has increased its dividend by a compound annual growth rate of 24.3% over the past six years.

Its shares, which have a projected yield of 1.62%, have gained 12% this year and 37.5% over the past year. Walgreen has a market value of $40 billion.

4. Frontier Communications (FTR - Get Report) serves about 2.1 million phone-line and 650,000 high-speed-Internet-access customers under the Frontier brand in 24 states. It is set to merge with a business to be spun out of Verizon (VZ - Get Report) that serves about 4 million phone lines.

Its shares, which have a projected yield of 8.6%, based on its current price of $8.64, are down 9% this year, but up 16.5% over the past 12 months.

5. INVESCO Mortgage Capital (IVR - Get Report) is a real estate investment trust that acquires, finances, and manages residential and commercial mortgage-backed securities and mortgage loans.

Its shares, which have a projected yield of 17.7% based on its current share price of $22.25, are up 8% this year and 26% over the past 12 months. Its market value is $1.6 billion.

6. Kimberly-Clark (KMB - Get Report) is known for its health and hygiene product line, including bathroom tissues, diapers, feminine products, and paper towels under the brand names Kleenex, Scott, Huggies, Pull-Ups and Kotex.

Its shares, which have a projected dividend yield of 4.19% on its current $65.75 share price, have gained 7.2% this year and 12.8% over the past 12 months.

7. French oil giant Total (TOT) ranks among the top 10 publicly traded integrated oil companies, and its efforts to explore for and develop new oil and gas fields should continue to pay off in the future.

Its shares, which have a projected yield of 4.77% on its current share price of $55.80, are up 7.6% this year and 25% over the past 12 months. The company has a market value of $131 billion.

8. For investors seeking income first and share appreciation second, there is CreXus Investment (CXS), a commercial real estate finance company. It acquires and finances commercial mortgage loans and other commercial real estate debt.

Its shares, which have a projected yield of 8.34% on its current price of $10.95, have lost 14% this year and 8.8% over the past 12 months. The company has a market value of $845 million.

The $4.3 billion Wells Fargo Advantage Small-Cap Value Fund (SSMVX) owns 23% of its shares.

9. El Paso Pipeline Partners (EPB) is an El Paso, Texas-based master limited partnership with interests in interstate gas pipelines and storage facilities. It owns 100% of the 700-mile Wyoming Interstate pipeline and holds a 58% interest in the Colorado Interstate Gas pipeline.

Its shares have a projected yield of 5.4% on its current price of $33.89. Those shares are up 4% this year and 33% over the past 12 months.

10. Vector Group (VGR) is a U.S.-based cigarette manufacturer and its product line includes discount, generic brands. It also produces cigarettes in Russia. Recently, the company launched Quest, which it claims is a genetically engineered nicotine-free cigarette.

Its shares, which have a projected yield of 8.5% based on its share price of $18.60, are up 10.5% this year and 33% over the past 12 months. The shares have a market value of $1.4 billion.

>>To see these stocks in action, visit the 10 Dividend Stocks to Weather Bad Economy portfolio on Stockpickr.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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SYM TRADE IT LAST %CHG
WAG $81.65 2.05%
BLK $376.42 0.00%
FTR $7.95 0.00%
HCSG $33.32 0.00%
KMB $110.41 0.00%

Markets

DOW 18,288.63 +155.93 0.86%
S&P 500 2,117.39 +12.89 0.61%
NASDAQ 5,008.0960 +44.5690 0.90%

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