This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

3 Big Dividend Plays to Make in September

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (InvestorPlace) -- August was agonizing, to say the least. The volatility-laden indices have scared the heck out of investors, and now everyone is asking the same question: "What am I supposed to buy now?"

Well, one option is to follow Warren Buffett into banking stocks. Buffett -- via Berkshire Hathaway (BRK.A) -- just plunked down $5 billion for a stake in Bank of America (BAC), which immediately forced investors to start looking at the industry.

I have respect for Buffett, but you shouldn't follow in his exact footsteps on this one. Buffett got a special preferred-stock deal on Bank of America that other investors can't get, boasting a great 6% dividend. You're better off picking other stocks than BofA -- but keeping the Oracle of Omaha's focus on plump dividend yields.

The best stocks with the strongest dividends right now are tobacco companies. While some people will take issue with investing in tobacco companies, you can't argue with the cash they are pouring out to investors.

Also see: Top 10 Dividend Stocks for September

Here are stocks you should buy this month:

Altria Group (MO) is the largest tobacco company in the United States, controlling about half of America's tobacco market. The company's most popular brand -- Marlboro -- has been the world's best-selling cigarette for almost four decades. Altria also is in the cigar and smokeless tobacco business, and it has interests in wine via its subsidiary Ste. Michelle Wine Estates, a fast-growing, top-10 premium wine producer. The company also has a 27% stake in the South African brewer SABMiller.

What led me to Altria was the 5.8% dividend and the steady rise in earnings -- this quarter's revenue knocked out consensus estimates of $4.4 billion. Net revenue for the cigarettes segment increased 2.1% year-over-year to $5.7 billion. Altria has outperformed the S&P 500 every year since 2000 and was ranked No. 1 in the 2010 Barron's 500, an annual list of the top-performing companies in the country. And the dividend is rock-solid. The company has increased its dividend 44 times in the past 42 years. This makes it a compelling buy right now.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs