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3 Hot Stocks for a Sideways Market

Now that the market is starting to slowly rotate away from aggressive growth stocks back to more defensive income and growth stocks, let's take a look at some specific examples. It is very important to note that I do not buy stocks just because they pay a good dividend. I want some growth along with my dividends. That eliminates duds like AT&T (T), Verizon (VZ), Merck (MRK), etc. that have not delivered any growth for over 10 years.

Let's begin with Textainer (TGH)

Data from Best Stocks Now App

In addition to an attractive 4.1% current yield, the stock has also delivered some very nice capital appreciation over the last three years. As you can see from the screen shot, Textainer has also entered into my top 100. I have not seen any such income and growth stock in my top 100 for a long time. In addition to this, Textainer had a nice earnings report on Tuesday and the stock is hitting new highs.

Let's next take a look at Tanger Factory Outlet (SKT)

As you can see, Tanger has delivered superior growth along with its current dividend yield of 2.6% over the last 1, 3, 5, and 10 years. Also note that the stock was up 4% during the 2008 market sell-off. Tanger is also hitting new highs and it has also recently entered into my top 200.

Okay, one more. Let's look at Avalonbay Communities (AVB). The company is flourishing in this new renter economy. It has also delivered superior capital appreciation along with its current dividend yield of 2.6% over the last 1, 3, 5, and 10 years.

Just because it looks like we may be entering into a sideways market does not mean that there will not be leading stocks. It is now time to be very vigilant on stocks that have had big runs, and look for new leaders that are starting to emerge.

Disclosure: At the time of publication, Bill Gunderson was long SKT and TGH.

--Follow me on Twitter @BillGunderson

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