Editor's Pick: Originally Published Tuesday, Dec. 22
The VIX Index is creeping higher as investor fear rises. 2015 is nearly over and 2016 promises to bring great uncertainty:
- 2016 Presidential election
- Continuing threats from ISIS
- Possibility of more rate increases
How can you prepare for instability and uncertainty? By investing in high quality, blue chip dividend stocks with shareholder friendly policies that have historically withstood the test of time.
All of the dividend stocks in this article have paid steady or increasing dividends for at least 25 years.
You shouldn't buy into a high quality business at any price. The 10 high quality businesses in this article are all trading at fair or better prices. They are ready for your purchase today -- in time for 2016.ADM data by YCharts
1. Archer-Daniels-Midland (ADM)
Archer-Daniels-Midland is the largest farm products corporation in the world. The company currently has a market cap over $20 billion. The company's success is built on a long corporate history. It has paid increasing dividends for 40 consecutive years.
Despite its long history of success, Archer-Daniels-Midland's share price is depressed. The company's stock has fallen over 30% in 2015.
Falling grain and corn prices are likely responsible for the stock's poor performance. The company's management has responded to low stock prices by repurchasing nearly 6% of shares outstanding over the last year alone. Share repurchases done when a stock is trading below fair value are especially beneficial for shareholders. It's like buying one dollar for seventy cents.
Archer-Daniels-Midland still has favorable growth prospects ahead. Crop prices are cyclical -- they are low now, but they will rise, depending on a variety of uncontrollable factors.
Archer-Daniels-Midland's management is slowly reducing the company's exposure to volatile crop prices by focusing on higher value products. The company's WILD Flavors acquisition and creation of the new WILD Flavors & Specialty Ingredients segment is a push toward higher margin products.
The long-term growth driver for ADM is increasing global food consumption. The global population is growing. More people means more mouths to feed and greater demand for commodity foods.
Archer-Daniels-Midland stock is currently trading for a price-to-earnings ratio of just 12.2. In addition, the stock offers investors an above-average dividend yield of 3.2%. Archer-Daniels-Midland's combination of high yield, low valuation, and favorable long-term growth prospects make it a favorite of The 8 Rules of Dividend Investing.