As the stock market continued to tumble on Monday, Feb. 5, investing in companies with strong fundamentals that pay dividends sounds like good news. Those are Kroger Co (KR) , Costco Wholesale Corporation (COST) Home Depot Inc (HD) and Lowe's Companies Inc. (LOW) , Greg Melich, a partner at MoffettNathson LLC, told TheStreet on Monday.
"These are the ones that have nice dividends that are likely to go up over time," Melich said, noting that all four have a buy rating from the firm. "We like the home improvement retailers. HD is up 2% year to date, in line with market, and Lowe's is up over 10%"
At market close, all four stocks had taken a beating: Costco shares, by more than 4%, to $182.77; Kroger, down nearly 3%, trading at $28.48; Home Depot, by over 5%, to $183.13; Lowe's, down nearly 4%, to $97.58.
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Costco announced on Jan. 30 a quarterly dividend of 50 cents per share, payable on March 2.
On Jan. 19, Kroger declared a quarterly dividend of 12.5 cents per share to be paid on March 1. According to a press release, the grocer's quarterly dividend has grown at a compound annual rate of 13% since it reinstated the dividend a dozen years ago.
Marking the 123rd straight quarter Home Depot has paid a cash dividend, the home repair retailer announced on Nov. 16 a third-quarter cash dividend of 89 cents per share, payable on Dec. 14.
Home Depot's direct rival Lowe's declared on Nov. 10, a 41 cents per share dividend, payable February 7, 2018, to shareholders of record as of January 24, 2018.
Melich said the firm considers companies like grocers and home repair retailers for which the fourth quarter isn't crucial, as it is for clothing retailers, like Macy's Inc. (M) and Nordstrom, Inc. (JWN) .
In related news, The Deal, TheStreet's sister publication, reported that Kroger sold its convenience store business to British retailer EG Group for $2.15 billion, the grocer announced on Monday. Its convenience store includes 784 stores and generated $4 billion in revenue in 2016. The sale is expected to close the first quarter of Kroger's fiscal 2018. The grocer said it will use proceeds for stock buybacks and to lower its debt.
In these markets, be sure to watch Morning Jolt hosted by TheStreet's Executive Editor Brian Sozzi and Sr. Correspondent Scott Gamm.
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