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4 Dividend Stocks to Add to Your Watchlist in December

If investors are looking for income and the potential for capital appreciation in a volatile market. they should consider dividend stocks. Here are four top stocks worth a look, Vodafone Group (VOD), Archers-Daniels-Midland Company (ADM), International Paper Company (IP), and Invesco (IVZ).

To say the stock market has been unpredictable this year would be a dramatic understatement. If you are hesitant to invest your hard-earned money in the market, you are not alone.

Though most people are anticipating a bull market in 2021 thanks to the arrival of a coronavirus vaccine, the bottom line is that no one can predict the future. There is a chance the vaccines won't work, or large parts of the population will refuse to get vaccinated. There is also a chance the economy won't be firing on all cylinders until 2022.

If you want the potential for capital appreciation that also pays income, consider dividend stocks. Here is a quick look at four dividend stocks every investor should keep an eye on Vodafone Group (VOD), Archers-Daniels-Midland Company (ADM), International Paper Company (IP), and Invesco (IVZ).

Vodafone Group (VOD)

It is not often you find a stock with a dividend of 5.81%. VOD is one such stock. VOD connects people across Europe and elsewhere through wireless and data services. The VOD POWR Ratings show the stock has an "A" grade in the Trade Grade component along with "B" grades in the Industry Rank, Buy & Hold Grade, and Peer Grade components. VOD is ranked in the top 10 out of 35 stocks in the Telecom - Foreign industry.

VOD has a fairly low forward P/E ratio of 16.96. Though VOD dipped below $12 in March from its prior trading level of $20, the stock climbed back to $18 this past summer, dipped once again, and bounced right back to $18 this month. According to the StockNews Price Targets, VOD has an average price target of $22.62, which indicates a potential upside of 32%.

Archer-Daniels-Midland Company (ADM)

If you are slightly hesitant to invest your money in a dividend stock amidst an uncertain economy and a potentially tumultuous future, consider scooping up dividend stocks in the food and beverage industry. For example, ADM, a producer of beverage and food ingredients, pays a dividend of 2.88%. ADM also participates in the manufacture, distribution, and sale of natural flavor ingredients, colors, health/nutrition products, soluble fiber, proteins, and more.

The ADM POWR Ratings are fantastic: "A" grades in the Buy & Hold Grade and Trade Grade components along with "B" grades in Industry Rank and Peer Grade. ADM is ranked second out of 27 stocks in the Agriculture industry. The average analyst price target for ADM is $53.29, indicating a potential upside of 5.63%.

ADM has a reasonable forward P/E ratio at 14.59. Risk-averse investors will find ADM a safer alternative than other stocks, particularly those in the tech sector that have been traded up to forward P/E ratios of 100+ in recent months.

International Paper Company (IP)

Investing in paper and packaging is another comparably conservative way to play the market. However, IP presents the opportunity to profit even if it stagnates, thanks to its 4.21% dividend. IP's manufacturing operations and markets extend from the United States to Asia, South America, and Europe.

The POWR Ratings reveal IP has "A" grades in the Industry Rank, Trade Grade, and Buy & Hold Grade components. Furthermore, IP is ranked first in the Industrial - Paper industry. Though IP suffered quite the tumble at the start of the pandemic, it has rallied, moving well beyond its pre-coronavirus price of $45. Add IP to your watchlist, buy it the next time it slides, and you will feel good about collecting the 4.21% dividend.

Invesco (IVZ)

Investing has been all the rage now that people are forced to remain at home and to quarantine until a vaccine is distributed to the masses. The public's infatuation with the stock market will likely hold strong even after society reopens simply because playing the market is addictive. IVZ stands to benefit from this phenomenon.

As a worldwide investment manager, IVZ facilitates the building of financial security. The POWR Ratings show IVZ has "A" grades in the Buy & Hold Grade and Trade Grade components. IVZ is ranked 6th in the Asset Management industry. IVZ has a forward P/E ratio slightly above 10, meaning it is likely undervalued. Furthermore, IVZ pays an attractive dividend of 3.44%. 

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VOD shares were trading at $17.95 per share on Wednesday morning, up $0.43 (+2.45%). Year-to-date, VOD has declined -4.30%, versus a 16.86% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.


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