While the average market participant may sit back wondering whether dividends or growth is the better position for 2021 there is a third choice that investors should consider. Dividend-Growth stocks. Dividend-Growth stocks offer the best of both worlds by combining a dividend payment with an outlook for growth. The growth could come in the form of business expansion or acquisition, or it could come in the form of increasing distribution amounts. In either case, the opportunity for long-term gains is very high.
With the economic rebound well underway and another round of stimulus checks on the way, there is no reason to think that dividends won’t be increased in 2021. The trick is finding just the right dividend-growth stocks to fit your portfolio. The stocks I want to highlight today represent not only opportunities for dividend-growth but for high yields and diversification as well.
Juniper Networks, Inc Is An IT Infrastructure Play With 3.5% Yield
Juniper Networks (NYSE:JNPR) has a lot of things going for it that begin with its position as an IT infrastructure play and end with its safely growing 3.5% yield. Looking at Juniper from the business perspective, its position as a network infrastructure manufacturer and service provider makes it a fundamental part of the ongoing shift to digital. The shift that was accelerated by the pandemic and driving double-digit gains across the industry.
Looking at Juniper from the investment perspective, the stock offers a good value at 15X this year’s earnings while most other tech-related dividend stocks are well above the broad market average. Juniper Networks has only been paying a dividend for 7 years but the outlook for future payments is good. The company embarked on a cycle of distribution increases three years ago and is on track for a fourth during the calendar 1st quarter of 2021. The payout ratio is a very manageable 50% so there is ample room for another 5% increase and the balance sheet is a fortress.
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