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Is 3% an unambitious dividend yield target, when there are bigger ones out there? Well, I’m looking for relatively safe income stocks to buy for the very long term. And some of my favorites look super cheap.
security moat
National Network (LSE: NG.) has an expected return of 5%. Shares have fallen 10% in the last 12 months and it smacks of a buying opportunity.
Some investors are understandably nervous about the long-term future of gas distribution. And I see it as probably the main risk.
But gas will be replaced by electricity, right? That’s not going to stop, it’s just going to shift more and more to renewable sources. And National Grid has it fixed too.
If we look back at dividend history here, we see a record of progressive annual increases going back years.
And that’s the big draw for me. Yes, there will be risks ahead. But the best long-term dividend stocks are usually those with strong defensive moats. I see one of those on National Grid.
essentials
Before we examine even higher performance, here’s one that could be among the safest stocks ever. I’m talking about Unilever (LSE: ULVR), with a forecast of 3.6%.
Not one of the biggest returns. But it is in the region of FTSE 100long-term average of . And I rate the Unilever dividend as one of the most reliable.
The stock gained during the pandemic. Boosting sales of cleaning and hygiene products would not have done any harm. But since then, the price has pulled back a bit from the 2020 peaks.
I see another buying opportunity, especially with dividends well covered by earnings.
We are going through a tough economic time right now. And that’s going to mean less earnings clarity. So we could see some volatility in the stock price as a result. But Unilever is on my long-term shopping list.
Addictive
imperial marks (LSE: IMB) is the biggest, with a whopping 7% expected dividend. It comes after years of stock price weakness. Some may choose not to buy for ethical reasons, but I’m just looking at the investment angle here.
The stock has rallied a bit in the past 12 months. But the stocks are still rated low by the markets. Any further gains would eat away at that big dividend yield, so now could be a good time to buy.
The few bad years are probably due to a feeling that tobacco is disappearing as a product. I could be wrong and the industry could be destined to end.
But I’m just not seeing it. Much of the world still buys cigarettes by the billions, and premium brands continue to grow. And the movement toward new tobacco products is gathering momentum.
Analysts forecast earnings growth in the coming years. I see a dairy cow.
Verdict
All of these face their individual risks, which investors must assess for themselves. But I think these three could be a good start to a long-term dividend portfolio. And I rate them all cheap now.
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