Dividend Stocks Likely to Outperform

For investors, this means dividend stocks will be some of the best performers in the years ahead. And for those planning for retirement, there are some excellent stock choices in this space that can still be found at attractive valuations. "As always, it is important to look for yields that are sustainable and tied to companies with solid fundamentals," said Sam Kikla, markets analyst at BestCredit. "If choosing dividend stocks was as easy as looking at yields alone, everyone would have a 5-star portfolio." But as long as you select strong dividend payers with share price returns that are at least in the upper single-digits, you can structure an investment portfolio that can carry you through periods of negligible market returns or enhanced price volatility.

Here, we will look at 3 companies (two large-caps, one small-cap) with a strong cash flow history and the ability to maintain stable stock values even during bear-market downturns. One common theme that should be seen in this list is the fact that these companies are well-managed and produce essential products. These stocks offer investors the opportunity to generate long-term gains, reduce risk, and avoid external market shocks in structuring a portfolio that can support you into retirement: Johnson & Johnson (JNJ), Exxon Mobil (XOM) and Prospect Capital (PSEC).

Source: Guru Focus

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