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Top 10 Gold Stocks To Own For 2019

 Retirees should favor companies that operate in stable industries and offer their shareholders a predictable stream of income. So which stocks in particular can fulfill their needs? We asked a team of Motley Fool contributors to weigh in, and they picked the following stocks.

Top 10 Gold Stocks To Own For 2019: Enbridge Inc(ENB)

Enbridge’s dividend yield has soared to a hefty 6.9%, thanks to a steep 20% drop in its share price so far this year. For the kind of growth potential that the Canadian energy infrastructure giant appears to possess, the stock has started to look like a bargain at current prices.

Enbridge is targeting 10% compound growth in dividends through 2020, backed by higher cash flows driven by restructuring and growth initiatives. Some of these include a potential divestment of non-core assets worth $10 billion Canadian dollars and development projects valued at nearly CA$48 billion in the foreseeable future.

If there’s one chink in the armor for Enbridge that has spooked investors, it’s the company’s heavy debt load that ran into almost CA$61 billion as of Dec. 31, 2017, the bulk of which was acquired with Spectra Energy. In the past couple of years, Enbridge also resorted to stock issues to raise capital that has diluted shareholders’ wealth, but that may soon be a thing of the past as management now is focused on monetizing non-core assets to fund its growth projects.

Enbridge’s cash flow from operations (CFO) hit multi-year highs last year, and although stock issues hit its CFO per share, the stock still is trading well below its five-year average price-to-CFO at 9.5 times. Given Enbridge’s dividend growth history of 23 consecutive years of dividend increases, it would need a heavy blow to the company’s business to break its dividend streak and disappoint income investors. That’s unlikely, given that almost 96% of Enbridge’s cash flows come from take-or-pay or regulated contracts.

Top 10 Gold Stocks To Own For 2019: PulteGroup, Inc.(PHM)

The technical chart of this $8 billion market cap builder mirrors that of Toll Brothers.

While the stock is off 12% this year, new orders have jumped, the backlog is soaring, and sales have grown double digits annually for the last four years.

Strong fundamentals make this stock a buy in the $29.00 per share zone with a target price of $41.00 per share and stops suggested at $26.93 per share.

Top 10 Gold Stocks To Own For 2019: Walker & Dunlop, Inc.(WD)

Walker & Dunlop claims a forward earnings multiple below 11. Like Micron, Walker & Dunlop operates in a cyclical industry — in this case, commercial real estate services and finance. 

The company primarily focuses on financing owners and operators of multifamily properties across the U.S. A serious slowdown in the economy would likely hurt Walker & Dunlop in several ways, including higher rates of defaults, fewer financing transactions, and lower price tags on deals made resulting from declining property values.  

But the U.S. economy still appears to be healthy. Walker & Dunlop’s business is doing better than ever before. Last year, the company reported its biggest jump in revenue, earnings, and total transaction volume since its initial public offering in 2011. Walker & Dunlop has increased its market share of the multifamily loan market from 2.8% seven years ago to 7.3% in 2017. 

Walker & Dunlop’s goal is to increase revenue by roughly 40% to $1 billion by 2020. That might seem overly ambitious, but I think the company can achieve its objective. Investors will also be paid as they wait for Walker & Dunlop’s growth: The company recently initiated a quarterly dividend. 

Top 10 Gold Stocks To Own For 2019: Microchip Technology Incorporated(MCHP)

This company is a huge Internet of Things benefactor. Microchip Technology Inc. (NASDAQ: MCHP) is a leading provider of microcontroller, mixed-signal, analog and flash-IP solutions, providing low-risk product development, lower total system cost and faster time to market for thousands of diverse customer applications worldwide.

The company recently received a receipt of antitrust clearance in the United States for the proposed acquisition of Microsemi. The company now expects to complete the acquisition of the company in June of this year.

Microchip investors are paid a 1.71% dividend. Merrill Lynch has set its price target at $110. The consensus price objective was last seen at $111.56, and the stock ended last week at $85.68 a share.

Top 10 Gold Stocks To Own For 2019: Berkshire Hathaway Inc. (BRK-B)

I’ve said many times before that if I could only own one stock in my portfolio, Berkshire Hathaway would be it.  

Berkshire is actually a conglomerate of more than 60 businesses, with massive operations in insurance (GEICO, General Re), railroads (BNSF), real estate (Berkshire Hathaway Home Service), consumer goods (Duracell), and more. The company also has a closely followed stock portfolio worth nearly $200 billion that includes large positions in Apple, Bank of America, Coca-Cola, American Express, and dozens of other stocks. 

Berkshire’s business model is simple yet effective. Its businesses and stock investments generate capital, which can then be used to acquire additional businesses and to make more investments. And who is picking those investments? Legendary investors Warren Buffett, Charlie Munger, and Berkshire’s two other investment managers who will eventually take their place.  

While Berkshire is an excellent stock to buy anytime, now could be an especially smart time to consider Berkshire. After ending 2017 with more than $116 million in cash, and Buffett and Munger visibly frustrated over the lack of attractive ways to deploy its capital, the company’s cash balance went down during the first quarter for the first time in a while. In short, it looks like Berkshire is starting to have some success with deploying its capital, so it could be a smart time to get in before Berkshire figures out how to put even more of its cash to work and boosts its profit potential by billions. 

Top Bank Stocks To Watch Right Now

Two key goals in retirement are to generate safe income and preserve capital. No one wants to outlive their nest egg.

Dividend-paying stocks are a popular asset class used to generate predictable, growing income. However, unlike the interest income paid by government-backed Treasury bonds, a common stock dividend can be far more discretionary in nature. When times get tough, a business will typically opt to reduce its dividend before jeopardizing its ability to meet its debt obligations, preserve its credit rating or invest in its long-term growth projects.

Unfortunately, a number of businesses are facing the tough decision to reduce their dividend at any one moment.

To alert investors of stocks that have the highest risk of reducing their current dividend in the future, Simply Safe Dividends created a Dividend Safety Score system that analyzes a company’s payout ratios, debt levels, recession performance, cash flow generation, recent earnings performance, dividend longevity and more.

Dividend Safety Scores are available for thousands of stocks, and scores range from 0 to 100. A score of 50 represents a borderline safe payout, but conservative investors are best off sticking with companies that score over 60 for Dividend Safety.

Investors can learn more about Dividend Safety Scores and view their real-time track record here(since inception they have flagged 99% of dividend cuts in advance).

I used Dividend Safety Scores to identify seven companies that have either recently cut their dividend and remain in trouble, or that could be facing a dividend cut in the near future. Owning companies like these can hurt a conservative retirement portfolio.

Top Bank Stocks To Watch Right Now: Pfizer, Inc.(PFE)

Investors have been waiting for Pfizer’s new drugs to finally offset declining demand for Lipitor, and this could be the year in which their patience is rewarded.

Pfizer finished 2017 with solid momentum that includes a return to organic growth and full-year EPS of $2.65, up 11% from 2016. The company’s forecast for 2018 is for revenue growth of 4% and EPS growth that matches last year’s 11% improvement. If it can hit those targets, it will be the first year of non-organic revenue growth at the company since Lipitor lost patent protection in 2011.

Driving the company’s improving outlook is a slate of important drugs, including the breast cancer drug Ibrance, the autoimmune-disease drug Xeljanz, the prostate cancer drug Xtandi, and the anticoagulant, Eliquis. In 2017, increasing demand for those drugs resulted in an 8% increase in sales at Pfizer’s innovative-health segment.

A return to growth would be great news for income investors because Pfizer already yields a market-beating 3.8%. If its sales growth accelerates, then operating leverage will give it additional wiggle room to boost its dividend payout. 

Top Bank Stocks To Watch Right Now: Enbridge Inc(ENB)

Canadian energy infrastructure giant Enbridge (NYSE:ENB) has lost nearly a quarter of its value over the past year, and currently sells for just nine times cash flow, well below the peer group average of nearly 12 times 2018 cash flow. That sell-off also pushed its fast-growing dividend up to a 6.7% yield, which is the highest it has been since the early 1990’s.

The plunge doesn’t make much sense because Enbridge recently completed a needle-moving merger and has a massive backlog of expansion projects underway. These growth initiatives should enable the company to grow cash flow per share at a 10% annual pace through 2020, which positions it to raise its payout at a similar rate. That combination of a high current yield that Enbridge expects to grow at a high rate could fuel top-tier total returns for investors in the coming years as its valuation reverts closer to the peer group average.

Top Bank Stocks To Watch Right Now: Apple Inc.(AAPL)

Some investors claim that Apple’s high-growth days are over. Yet the tech giant posted accelerating double-digit sales growth over the past three quarters, and analysts expect its revenue to rise 14% this year. Apple’s earnings are also expected to climb 24% this year.

Those are remarkable growth figures for a stock that trades at less than 16 times this year’s earnings. Moreover, Apple pays a forward dividend yield of 1.4%, and it has hiked that payout annually for five straight years. It also recently announced a new $100 billion buyback — which is enough to repurchase over 10% of its outstanding shares at current prices.

Apple still depends heavily on the iPhone, which generated 62% of its sales last quarter. But its services revenue — from Apple Pay, Apple Music, iTunes, its App Store, and other services — also jumped 31% annually during the quarter and accounted for 15% of its top line. Apple also stated that its paid subscriber base grew by 100 million in the last year to 270 million.

Millennials sitting on a floor using their smartphones and tablets.

IMAGE SOURCE: GETTY IMAGES.

That massive user base gives Apple the foundation to launch a wide variety of new services for adjacent markets — like streaming video, online news, and healthcare — to lock in users and reduce its dependence on hardware sales. That’s an advantage none of its smartphone rivals can match.

As I’ve said before, investors should think of Apple as a consumer goods company instead of a tech one. By comparing Apple’s valuations to other consumer goods companies, it’s easy to see how undervalued this stellar growth stock is.

Top Bank Stocks To Watch Right Now: Kinross Gold Corporation(KGC)

Despite 2018 setting up as the year to acquire gold stocks, no sector is immune from market irrationality. Case in point is Kinross Gold Corporation (USA) (NYSE:KGC). Just recently, KGC stock absorbed a painful body blow thanks to the White House imposing new Russian sanctions. Kinross will receive 20% of its precious metals production from Russia.

On surface level, KGC volatility appears to make sense. Like every other gold miner, Kinross is fighting back after several frustrating years. It simply can’t afford a 20% production disruption.

However, we shouldn’t forget that KGC is a Canadian company. Yes, Canada has sometimes earned a reputation as the U.S. lackey. However, it’s obvious that Russia’s Vladimir Putin has an issue with American dominance in geopolitical affairs.

Kinross disputes that the fresh sanctions have negatively impacted the company. They report that Russian operations are running as previously scheduled. Of course, they would say that, but I don’t see an upside for the Russians to punish a Canadian miner. Russia’s economy isn’t exactly a shining beacon, and they’ll be hurting themselves unnecessarily.

Thus, I think the extreme selloff in KGC stock is a contrarian opportunity. Furthermore, management has really cleaned out their cost of goods sold, as well as their operating expenses. The end result is a company that is finally profitable.

This latest news is nothing more than irrational drama. Feel free to put KGC in your gold stocks to buy list.