Earnings season can be one of the most profitable times of the year for traders. But it can also be one of the most painful if you’re on the wrong end of a trade.
But instead of chasing an earnings season pop, we’re bringing you the three best dividend stocks to buy for spectacular returns whether or not a stock goes up or down.
You see, many investors spend earnings season looking for that elusive earnings season rocket – that one stock that’s going to jump on better-than-expected earnings. But investors chasing these elusive gains can end up burned.
It doesn’t have to be that way…
It’s a common misconception that being successful in the stock market is completely dependent on buying stocks at lower prices and selling them at higher ones.
While this strategy will generate returns, there are plenty of downsides. Add in the cost of tax liabilities, brokerage fees, and the losses suffered from the occasional bad bet, and there’s a high chance of having a net loss in your portfolio.
On the other hand, dividend stocks are perfect for mitigating your losses and maximizing your profit potential.
In fact, according to a report from the Guinness Atkinson Fund, dividends gained from owning stock can account for up to 90% of your portfolio’s returns over time.
Let’s take a closer look at the benefits of dividend stocks, as well as the three best dividend stocks to buy for earnings season…
Hot Medical Stocks To Own Right Now: Royal Caribbean Cruises Ltd.(RCL)
To say I’m a fan of Royal Caribbean Cruises Ltd (NYSE:RCL) and its stock is an understatement. My wife and I got married on the Majesty of the Seas in 2005, and although we haven’t been on a cruise since, the company knows how to run its business.
Richard Fain, CEO of RCL for the last 29 years — a lengthy tenure for an S&P 500 CEO these days but well deserved — has managed to take the cruise operator to unbelievable heights.
“When Fain took the helm of the second-largest cruise operator in the world in 1988, RCL had revenue of $520 million. Since then its revenues have grown almost 9% per year over a 27-year period to $8.1 billion,” I wrote March 18, 2015. “It might not sound like much, but over such a long period it’s really quite significant.”
RCL stock is up 45% since being promoted to the S&P 500 in December 2014. With the recent launch of the Oasis of the Seas, the cruise line’s most exciting and energy-efficient boat yet, I see strong growth in the next three to five years as more people try cruising.
Hot Medical Stocks To Own Right Now: JetBlue Airways Corporation(JBLU)
Shares of JetBlue popped on Wednesday morning as the company inches closer to the release of its first quarter earnings report on April 24. Prior to this surge, JBLU stock had been down more than 11% over the last month. But JetBlue has earned five upward earnings estimate revisions within the last seven days, and the company’s revenues are expected to climb by nearly 10% to reach $1.76 billion.
Investors might be less pleased to note that JetBlue’s Q1 earnings are expected slip 12% from the year-ago period to hit $0.22 per share. With that said, the company is currently a Zacks Rank #3 (Hold) and boasts an Earnings ESP of 1.02%. This means that JetBlue looks poised to top Q1 earnings estimates.
Hot Medical Stocks To Own Right Now: MercadoLibre Inc.(MELI)
Mercadolibre is the leading e-commerce player in Latin America. Its primary moat comes from the network effect. As more and more customers flock to the company’s platform to buy things, vendors know that they have to list on the site to gain access to such a large base of buyers. At the same time, MercadoPago is introducing high switching costs thanks to the popularity of the service with unbanked customers in South America. And MercadoEnvios and select next-day delivery services are taking off thanks to the low-cost production afforded by Mercadolibre’s shipping facilities across the continent.
Hot Medical Stocks To Own Right Now: Vertex Pharmaceuticals Incorporated(VRTX)
Baseball legend Dizzy Dean once said, "It’s not bragging if you can do it." One company that doesn’t have to brag that it can beat Facebook’s returns is Vertex Pharmaceuticals. The biotech stock nearly doubled Facebook’s return last year and is performing significantly better than the social media giant so far in 2018, too.
Vertex currently enjoys a monopoly in treating cystic fibrosis (CF). Its drugs Kalydeco, Orkambi, and Symdeko correct malfunctions in the CFTR gene, which causes CF. Many CF patients have gene mutations that aren’t addressed by these three drugs, though. However, Vertex thinks it will have effective treatments for roughly 90% of all CF patients within the next few years.
The biotech plans to achieve this goal through triple-drug combinations. Vertex already has a couple of late-stage studies of one triple-drug combo under way and plans to start a late-stage study of another combo in the next few months. AbbVie and Galapagos are also developing a triple-drug combo to treat CF, but Vertex should have a significant first-mover advantage.
At a healthcare conference last month, Vertex CEO Jeff Leiden pointed out the company has a "problem": It’s accumulating cash very rapidly. Vertex intends to address this "problem" by investing in innovation, both internally and through business development deals. The biotech is using its money to develop treatments for 10 other indications. Only one or two of those pipeline programs need to succeed for Vertex to continue beating Facebook’s growth.