hey guys it's Adrian here the Canadian in a t-shirt and today in honor of the
4th of July I'll be breaking down the best us dividend stocks to invest in
2020 during the current market crash and beyond in this video I'm only going to
be talking about dividend stocks in the United States in fact all the stocks in
this video are traded on the New York Stock Exchange I've already made a few
videos of my favorite Canadian dividend stocks so check those out as well I
picked these stocks because they all pay a generous dividend they have a long
history of increasing their dividends they are staples of the economy so they
will continue to earn money even during a market crash and recession and I
picked these stocks from different industries giving you a diversified
portfolio of the US market these are stocks that you can hold onto for life
and collect that passive income every quarter and you can expect these
dividends to increase year after year and now is an especially great time to
buy these stocks at a significant discount make sure you check out my last
video on how to invest during a stock market crash so click the pop-up at the
top right to check out that video first before you jump into investing basically
now is not the time to panic and sell stocks it is an incredible opportunity
to buy these top-quality stocks at a huge discount but before you put a
single dollar in the stock market right now make sure you have enough saved up
in your emergency fund especially if you're worried about having your income
reduced or even losing your job in these next few months also in this video I'm
gonna be breaking down exactly why I think these stocks are great choices so
I'll be talking about things like dividends versus capital appreciation
the payout ratio and the amount required to qualify for a DRIP if you need a
refresher on these basics of dividends then click the pop-up at the top right
to check out my playlist the dividend investing guide so watch those videos
first and then come back to this video so without further ado let's jump into
the best u.s. dividend stocks to buy in 2020 let's start with an industry which
always performs well even during a recession and that's utilities my
favorite utility stock in the u.s. is Duke Energy ticker symbol DUK. Duke is
one of the largest utility companies in the United States and they provide the
transmission and distribution of electricity and natural gas to millions
of homes and buildings this is a great dividend player because no matter what
is happening in the world whether it's an economic boom
or a recession people will always need their electricity and gas so a company
like Duke will always be profitable and will continue to pay consistent and
increasing dividends year after year Duke sells most of its energy out as
regulated long term contracts so it has guaranteed locked in revenue for years
to come and with that you can count on its dividend Duke is currently paying a
great dividend of four point six two percent paid out every quarter the price
of Duke stock dropped quite a bit by around 20 percent since March so you can
buy it for a great discount and even when its price returns to normal
Duke still pays out a great dividend yield of around four percent one of the
best things about Duke Energy is its consistency this company has been around
for over a hundred years and with this long-term contracts you can count on
that passive income through its dividends even with such a high dividend
Duke still has a solid payout ratio of 73 percent which is significantly lower
than a lot of the other big utility stocks that means that only 73 percent
of its profits go out to investors leaving 27 percent of its net income to
reinvest in itself and grow that money is going towards expanding as operations
but also to grow its renewable energy division in solar and wind power
this means that Duke can definitely sustain its current dividend and even
afford to increase its dividend in fact Duke Energy has increased its dividend
every single year for the past ten years which is exactly what you want out of a
long-term difference stock especially during a market crash also because of
the reduced share price it's now easier than ever to qualify for a DRIP with
Duke Energy remember a DRIP allows you to reinvest your dividend and use it to
buy an extra share of a company rather than receiving it as cash and the best
part is you don't pay any Commission's at all when you use a DRIP to buy extra
shares this is the best way to invest in the long term allowing your dividends to
compound automatically giving you true exponential growth in the case of Duke
you only need seven thousand one hundred dollars right now to qualify for a DRIP
let's go through the math with the dividend yield of four point six two
percent our seventy one hundred dollar investment would give us three hundred
and twenty eight dollars a year in dividends or eighty two dollars every
quarter Duke currently has a share price of $81 and 84 cents so every three
months our dividends will allow us to purchase a new share of Duke for free
and then receive the remaining 16 cents as cash
remember this DRIP amount of $7100 is lower than usual because the share price of Duke is
so low right now once Dukes stock recovers and returns to its normal price
the amount required to qualify for a DRIP will also increase to find out how
I calculated this number click the pop-up at the top right to check out my
DRIP video where I go over the long-term benefits of drips and I provide a useful
Excel spreadsheet that you can use to calculate the DRIP amount for any stock
looking at the stock chart of Duke Energy over the past 10 years you can
see an overall upward trajectory with noticeable drops every few years but
after every drop Duke is able to fully recover in a matter of months with most
utility stocks I'm not expecting to see phenomenal capital appreciation but with
Duke it's nice to see an overall upward trend all while collecting those
reliable dividends every step along the way and number two we have a company
which needs no introduction coca-cola with the ticker symbol KO coca-cola is
one of the largest companies in the world and they own one of the most
iconic and valuable brands of all time Coke has been by far the most popular
beverage in the world for over a hundred and thirty years this is the definition
of a consumer staple this is a product which will always be in demand in good
times or bad in summer or winter all around the world humans consume two
billion servings of coke products every single day it's hard to think of a brand
more dominant or untouchable than coca-cola but what about changing
consumer preferences or the movement towards healthier options? Well they sell
way more than just coke and Diet Coke coca-cola owns over 500 brands of
beverages including sprite Fanta Dasani smart water Minute Maid orange juice
vitamin water coffee Powerade the list goes on and on all of these drinks are
sold in grocery stores all around the world and on top of that Coke has
contracts with countless restaurants including McDonald's which is a great
dividend stock in its own right in the short term coke's revenue from these
restaurants are taking a hit which is why its stock price has dropped recently
but it's still incredibly profitable from the grocery store sales which are
open for business coke is currently paying a great dividend of three point
six five percent paid out every quarter the price of coke stock dropped by
around 25 percent since March so now is an excellent opportunity to buy the
stock at a huge discount and take advantage of that
increased yield once the stock price returns to normal its dividend yield
will usually hover around the three point two percent range even with a
higher dividend coca-cola still has a solid payout ratio of 69 percent that
means the only 69 percent of its profits go out as dividends leaving it with 31
percent of its net income to grow as a company coke does this by acquiring new
brands like Costa coffee and more recently by reshaping its bottling
operations to significantly reduce costs with the safe payout ratio coke can
definitely sustain its dividend and continue to increase its dividend year
after year coca-cola has actually increased its dividend every single year
for the past 57 years making it a dividend King a common dividend strategy
is to invest in dividend aristocrats those are companies which have increased
their dividend for 25 consecutive years a dividend King is one step further you
would have to increase your dividend every single year for 50 years straight
that's incredible and very very rare in fact there are only 28 dividend Kings
right now and coca-cola is one of them so how much do you need to invest in
Coke to qualify for a DRIP? With a share price of $45 and a dividend yield
of 3.6 5% you'll need about 5,000 dollars invested to qualify for a DRIP
let's check it out the 3.6 5 percent yield will give you a hundred and eighty
two dollars a year in dividends or forty five to sixty two every quarter that's
enough to buy yourself a free share of coca-cola every three months without
paying any Commission remember once its share price returns to normal you'll
have to invest even more to qualify for a DRIP looking at the stock chart over
the past ten years you can see a consistent upward climb sure there are a
few fluctuations but it always recovers and reaches a new peak in a matter of
months this is a stock that you can hold for twenty or thirty years and then sell
it for reliable capital gains all while collecting that passive income year
after year and number three let's move on to the industrial sector with another
dividend King the 3M company ticker symbol MMM. 3M is a manufacturing
powerhouse with a massive lineup of products including automotive equipment
electronics traffic lights building materials medical equipment and even
stationary products like post-it notes and scotch tape notably they're also a
huge producer of personal protective equipment
like face masks so their products are always in high demand especially in
times like these it's astounding just how diversified 3m is with their product
lines and they have been a market leader for so long and in so many sectors that
this company will always be profitable and so you can always rely on them to
pay out a generous dividend and to increase their dividend year after year
3m is currently paying out a dividend yield of 3.75 percent paid out every
quarter with the drop in stock price this is one of the highest dividend
yield that this company has ever had so I am definitely taking advantage of this
discounted price even with this high yield 3m still has a solid payout ratio
of 68% so they pay out 68% of its profits to you through dividends and
they keep 32% to grow through researching new product lines or
acquiring new brands with a low payout ratio and reliable profits 3m is able to
increase their dividend every single year for 61 years straight
this 61 year streak puts 3m in the top 10 list of dividend kings even ahead of
coca-cola that's amazing and that's exactly what you want out of a dividend
stock unlike the previous two stocks in this list 3m has a pretty high share
price of a hundred and fifty seven dollars and because of that it's really
difficult to qualify for a DRIP to get a DRIP you'll need to invest sixteen
thousand seven hundred and fifty dollars in 3m stock that's a lot of money let's
go through the math with a dividend yield of 3.75 percent that gives you six
hundred and twenty eight dollars a year in dividends or a hundred and fifty
seven dollars every quarter that's enough to buy yourself a free share
every three months don't worry this doesn't mean that you need sixteen
thousand dollars to invest in 3m it's just that you won't be able to get a
DRIP but you can still collect those dividends and reinvest them in other
stocks or ETFs looking at the stock chart over the past 20 years you can see
a pretty consistent upward trend with one big exception the stock price peaked
in 2018 and then fell this was due to litigation involving two of its products
but with this enormous range of essential product lines I have no doubt
that 3m will recover soon and in the meantime I am happy to collect those
increasing dividends and to buy more stock at this huge discount I should
note that for all the stocks in this video you should hold them in your tax
sheltered account to avoid paying taxes on the dividends and
the capital gains when you sell for the Canadians out there hold these stocks in
your RRSP not in your TFSA holding these stocks in your TFSA will protect you
from Canadian taxes you won't pay any taxes on your capital gains and you
won't pay any Canadian taxes on your dividends but you will be charged a 15%
u.s. withholding tax on these dividends because they're coming from American
companies the only way to avoid this u.s. withholding tax is to hold these US
stocks in your RRSP account so for these stocks and other high-yield
US dividend stocks and ETFs make sure you hold them in your RRSP account to
avoid all taxes I go into more details on this 15% u.s. withholding tax in my
TFSA and RRSP videos so check those out and for my American audience hold
these dividend stocks in a tax sheltered account like a Roth IRA and at
number four we have an absolute legend of the stock market the Procter & Gamble
Company ticker symbol PG Procter & Gamble is a historic dividend King and
for me it is the absolute definition of a dividend growth stock in fact Procter
& Gamble is the first stock I ever bought I've never sold it and I will
hold on to the stock for the rest of my life it's that secure Procter & Gamble
sells consumer staples products that people use and need every day no matter
what that's why they're so reliable they have a massive lineup of products from
cleaning products hygiene baby care home care and you use these products every
day even during quarantine things like laundry detergent toothpaste shampoo
deodorant diapers and toilet paper even if you don't know the name Procter &
Gamble you know these brands Tide Bounty Old Spice Tampax
Crest Swiffer head & shoulders and the list goes on and on no matter what is
happening in the world and good times or bad people need these products every
single day so this company will always have consistent and reliable income and
that's why they're always profitable they always pay a dividend and they
always increase their dividend year after year Procter & Gamble is currently
paying out a dividend yield of 2.62% paid out every quarter the best thing
about Procter and Gamble is their consistency they are able to maintain
this dividend with a payout ratio of 68% again this means that 68% of his profits
go out to investors leaving it with 32% of its net income to
develop new products and acquire new brands talking about consistency Procter
gamble has been around for over 180 years and they have
never missed a dividend payment in over 130 years even through
the world wars and the Great Depression on top of that Procter & Gamble has
increased their dividend every single year for sixty three years in a row that
63 year streak makes them tied for number three of the longest-running
dividend kings even ahead of 3m and Coke that's phenomenal
similar to 3m, Procter & Gamble has a large share price of a hundred and
twenty dollars so it takes a lot of money to qualify for a DRIP in fact
you'll need to invest at least eighteen thousand three hundred and fifty dollars
to qualify for a DRIP with a dividend yield of two point sixty percent that
amount invested would give you four hundred eighty dollars a year and
dividends or $120 every quarter enough to get you a free share every three
months don't worry about trying to reach this DRIP amount invest what you can and
collect those dividends as cash and reinvest them in other stocks or ETFs
looking at the stock chart over the past 20 years you can see a remarkably
consistent upward trend whenever it does drop it's able to fully recover in a
matter of months and continue to climb for me Procter & Gamble is the poster
child of a dividend growth stock it pays a respectable and reliable dividend
every three months but it also continuously appreciates in value
year after year even during a market crash if you hold the stock for twenty
years you'll be able to sell it for huge capital gains all while collecting that
passive income every step along the way if you're not sure how to actually buy
these stocks click the pop-up at the top right to check out my Questrade
tutorial on how to buy US stocks as a Canadian you're buying US stocks so
you'll need to buy them in US dollars and if you're investing more than two
thousand dollars at once I suggest using Norbert's gambit to avoid paying
currency conversion fees you can use Norbert's gambit to convert canadian
dollars into US dollars or vice-versa without paying any conversion fees this
technique can save you a ton of money so check out my video for step by step
guide on how to do it and if you'd like to get started with Questrade which is
my favorite online broker click my referral link in the box below and
you'll get $50 in Commission free trade rebates for the first 30 days when you
sign up that basically means that your first 10 stock trades will
commission-free that saves you $50 plus I'll get a small referral bonus as well
Questrade is only available in Canada so for the Americans out there I would
suggest a platform like Webull which is only available in the United States
Webull is a great platform which doesn't charge you any Commission fees on stocks
ETFs or options so you really have nothing to lose and when you open an
account they'll give you a free stock to start off but if you sign up with my
referral link below you'll earn an additional free stock worth at least $12
as long as you make an initial deposit of $100 or more Plus I'll get a small
referral bonus so there you have it those are my top four best u.s.
different stocks to invest in 2020 especially during this market crash Duke
Energy is a utility stock with a high yield and selling at a great discount
coca-cola is a dividend King selling at a huge discount and can qualify for a
DRIP with only a small amount invested 3m is an industrial stock incredibly
diversified and one of the longest running dividend kings and Procter &
Gamble is a consumer staple dividend King with a perfect combination of
passive income and capital growth potential thanks for watching guys and
be sure to LIKE comment and subscribe if you found this video helpful every
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box below or click the links on my home page be sure to tune into my next video on
the RESP the registered education savings plan to learn how to invest in
an RESP and how to maximize the benefits for your child thanks everyone and I'll
see you guys on the next episode of the Canadian in a t-shirt bye guys