When it comes to picking long term dividend plays that you want to hold forever, I very much favor financials. These institutions tend to survive far longer than most other forms of business. Of course, that statement operates under the assumption that you’re taking good names, and not exposing yourself to highly leveraged endeavors. Here are two banks I deem as worthwhile long term dividend plays, as well as one real estate investment trust that I really like…
BNY Mellon (NYSE:BK)
In Warren Buffett’s play on banks, Berkshire Hathaway (NYSE:BRK.B) owns a significant position in the giant investment company. Involved in virtually every facet of financial services, BNY Mellon offers a strong case as a good move on dividends. Despite putting together strong earnings growth over the last few years, the stock has been caught in the mire of the markets, and has given up significant gains over the past year. The combination of a mixed first quarter, combined with the shift in sentiment regarding federal rates has put downward pressure on the stock. To me, it’s an opportunity for a long term investment. Yielding 3%, with a dividend growth rate of 15.21% over a three year period, BNY Mellon offers yield increases that exceed the industry average of 10.71%.
PNC Financial (NYSE:PNC)
Yielding 3.63%, PNC Financial has also outpaced the S&P 500 over the last three years. Sticking to prudent management, and successfully driving both interest and non interest income, PNC is an excellent pick for the long haul. With a 3 year dividend growth rate of 19.15%, the bank lags behind some peers, but still showcases strong growth. The yield itself also exceeds the industry average.
With a beautiful balance sheet that includes over $49 billion in total equity, an investment in PNC is an investment in assets. This isn’t necessarily a stock that’s going to rock your world with massive earnings growth rates. What you’re going to get here is a safe, strong play that will keep providing you with good yields for years to come, while holding shares in a well capitalized, low debt bank.
Also down this year, I view names like PNC Financial as good targets in a market that is still overvaluing many equities…
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