pfizer vaccine – – Tradingsim

Though they may seem inconsequential to some investors, dividend stocks are pivotal to building a portfolio to increase wealth despite the previous bear market in this economy changed by the coronavirus. This TradingSim article will help investors find the best dividend stocks of 2020 to buy and hold in order to rebalance their portfolios. This article will also help investors determine the best stocks to help them improve their investment strategies.

What are dividend stocks?

Dividend stocks are shares from corporations that offer extra payouts every quarter to investors. With many dividend stocks, investors can purchase low-risk value stocks. With companies giving dividends, corporations pay investors in shares instead of cash.

How are dividend stocks beneficial to investors?

Because they offer tax benefits, corporations that offer dividends are beneficial to investors. With corporations offering dividends, the IRS doesn’t usually collect capital gains taxes. The IRS doesn’t collect capital gains taxes unless investors sell the shares at a profit. In addition to that tax advantage, corporations with dividends have special tax perks.

If an investor buys stock before the reinvestment date, there is a benefit. That benefit increases if investors keep the stock for 60 days. If an investor holds a stock for two months or longer, the IRS treats the dividend as a qualified dividend. In that case, the IRS taxes the dividends at low tax rates between 5-15%.

If investors are looking for the best stocks that offer dividends, here are 10 of the top choices for investors.

1. AT&T

AT&T is one of the best dividend stocks of 2020

If investors are looking for the best companies offering dividends, AT&T (NYSE:T) is a good choice. Because the company has been around for over a century, AT&T’s dividend yield of 6% is great for investors.

The telecommunication’s stock is a dividend aristocrat. With dividend aristocrats, investors are buying stocks that consistently pay high dividends to investors for at least 25 years. Because AT&T is a dividend aristocrat, the company is a great dividend stock in 2020 and beyond.

AT&T Q2 2020 earnings deliver strong results

In addition to strong dividends, the telecommunications giant also had a robust Q2 earnings report. AT&T reported revenue of $41 billion. In the last quarter, The company’s profits took a hit. AT&T’s revenue slightly dropped because its movie division was stalled during the nationwide quarantine. Even though profits were down, they still beat Wall Street expectations. John Stankey, the company’s CEO, spoke about the results.

“Our solid execution and focus in a challenging environment delivered significant progress in the quarter, most notably the successful launch of HBO Max, resilient free cash flow and a strengthened balance sheet,” said Stankey.

The chief executive officer also spoke about AT&T’s positive cash flow.

“Our resilient cash from operations continues to support investments in growth areas, dividend payments and debt retirement. We are aggressively working opportunities to sharpen our focus, transform our operations and continue investing in growth areas, with the customer at the center of everything we do,” added Stankey.

AT&T chief financial officer John Stephens also touted the success of its HBO Max streaming service.

“One month after launch, HBO Max had about 3 million retail subscribers. 4.1 million subscribers had ‘activated’ their Max account. Of those, more than 1 million are wholesale subscribers through AT&T,” said Stephens.

AT&T stock gets buy ratings from analysts as one of the best dividend stocks of 2020

Even though AT&T’s Q2 2020 revenue beat expectations, two different financial analysts have different takes on the stock. Bernstein analyst Peter Supino said that AT&T stock is a buy because of its increased mobile service during COVID-19.

“Critically, mobility service revenues, adjusted for roaming, grew by more than 1%,” noted Supino.

Morningstar analyst Mike Hodel also rates AT&T as one of the best dividend stocks for 2020 and beyond.

“Looking at AT&T’s businesses individually, we believe the firm still deserves a narrow moat based primarily on cost advantages within the wireless business and intangible assets acquired with Time Warner. These advantages should enable the firm to maintain relationships with customers and increase free cash flow,” said Hodel.

Some analysts see AT&T as a weaker dividend stock

While Peter Supino rates AT&T stock a buy, other analysts are bearish on the telecom company’s site. MoffettNathanson analyst Craig Moffett wrote in a note to clients that he is skeptical that AT&T can compete with other wireless companies.

“Their loss of postpaid phone subscribers owes, in part, to the necessity of prioritizing free cash flow over growth in order to mitigate the weakness in their media and wireline businesses. And, perhaps more importantly, it is unclear whether AT&T has the balance sheet to vigorously compete in the FCC’s upcoming auctions for mid-band spectrum,” wrote Moffett.

Even though analysts are split on whether to buy AT&T stock, the company’s strong dividend makes the stock a good long-term buy for investors.

2. Microsoft

Microsoft stock is one of the best dividend stocks for investors

In addition to AT&T, tech giant Microsoft (NASDAQ:MSFT) has one of the best dividend stocks of 2020 for investors. Microsoft’s dividend yield is small at 1%, but offers a robust dividend. In addition to a reliable dividend, Microsoft’s last earnings report was better-than-expected as well.

Microsoft has positive Q3 2020 earnings as one of the best dividend stocks

In its Q3 2020 earnings report, Microsoft had a strong Q3 2020 earnings report. The company’s CEO Satya Nadella, spoke about the positive results.

“We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning to sales and customer service to critical cloud infrastructure and security — we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything. Our durable business model, diversified portfolio, and differentiated technology stack position us well for what’s ahead,” said Nadella in a statement.

Microsoft’s quarterly revenue grew to $35 billion. The corporation’s revenue increased because of “cloud usage increased, particularly in Microsoft 365, including Teams, Azure, Windows Virtual Desktop, advanced security solutions, and Power Platform, as customers shifted to work and learn from home”, noted Microsoft in its earnings report.

Microsoft is a buy for some financial experts

Wedbush analyst Dan Ives noted that Microsoft stock is a buy because of its successful cloud technology. He also thinks that the tech company is benefiting from many workers working more from home.

He also noted “this current remote work from home (WFH) environment is further catalyzing more enterprises to make the strategic cloud shift with Microsoft the main beneficiary as evidenced by the solid results.”

“In a nutshell, Nadella & Co. continue to lead a transformational cloud story narrowing the gap vs. Bezos and AWS into 2021,” added Ives.

Amana Mutual Funds also is bullish on Microsoft stock because of its cloud technology.

“Microsoft has done an excellent job building its Azure cloud services business, while we believe a strong period of semiconductor demand will arrive in the new decade supporting Microchip and Taiwan Semiconductor. Whether the rally starts in 2020 or 2021 remains to be seen but recent signs have been positive.”

Because of Microsoft’s strong Q3 2020 results and bullish analysis from experts, Microsoft has a dividend stock that investors should choose.

3. Johnson & Johnson

Like AT&T, Johnson & Johnson (NYSE:JNJ) is another high-yield dividend aristocrat that is a good choice for investors. The company’s dividend yield is a healthy 2.76%.

The healthcare company overcame controversy for allegedly producing toxic baby powder. The corporation is moving beyond that tumultuous period as the corporation develops a COVID-19 vaccine.

Paul Stoffels, M.D., Vice Chairman of the Executive Committee and Chief Scientific Officer, is supervising the project. He spoke about the potential treatment in a statement.

“We are excited to see these pre-clinical data because they show our SARS-CoV-2 vaccine candidate generated a strong antibody response and provided protection with a single dose. The findings give us confidence as we progress our vaccine development and upscale manufacturing in parallel, having initiated a Phase 1/2a trial in July with the intention to move into a Phase 3 trial in September,” said Stoffels.

Johnson & Johnson is a top dividend stock in 2020

“Based on the strength of the preclinical data we have seen so far and interactions with the regulatory authorities, we have been able to further accelerate the clinical development of our investigational SARS-CoV-2 vaccine, Ad26.COV2-S, recombinant,” said Stoffels.

“Simultaneously, we are continuing our efforts to build important global partnerships and invest in our vaccine production technology and manufacturing capabilities. Our goal is to ensure we can deliver a vaccine to the world and protect people everywhere from this pandemic,” added Stoffels.

Johnson & Johnson stock rises on promising coronavirus vaccine trial

Mathai Mammen, M.D., Ph.D., is the global head of Janssen Research & Development, LLC at Johnson & Johnson. He noted that the potential for the vaccine can have a great impact on the world.

“As we collectively battle this pandemic, we remain deeply committed to our goal of providing a safe and effective vaccine to the world. Our pre-clinical results give us reason to be optimistic as we initiate our first-in-human clinical trial, and we are excited to enter the next stage in our research and development toward a COVID-19 vaccine,” said Mammen.

“We know that, if successful, this vaccine can be rapidly developed, produced on a large scale and delivered around the world,” added Mammen.

Financial analysts say Johnson & Johnson is one of the best dividend stocks of 2020

CNBC financial analyst Jim Kramer thinks that Johnson & Johnson stock is a buy because of its strong dividend and its vaccine development.

“J&J has the best pipeline of these drug companies,” said Cramer. “Their vaccine could fail and the stock wouldn’t even go down. That’s how cheap this thing is. I think it’s a buy right here,” said Cramer.

In addition to Cramer, Merrill Lynch analyst Bob Hopkins is bullish on Johnson & Johnson stock. He believes that the company can overcome its past troubles if the coronavirus vaccine is effective.

“We continue to like the risk reward in JNJ. While visibility remains low with litigation, Covid’s impact on the economy could well bring names like JNJ back into favor and goodwill from a successful vaccine could limit drug pricing risk,” wrote Hopkins in a note to clients.

Because of its healthy dividend and promising vaccine, investors can pick Johnson & Johnson stock.

4. Altria

While Johnson & Johnson wants to be a dividend stock that promotes health, Altria (NYSE: MO) is a “sin” dividend stock. The tobacco company has an impressive 8% dividend yield. In Altria’s Q2 2020 earnings report, chief financial officer Sal Mancuso spoke about Altria raising its dividend payout.

“We are pleased to announce that yesterday, our board declared the quarterly dividend ahead of our normally scheduled declaration date. The board declared a quarterly dividend of $0.86 per share, representing a new annualized dividend rate of $3.44 per share,” said Mancuso.

“This represents an increase of 2.4% from the previous annualized rate of $3.36 per share and marks the 55th dividend increase in the past 51 years. Our balance sheet is strong, and our core tobacco businesses continue to generate significant cash,” added Mancuso.

Altria stock rises as Q2 2020 earnings beat expectations

Despite the slowdown in tobacco sales, the tobacco company had an increased earnings per share in its latest earnings report.

“Despite the challenges of the COVID-19 pandemic in the U.S., our employees continue to execute against our 10-year vision with strong focus and commitment,” said Altria in a statement.

“Over the first-half of 2020, we believe Altria showed resilience in volatile market conditions, growing adjusted diluted earnings per share by 8.5%, ” said Altira. The company’s earnings were “driven by the outstanding financial performance of our core tobacco businesses. We’ve also hit key milestones and made steady progress behind our noncombustible product portfolio,” added Altria.

Financial analysts bullish on Altria as one of the best dividend stocks of 2020

Morningstar analyst Phillip Gorham rates Altria as an underrated stock. He notes that the overall robust cigarette industry makes the stock a buy.

“Underlying trends in the U.S. cigarette industry appear to be intact following Altria’s first-quarter results, which included very strong shipment numbers, with comparability affected by a number of technical issues,” he said.

“Aside from adjusting for the timing of some of the company’s shipments that were brought forward into the first quarter, we are making only modest tweaks to our estimates for the remainder of the year and our longer-term outlook is unchanged. We are reiterating our wide-moat rating and $54 fair-value estimate,” added Gorham.

Stifel analyst Christopher Growe noted that Altria had controversy because of its vaping products.

“The tobacco stocks, especially Altria, seem to find controversy at every turn, with investors increasingly focused on the negatives and the risks, which have always been ever-present for this industry, and not rewarding the improvement in the fundamentals,” said Growe.

However, during the pandemic, people have been buying more tobacco products in bulk during the quarantine. Because of an increase in tobacco use, Growe rates Altria one of the best dividend stocks of 2020 to buy.

“We remain confident in Altria’s ability to lead a price increase again this fall, in line with our estimate (+6% price per pack growth this year) supporting the 4% profit growth we estimate for Altria’s Smokeable division,” said Growe.

If investors want to pick a dividend stock with a strong customer base, Altria is a good choice.

5. Exxon

Even though oil prices have dropped, gas giant Exxon (NYSE:XOM) is still one of the best dividend stocks of 2020. In its latest earnings report, Exxon had a decline in revenue, but still maintains its hefty 8.27% dividend yield.

“Second-quarter results included a $1.9 billion noncash benefit from inventory valuation, largely reversing the first-quarter impact due to the improvement in commodity prices relative to the end of March and resulted in a second-quarter U.S. GAAP loss of $1.1 billion,” noted Exxon.

ExxonMobil is one of the best dividend stocks of 2020 to buy and hold

“Excluding identified items, there was a $3 billion loss in the second quarter,” noted Exxon.

The oil giant noted that its revenue was “down $5.3 billion from the first quarter driven by the effects of COVID-19, including the unprecedented decline in oil and product demand, resulting in significant declines in prices.”

ExxonMobil is still one of the best dividend stocks of 2020 despite earnings miss

Because of the global shutdown, many cars stayed off the road and the need for gas declined greatly. As a result, oil company Exxon had a whopping net loss of $1.08 billion in Q2 2020. Exxon chief executive officer Darren Woods explained that the coronavirus caused a decline in the corporation’s profits.

“The global pandemic and oversupply conditions significantly impacted our second quarter financial results with lower prices, margins, and sales volumes,” said Woods.

Exxon vice-president Neil Chapman noted that despite the revenue drop, Exxon remains one of the best dividend stocks.

He noted that the oil company has “a long history of providing a reliable and growing dividend. A large portion of our shareholder base has come to view that dividend as a source of stability in their income,” said Woods.

“We take that very seriously,” added Woods.

Chapman also noted that reducing expenses will help Exxon maintain its high dividend.

“The plans will include further reducing operating expenses and identifying additional opportunities to efficiently defer more capex. Doing so will enable us to maintain the dividend and hold debt at its current level,” said Chapman.

Financial analysts rate ExxonMobil as one of the best dividend stocks of 2020

Because of Exxon’s spending reduction, Cowen & Co. analyst Jason Gabelman rates Exxon as one of the best dividend stocks of 2020. He commented that Exxon’s asset sales could help reduce

“It has fallen a bit behind schedule but there have been reports there are several packages out,” said Gabelman.

“Given the current environment, XOM[Exxon] will likely need to continue defending its long-term view of energy growth that underpins its counter-cyclical capex [capital expenditure] program that could ramp back up next year,” added Gabelman.

Morningstar strategist Allen Good also rates Exxon as one of the best dividend stocks of 2020. He noted the company’s low expenditure costs.

“We[Morningstar] continue to rate Exxon Mobil as one of the higher-quality integrated firms, given its ability to capture economic rents along the oil and gas value chain. While its peers operate a similar business model with the same goal, they fail to do so as successfully, as evidenced in the lower margins and returns. Exxon generates its superior returns from the integration of low-cost assets combined with a low cost of capital; this combination produces excess returns greater than those of its peers,” said Good.

“Additionally, its decision to increase investment relative to peers during the next five years is also likely to narrow the gap in returns with peers,” added Good.

Other financial experts think investors should sell ExxonMobil stock

While some analysts are bullish on Exxon stock, others think that the dividend aristocrat is still a pass for investors. Citi analyst Alistair Syme doubts that the oil corporation can maintain its high dividend with declining oil sales.

“The dividend is undoubtedly the real question, or maybe more correctly the forward scenario that the company is adopting to underpin shareholder returns,” said Symes.

RBC Capital Pavel Molchanov wrote in a note to clients that Exxon’s high dividend yield can withstand extra debt.

“While we see the dividend as safe — if for no other reason than management’s desire to maintain S&P Aristocrat status — the cash flow outspend is colossal under current conditions,” wrote Molchanov.

ExxonMobil is undergoing a lot of turbulence, but is still one of the best dividend stocks of 2020 to buy and hold.

6. Chevron

In addition to ExxonMobil, Chevron is an oil giant that is struggling with the COVID-19 pandemic fallout. Despite diminished sales, Chevron’s dividend yield is still a healthy 6.15%.

Chevron Q2 2020 earnings down because of COVID-19

The oil company had a staggering $8.3 billion loss in the past quarter. Chevron CEO Pierre Breber spoke about the corporation’s disappointing Q2 2020 revenue report.

“Second quarter was a challenging one for the company. Financial results included $4.9 billion in special item net charges and a foreign exchange loss of over $400 million. Excluding special items and FX, the quarter resulted in a $3 billion loss or $1.59 per share,” said Breber.

Crude Oil Futures Price levels 1987 through2017 — Crude Oil Futures Price levels 1987 through 2017 before coronavirus hurt Chevron as a dividend stock

Morningstar rates Chevron as one of the best dividend stocks of 2020

Morningstar analyst Allen Good noted that Chevron is one of the best dividend stocks of 2020 because of its expanded natural gas production.

“Although Chevron is an integrated energy company, its narrow economic moat rests on the quality of its upstream portfolio. Chevron’s upstream segment holds a low-cost position based on an evaluation of its oil- and gas-producing assets, using our exploration and production moat framework. Its greater exposure to liquids and liquids-linked natural gas production has produced peer-leading cash margins during the past five years,” said Good.

Good also noted Chevron’s expanded global oil exploration. The growth makes Chevron stock attractive to the financial expert.

“New production from its LNG projects Gorgon and Wheatstone, offshore oil developments in the Gulf of Mexico and West Africa, and tight oil growth should preserve this exposure. We forecast that Chevron can deliver a midcycle cash operating margin of nearly $30 per barrel of oil equivalent, the highest in its peer group,” said Good.

Some analysts see Chevron stock as a sell despite dividend

While some analysts are bullish on Chevron stock, others are bearish on one of the best dividend stocks of 2020. Goldman Sachs analyst Neil Mehta was pleased with Chevron’s oil production.

“Production came in above our expectations, with volumes primarily beating our estimates on U.S. (both liquids and gas) and International liquids,” wrote Mehta in a note to clients.

While Mehta notes Chevron’s increased oil production as a plus, he thinks Chevron stock isn’t a buy.

“We [Goldman Sachs] see the absolute decline in [the] share price as a function of the collapse in oil demand and oil prices,” said Mehta.

Citi analyst Alistair Syme also doubts that Chevron’s worse-than-expected results mean that the corporation’s stock may tumble.

“2Q results show a picture that is perhaps not as resilient as the market thought it might be,” said Syme.

Chevron stock may be volatile because of COVID-19. However, Chevron is still one of the best dividend stocks of 2020.

7. Pfizer

Pfizer (NYSE: PFE) stock has an impressive dividend of 3.95%. The pharmaceutical company’s stock rose because of a promising COVID-19 vaccine. Pfizer’s $11.8 billion revenue beat Wall Street expectations. The company’s CEO, Albert Boula, spoke about the potential coronavirus vaccine.

“We remain fully committed to confronting the public health challenge posed by the COVID-19 pandemic by collaborating with industry partners and academic institutions to develop potential approaches to prevent and treat COVID-19,” said Boula.

“Our researchers and scientists have made important progress toward developing an effective vaccine though significant additional work remains,” added Boula.

Some financial analysts rate Pfizer as one of the best dividend stocks of 2020

Because of Pfizer’s coronavirus vaccine and high dividend, some financial experts rate the company’s stock as a buy.

Edward Jones analyst Ashtyn Evans noted that Pfizer’s other successful medications make the stock a buy. She said that Edward Jones’ “positive view of the stock is driven by the company’s extensive pipeline and lower valuation relative to peers.”

Morningstar rates Pfizer stock as a buy

Morningstar director Damien Conover cited Pfizer as one of the best dividend stocks of 2020 because of its impressive cash flow.

“Pfizer’s operating structure allows for cost-cutting following patent losses to reduce the margin pressure from lost high-margin drug sales. Overall, Pfizer’s established product line creates the enormous cash flows needed to fund the average $800 million in development costs per new drug. In addition, the company’s powerful distribution network sets up the company as a strong partner for smaller drug companies,” said Conover.

“Pfizer’s entrenched consumer and vaccine franchises create an added layer of competitive advantage”, added Conover.

Conover also noted that Pfizer is one of the best dividend stocks “stemming from brand power in consumer healthcare and manufacturing cost advantages in the vaccines division. Pfizer recently created a consumer healthcare joint venture with GlaxoSmithKline that could lead to an eventual divestment of the unit.”

Pfizer’s impressive cash flow and potential profits from its COVID-19 vaccine make Pfizer one of the best dividend stocks of 2020 and beyond.

8. Coca-Cola

While Coca-Cola(NYSE:KO) stock dropped because of the coronavirus crisis, the beverage company has one of the best dividend stocks of 2020. Coke’s dividend yield of 3.47% should be impressive to investors.

Coke’s chief financial officer, John Murphy, spoke about Coke’s net profit decline to $1.78 billion.

“Organic revenues declined 26%, driven by a 22% decline in concentrate shipments and a 4% decline in price/mix,” said Murphy.

Financial experts rate Coke stock as a buy

Morningstar analyst Nicholas Johnson believes Coca-Cola can withstand the current economic volatility.

“At a high level, we believe there are characteristics endemic to the nonalcoholic beverage industry more generally, as well as Coca-Cola’s specific positioning within this industry, that result in a competitively advantaged business,” said Johnson.

Coca-Cola stock is one of the best dividend stocks of 2020

“While the company is disproportionately exposed to beverage categories that are in secular decline, we believe it has the brand equity to induce demand for reformulated variants of its most popular trademarks, the resources to reorient its portfolio toward drink categories that are more consistent with the consumer ethos, and the scale to fulfill these endeavors profitably,” added Johnson.

In addition to Morningstar, HSBC analyst Carlos Laboy said that Coke stock is undervalued. He also believes that Coke bottlers are “poised to accelerate their growth contribution [to Coca-Cola’s profits] as they grow into market developers with better tools and a richer service culture.”

Coca-Cola is one of the best dividend stocks of 2020 because of its cash flow and resilience through economic downturns.

9. Home Depot

As the coronavirus pandemic hurt many corporations, Home Depot’s (NYSE:HD) sales rose. The corporation’s stores helped many people who were homebound in the spring. Home Depot’s Q1 2020 revenue jumped 7% to $28.26 billion. The company’s 2.27% dividend yield makes it a good divident stock to buy for investors. Home Depot’s CEO, Craig Menear, spoke about the company’s results.

“As the COVID-19 pandemic evolved, we anchored to the core values of our Company by focusing on two key priorities: working to ensure the safety and well-being of our associates and customers, and providing our customers and communities with essential products,” said Menear in a statement.

“We took early and decisive action to intentionally limit customer traffic in our stores which we believe had a significant impact to sales in many markets,” added Menear.

Home Depot is one of the best dividend stock to financial experts

Brian Nagel is the senior equity research analyst at Oppenheimer. He believes that Home Depot is one of the best dividend stocks of 2020. He thinks that Home Depot benefited from the recent nationwide quarantine.

“I think Home Depot is one of the companies that is benefiting or really capitalizing, performing well through this Covid-19 crisis and is likely to perform well as the crisis headwinds abate,” said Nagel.

“More people are spending more time in their homes, and you’re seeing that increase spend as more people spend more time working on their houses,” added Nagel.

Jefferies equity analyst Jonathan Matuszewski noted that Home Depot should improve in its next earnings report because of Memorial Day sales.

“Given HD’s commentary, it will be key to understand the maintenance or potential loosening of such actions heading into the typically-promotional Memorial Day Weekend,” said Matuszewski.

“If the home improvement centers can constrain incremental expenses to meet outsized traffic while still protecting customers/employees, EPS[earnings per share] should improve,” added Matuszewski.

Home Depot is one of the best dividend stocks of 2020 because of its service to customers through the COVID-19 pandemic.

10. Merck

In addition to Pfizer, Merck is a pharmaceutical company that is one of the best dividend stocks of 2020. Mercks’s dividend yield of 3.16% is impressive to investors.

Merck’s Q2 2020 revenue dropped to $10.87 billion because of the COVID-19 crisis. CEO Ken Frazier spoke about the results.

“As expected, social distancing measures in many regions negatively impacted second-quarter volumes for many of our products. However, customer access to care is steadily improving, including in our portfolio of vaccines, which was hit particularly hard this quarter,” said Frazier.

Merck expects revenue to improve as it develops a COVID-19 vaccine.

“Both vaccine candidates will soon enter the clinic and we have begun investing to facilitate our ability to manufacture hundreds of millions of doses,” said Frazier.

Financial experts say Merck stock is a buy

Morningstar director Damien Conover is bullish on Merck stock. He noted that Merck’s patents make the company one of the best dividend stocks of 2020.

“Patents, economies of scale, and a powerful intellectual base buoy Merck’s business and keep it well shielded from the competition. Patent protection should continue to keep competitors at bay while the company strives to introduce the next generation of drugs,” said Conover.

Conover also commented that Merck’s cash flow makes the pharma company’s stock a buy.

“Further, the company’s enormous cash flows support a powerful salesforce that not only sells currently marketed drugs but also serves as a deterrent,” said Conover.

“As a result, Merck offers a powerful partnership opportunity for externally developed drugs. The cash flows also put the company in the rare position of supporting the approximately $800 million in research and development,” added Conover.

For investors that want a strong pharma stock with good dividends, Merck is an excellent choice.

The best dividend stocks of 2020 show resilience

While 2020 has been a brutal year for many stocks, dividend stocks have proven resilient. With strong cash flows and reliable quarterly payouts, investors can rest assured with these stocks in their portfolios. With TradingSim’s blogs and charts, investors can find the best dividend stocks of 2020 to buy and hold.

Being a new investor can be daunting. However, if if you invest on your own, with an early investment, you can build a healthy portfolio. This TradingSim article will help guide investors that want to pick stocks on their own. This article will also have the top five stocks that investors can pick when they invest on their own.

Why are people hesitant to invest on their own?

In this volatile bear market and “corona-conomy”, you may be hesitant to invest on your own. If experienced financial planners can lose money on Wall Street, then many inexperienced investors may feel intimidated.

However, now may be the best time to invest on your own. With many stock prices falling, there is an opportunity to buy stocks at more affordable prices. You don’t have to be an experienced day trader to invest on your own. It can be beneficial to invest on your own.

Why should you invest on your own?

When people invest on their own, they can start with a small amount like $50. You can also put in larger amounts like $1,000. Financial planner Jeff Rose notes that investing on your own can pay off if you act early.

“Opportunity cost is that unseen payoff you miss out on because you’re busy doing something else,” said Rose.

401ks a great way to invest on your own

401k - Nest Egg

If you have a 401k retirement account, you’re already investing on your own. The retirement accounts put your money into are invested in stocks and ETFs that develop more income. The 401ks are tax-free as long as you don’t make early withdrawals.

Financial expert Jeff Rose also spoke about the importance of investing in 401k retirement accounts.

“You can think of it as the answer to the question, how much more would I be ahead if I chose a different path? In my own young life, the biggest opportunity cost — or financial mistake — was not opening a Roth IRA when I was 18 or 19 years old,” said Rose.

401ks are a great way to start investing on your own with an arranged list of stocks, ETFs, and mutual funds.

Direct stock plans are another option to invest in on your own

In addition to 401ks, direct stock plans are an option to invest on your own. Direct stock purchase plans allow investors to purchase stock directly from a company. Many major companies like Exxon Mobil offer direct stock plans.

ExxonMobil stock is good stock if you want to invest on your own

Investors can buy stocks once or on an automatic recurring basis through a transfer agent. The transfer agent buy or sell shares on a set basis on behalf of the company. The agent also tracks the records and transactions for the investor.

When investors invest a fixed amount every quarter or so, they are dollar-cost average investing stocks. When dollar-cost averaging, investors buy more shares when the price of a stock is low. Conversely, they buy fewer shares when a stock’s price rises.

Direct stock purchase plan fees vary according to the company. There may be initial setup account fees and automatic investment fees as well. In addition to those fees, you also have to pay fees when you sell stock shares as well. When investing on your own, you can directly buy shares of companies through stock purchase plans.

Dividend reinvestment plans another investment option

If you want to trade on your own, dividend reinvestment plans (DRIPs) are another investment option. When you invest in stocks that pay dividends through retirement plans, you can take the money from that payment and reinvest in the stock market. Once you sign an agreement with a company, you can reinvest the dividends to earn more money.

DRIPs can lead to compounding returns if you take dividends to reinvest them. If you keep reinvesting your dividends, you can increase your profits over the long-term instead of taking cash in the short-term. Some benefits are commission-free transactions and discounted stock share prices.

For example, if you buy Ford(NYSE:F) stock at $5 a share, you can get a dividend of $0.50. In this example, Ford’s stock will rise 10% and the dividend will rise $0.05% every year.

If you invest $20,000 when the stock price is $20, you can end up with 1,000 shares. At the end of the first year of investment, your dividend payout would be $500. If you reinvest that sum, after three years, you can increase your investment from $20,000 to $28,471.

Robo-advisors can help if you’re investing on your own

If you don’t want to use financial advisors but still want help picking stocks, you can still use robo-advisors to help with these plans. Robo-advisors are digital programs like Betterment and Wealthfront that help investors pick stocks. After you answer a questionnaire, the automated investment manager chooses stocks and ETFs that match your financial goals. They can also rebalance your portfolio

Investing on your own can be more affordable with robo-advisors. While human financial advisors can charge a 1% expense fee for trades, robo-advisors can charge less. Robo-advisor fees can be just 0.25%.

Robo-advisors can lower tax liabilities for investing on your own. Robo-advisors can help investors write off tax losses as well. Through tax-loss harvesting, you can sell a losing investment, general capital losses, and claim those losses to get a tax credit.

Rees Mason is a Merrill Lynch wealth advisor. She noted that robo-advisors can be combined with financial analysts’ advice to invest.

“The younger generation demands a higher level of value and want to understand exactly what they’re paying for. I don’t worry about robo-advisors because technology is used in tandem with human advice. Technology can make us more efficient and it’s great for people when they’re first getting started,” said Mason.

When investing on your own, robo-advisors can be a good guide.

What are the advantages of investing on your own?

While investing in a 401k is helpful, the stocks aren’t always your choice. If you invest on your own, you can have more control over your stock picks. You can also choose stocks that you are following closely. For example, if you’re a follower of Apple’s products, investing in Apple stock can be a good choice for investing on your own.

Apple stock can be a good stock for investing on your own

Investing on your own can help you save money. Stockbrokers and brokerage firms are very expensive. If you invest on your own, you can save thousands of dollars a year in brokerage fees.

In addition to saving you money, investing on your own gives you more hands-on financial knowledge. By studying a company’s quarterly revenue reports, balance sheets, and financial analysis blogs like TradingSim, you can get more information on how stocks are performing before you invest.

What are some disadvantages of investing on your own?

While investing on your own, there are downsides to investing on your own as well. Monitoring the stock market takes up hours of time and you may not have that much time to watch Wall Street.

In addition to not having time for active investing, investing on your own can lead to more emotional investing as well. Because you’re more heavily invested and not passively invested, you’re more likely to trade stocks more recklessly. Panic buying and selling based on Wall Street volatility can hurt your portfolio.

Financial planners can add objective advice if you need extra help and guidance. However, investing on your own can be beneficial if you have enough discipline and time.

What are your financial goals before investing on your own?

When you’re investing on your own, you have to consider your financial goals. If you want to purchase a home, you will have to be disciplined and invest a greater sum of money. However, if you want to just make short-term gains, you can invest a smaller amount of money.

Considering your financial goals are also pivotal if you want to make the most of your money. If you want to have money for retirement in the future or have a shorter-term goal, investing on your own is crucial if you want to meet your financial goals.

Tips to remember when you invest on your own

When you invest on your own, there are many precautions to take. Here are just a few things that you need to remember when you trade stocks by yourself.

Conduct a lot of research on stocks before you trade. When you start trading stocks, you must conduct a lot of research. By studying financial blogs, like TradingSim, investors can learn more about what stocks they want to trade.
Practice trading stocks before actual investment. Before investing on your own, you can practice trading stocks on TradingSim. With stock trading simulation, you can practice investing stocks before you put your real money on the line.
Focus on a few stocks you know. Once you research stocks and practice trading stocks on TradingSim, you can dive in and invest on your own in a few trusted stocks. You can start with low-risk value stocks like Coca-Cola (NYSE:KO) to start.
Know your financial limits. When you’re investing on your own, have a limit to how much you invest. If you have a set limit on how much you trade, it will help prevent you from suffering too many losses. In addition to losses, it’s important to have a set target for gains as well. Once you meet a certain target of gains for the trading day, you should stop at that amount once you reach that goal.
Create a trading journal. When you start investing on your own, you should keep track of your trades. Keep track of which trades were successful and which ones weren’t. You can use the information to adjust your trading strategy.
Seek advice from other traders and financial expert advice. Even if you don’t use professional traders, you should still keep in contact with other traders and other financial experts. Trading groups online can help you get more support as you trade. Reading the expertise of other financial analysts can also help you while you’re investing on your own.

Robinhood makes investing on your own easier

The Robinhood app has made it even easier to invest on your own. Noah Whinston, a Robinhood trader, said that the app makes trading more interesting.

“Robinhood feels very gamified. The act of trading stocks was boring for a really long time, and even today, if you do it through Charles Schwab, it would seem boring. Robinhood makes it feel frictionless and fun and easy, and it can be very, very addicting,” said Whinston.

Investing on your own can be advantageous if you have available funds to risk. The trading app has democratized trading and made it much easier to start trading stocks.

Tesla stock is a top stock for investing on your own

Dave Portnoy popularizes investing on your own

Barstool Sports founder Dave Portnoy has made day trading more popular with his flamboyant social media posts. He touts his success as a trader. Portnoy also says he’s a better investor than legendary investor Warren Buffett.

“I’m not saying I had a better career. … He’s one of the best ever to do it,” he said. “I’m the new breed. I’m the new generation. There’s nobody who can argue that Warren Buffett is better at the stock market than I am right now. I’m better than he is. That’s a fact,” said Portnoy.

Many traders say that with trading apps, they can find success. While investing on your own, you should proceed with caution.

Invest on your own with caution on Robinhood

While Portnoy and other traders say that investing on their own is a fun game, there are downsides to investing on the Robinhood app as well. Tyler Grant, a Robinhood user, says Portnoy has helped some new traders get into investments.

“His legacy is going to be the fact that he got people who realized they can get in the game and get in the game really cheaply,” said Grant.

However, Portnoy recently lost $220,000 on the E-Trade trading app. His rant about the loss on social media got him banned from the site.

“I’m down $220k now! Now I think I have to bankrupt E-Trade. I think I have a vendetta against E-Trade,” said Portnoy.

Robinhood not only option for investing on your own

Eric Balchunas, a financial expert, noted that low-cost index funds are a good option for investing on your own.

“The bigger, badder retail investor army is the $8 trillion sitting in low-cost index funds,” said Balchunas. “More and more people are seeing that the way to build wealth is by keeping costs low and being patient, not chasing hot stocks and investment fads.

Barclays analyst Ryan Preclaw said Robinhood’s returns aren’t as perfect as they seem.

“More Robinhood customers moving into a stock has corresponded to lower returns, rather than higher. “And while it’s true that many high-return stocks have had a substantial increase in retail ownership, low-return stocks have also had a big increase.”

Financial expert advises people investing on their own

While Portnoy and other day traders are touting their gains in the stock market, financial experts advise caution. Lauren Simmons, a former stock trader at the New York Stock Exchange, says investors should make sure they meet certain criteria before they invest on their own.

“It’s not just about investing in the market, but what is your wealth confidence overall? Do you have money in retirement? Do you have an emergency fund?” asked Simmons.

She also advises independent traders to ask more questions about their financial stability before they invest.

“Do you have savings? Credit card debt? Student loan debt? If you have any of the above, conversations about the stock market shouldn’t be coming out of your mouth. We are reaching historic highs again, and we are in a global pandemic,” said Simmons.

Low-risk trades in stocks are best options for investing on your own

Even though many day traders are discounting the expertise of expert investors like Warren Buffett, that may not be a wise choice. Eric Balchunas, a financial analyst with Bloomberg News, noted that low-risk investments may be best if you’re investing on your own.

“The bigger, badder retail investor army is the $8 trillion sitting in low-cost index funds. More and more people are seeing that the way to build wealth is by keeping costs low and being patient, not chasing hot stocks and investment fads,” said Balchunas.

Balchunas also wants traders to understand that they will learn about how to trade stocks from trial and error.

“And it’s very likely Robinhood’s day traders will arrive at the same conclusion at some point. Whether it ends in laughter or tears, it will be an education they can use for the rest of their lives,” said Balchunas.

When you’re investing on your own, conducting research, assessing your financial needs, and choosing low-risk options may be your best choice.

Top 5 stocks that you can choose on your own

These five stocks are a top choice if you want to invest on your own.

1.Microsoft

Microsoft(NASDAQ:MSFT) is a value stock that is a relatively stable choice for investing on your own. The established tech stock that has performed well during the COVID-19 crisis. Because of Microsoft’s cloud services, the corporation had a better-than-expected Q3 2020. Microsoft CEO Satya Nadalla spoke about the positive results.

“We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security – we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything,” said Nadella.

“Our durable business model, diversified portfolio, and differentiated technology stack position us well for what’s ahead,” added Nadella.

Microsoft is a top stock for investing on your own

Amy Hood is chief financial officer at Microsoft. In a statement, she spoke about the positive revenue report.

“In this dynamic environment, our sales teams and partners executed a solid third quarter, with Commercial Cloud revenue-generating $13.3 billion, up 39% year over year,” said Hood.

“We remain committed to balancing operational discipline with continued investments in key strategic areas to drive future growth,” added Hood.

Microsoft Q4 earnings show continued strength

In its most recent Q4 2020 earnings report, Microsoft continued to have strong revenue. Nadella spoke about Microsoft’s Q4 2020 positive results.

“We delivered record results this fiscal year, powered by our commercial cloud which surpassed $50 billion in revenue for the first time, up 36% year over year. The last five months have made it very clear that digital tech intensity is key to business resilience,” said Nadella.

Financial analysts recommend Microsoft stock if you to invest on your own

If you’re investing on your own and want an expert analysis to help make a decision, many are bullish on Microsoft stock. Dan Ives from Wedbush praised Nadella’s decision to close Microsoft stores to focus on its cloud technology.

“This is a tough, but smart strategic decision for (CEO Satya) Nadella & Co. to make at this point. The physical stores generated negligible retail revenue for MSFT(Microsoft) and ultimately everything was moving more and more towards the digital channels over the last few years,” said Ives.

Microsoft stock is a top stock for people who invest on their own

“That said, in this COVID-19 environment this was the right time for Redmond to rip the band-aid off and close the stores strategically speaking,” added Ives.

If you’re investing on your own, it’s key to pick an established stock that advances with new tech. When investing on your own, traders can buy Microsoft stock.

2. Google

Google(NASDAQ: GOOG) parent Alphabet is another stock that is a solid choice if you’re investing on your own. The search engine giant has a well-performing stock. Google’s Q1 2020 revenue totaled $41 million. Google CEO Sundar Pichai noted that the tech giant’s stock is performing well because of its wide usage during the COVID-19 pandemic. In a statement, Pichai touted its growth in a statement.

Google is a top stock if you invest on your own

“Given the depth of the challenges so many are facing, it’s a huge privilege to be able to help at this time. People are relying on Google’s services more than ever, and we’ve marshaled our resources and product development in this urgent moment,” said Pichai.

Google’s ownership of YouTube also makes the stock a top stock if you want to invest on your own. Pichai noted that the video-sharing site added to Google’s profits.

“We are now adding roughly 3 million new users each day and have seen a 30-fold increase in usage since January. There are now over 100 million daily Meet meeting participants,” said Pichai.

Google a buy for financial experts for people investing on their own

With Google’s strong Q1 performance, many financial analysts see Google stock as a buy if you want to invest on your own.

Canaccord Genuity analyst Maria Ripps noted that Google stock is a buy because of its cloud computing growth.

“We see Google likely benefiting as the pandemic could be a tailwind for ad budgets shifting online, momentum in Google Cloud supporting consolidated growth, and Other Bets providing optionality for patient investors,” said Ripps.

In her note to clients, she also noted that Google is a buy because of its strong balance sheet.

“This, coupled with prudent expense management, a strong balance sheet, and share repurchases, gives us comfort around Alphabet’s ability to successfully withstand this near-term disruption,” wrote Ripps.

If you want to invest on your own, Google is a strong stock with impressive returns.

3. Apple

Apple (NASDAQ:AAPL) stock is another good choice if you want to invest on your own. The tech giant had a successful Q2 2020 with revenue of $58.3 billion. That’s a 1% increase from a year ago.

Apple’s CFO, Luca Maestri, noted that Apple’s robust device sales helped drive the company’s profits.

“Our active installed base of devices reached an all-time high in all of our geographic segments and all major product categories. We also generated operating cash flow of $13.3 billion during the quarter, up $2.2 billion over a year ago,” said Maestri.

Apple also had strong guidance for its future earnings.

“We are confident in our future and continue to make significant investments in all areas of our business to enrich our customers’ lives and support our long-term plans — including our five-year commitment to contribute $350 billion to the United States economy,” said Maestri.

Apple is a buy for financial analysts

Because of Apple’s strong Wearable device sales and positive guidance for Q3 2020, many financial experts day the stock is good pick if you’re investing on your own.

Apple stock a top stock if you’re investing on your own

Morgan Stanley lead analyst Katy Huberty thinks that Apple stock is a buy if you want to invest on your own. She wrote in a note to clients that Apple has diverse revenue streams beyond iPhones that will help drive the corporation’s growth.

“Investors are coming to realize that Apple may not be as dependent on significant iPhone cycles to sustain growth as they once thought, and that the ecosystem Apple has created is differentiated and worthy of a platform valuation multiple,” wrote Huberty.

Amana Mutual Funds agrees that Apple stock will continue to climb. The fund company notes even though iPhone sales are down, Apple’s successful Services division makes the stock a buy.

“Despite slowing iPhone sales, Apple’s services businesses have developed into meaningful contributors to revenue, with highly attractive margins,” wrote Amana Mutual Funds in a note to clients.

If you want to invest on your own, Apple is a stable stock that will offer steady returns.

4. Pfizer

Pharmaceutical stocks are great options if you want to invest on your own. The corporation’s stock surged after announcing a $2 billion deal with the government to produce a COVID-19 vaccine. Pfizer will deliver 100 million doses of the vaccine for free to patients if the vaccine is approved. Health and Human Services Secretary Alex Azar spoke about the Operation Warp Speed program.

“Through Operation Warp Speed, we are assembling a portfolio of vaccines to increase the odds that the American people will have at least one safe, effective vaccine as soon as the end of this year,” said Azar in a statement.

“Depending on success in clinical trials, today’s agreement will enable the delivery of approximately 100 million doses of vaccines being developed by Pfizer and BioNTech,” added Azar.

Pfizer has strong Q1 2020 earnings report

In addition to this deal, Pfizer profits increased in its last earnings report. Despite the coronavirus crisis, the corporation saw growth in its biopharmaceutical division.

“Our strong performance in the first quarter highlights the resiliency of our business even during the most challenging times. The Biopharma business grew 12% operationally, driven by strong performances from many key brands,” said Pfizer in a statement.

Pfizer had an optimistic outlook for the remainder of 2020. Chief financial officer Frank D’Amelio spoke about the guidance for the rest of the year.

“Despite the impact of COVID-19, 2020 is still expected to be a transformational year for Pfizer. Following the pending close of the Upjohn-Mylan transaction, New Pfizer will be positioned to deliver revenue and adjusted diluted EPS (earnings per share) growth that is expected to be among the industry leaders,” said D’Amelio.

“New Pfizer will be a smaller, science-based company with a singular focus on innovation while also continuing to allocate significant capital directly to shareholders, primarily through dividends,” added D’Amelio.

Pfizer a top stock if you’re investing on your own

Mizuho Securities analyst Vamil Divan rated Pfizer stock as a top choice if you want to invest on your own. Divan noted in a letter to clients that investors were hopeful about the potential Pfizer COVID-19 vaccine.

“We had several discussions with investors today on the back of the initial data, with much of the discussion focused on the commercial potential for a successful SARS-CoV-2 vaccine, ” wrote Divan.

“The company has mentioned that it will look to price a potential vaccine in line with other commercially-available vaccines, suggesting to us a potential blockbuster commercial opportunity, depending on the vaccine’s clinical profile and the ultimate competitive landscape,” added Divan.

If you want to invest on your own, Pfizer is a top choice for traders.

5. Netflix

When people were quarantined, Netflix views-and shares- rose. The streaming giant’s stock would be a good choice if you want to invest on your own. In its Q2 2020 earnings report, Netflix reported an increase in revenue to $6.15 billion. The company’s chief financial officer, Spence Neumann, spoke about the growth in Netflix subscribers during the worldwide shutdown.

“We have to look at it in the context of what just happened in Q2. And we just added 10 million members, which is the largest growth we’ve ever had in a second quarter,” said Neumann.

Neumann also noted that the growth in subscriber numbers comes from international members.

Netflix stock a good choice if you want to invest on your own

“So it’s very broad-based, and you can see that these members are coming in from everywhere in the world, a few million each in APAC[ Asian and Pacific American countries] and EMEA[ Europe, the Middle East, and Africa] and U.K. and then a couple of million in Lat Am[Latin America]”.

Financial analysts says Netflix a good choice if you invest on your own

With a mostly positive revenue report, Morgan Stanley’s Benjamin Swinburne says that Netflix should do well once it increases its production overseas for the company’s programming.

“Finally, with the majority of Netflix’s production occurring outside the U.S. combined with massive efforts to re-imagine production in a post-COVID world and selectively acquiring third party content, 2021 original deliveries should be higher than 2020 for the year and in each individual quarter,” wrote Swinburne in a note to clients.

Swinburne also wrote in a note to clients that the second half of 2020 will be good for Netflix with its high-profile available content.

“The first half of 2021 might face tough comparisons, but the second half should bring a stronger content slate than what will be seen this year, ” added Swinburne.

In addition to Morgan Stanley, Jefferies analyst Alex Giaimo also recommends Netflix stock if you want to invest on your own. In a note to clients, he touts the company’s subscriber growth.

“While the stock ran a bit faster than near-term fundamentals could support, let’s not lose sight of the fact that Netflix just added ~26 million subscribers in six months,” wrote Giaimo.

Giaimo also notes that Netflix’s subscriber growth may slow down when live sports returns. However, the company’s positive cash flow makes the the stock a good pick for investors.

“Subscriber growth will slow significantly in 2H20[the second half of 2020], but cash in the door now is better than cash in the door three months from now,” wrote Giaimo.

Because of Netflix’s increased viewership and cash flow, the streaming company’s stock is a top choice for investing on your own.

Investing on your own can be done with research and patience

If you’re investing on your own, you can overcome your fears and doubts to perform well in the stock market. You can simulate trades on TradingSim to perfect your strategy or read TradingSim blogs to get investing insight. With patience, research, and maybe even help from other investors, you can find the best stocks for you.

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