With the Dow Jones Industrial Average (NYSE: DIA) and the Standard & Poor’s 500 Index (NYSE: SPY) falling, many are calling for a correction of 20 percent in the stock market. At times like these it is wise to go back to the advice of Shelby Davis, a billionaire investor, when asked when was the best time to buy stocks, “Whenever you have the money” he would reply!
The same still holds, especially for Dividend Aristocrats like Coca-Cola (NYSE: KO), ExxonMobil (NYSE: XOM), and Wal-Mart (NYSE: WMT).
Dividend Aristocrats are those stocks that have increased their dividend annually for at least the past 25 years. As a result, shareholders get a raise each year just for owning the stock. Paying a dividend is a show of strength in itself. Increasing it annually is very impressive, to say the least.
Coca-Cola, ExxonMobil, and Wal-Mart are also industry leaders.
That is why another investing legend, Warren Buffett, is a major shareholder of each. Buffett prefers industry leaders, noting that “It is better to buy an excellent company at a fair price rather than a fair company at an excellent price.”
Due to the direction of the market in recent trading, the prices of Coca-Cola, ExxonMobil and Wal-Mart are becoming fairer and fairer.
Coca-Cola is down for the last week, month, quarter, and year of market action (chart below). For 2014, Coca-Cola has fallen by around 3.4 percent. For 2014, Wal-Mart is down 5.35 percent for 2014. It is off for the last week, month, quarter, six months, and year of trading. Like Coca-Cola and Wal-Mart, ExxonMobil is also down for 2014. ExxonMobil has fallen for the last week, month, and quarter.
For long term investors, there are opportunities to buy industry leaders at a discount.
That is very alluring for Dividend Aristocrats. When the share price falls, the dividend yield rises. The average dividend yield for a member of the Standard & Poor’s 500 Index is around 1.8 percent. Coca-Coal, Wal-Mart, and ExxonMobil all top that.
Dividend Aristocrats like these are ones to buy when you “have the money.”